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UNITED STATES
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: July 3, 1995
(Date of earliest event reported)
BROWNING-FERRIS INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
Commission file number 1-6805
Delaware 74-1673682
(State of Incorporation) (I.R.S. Employer Identification No.)
757 N. Eldridge
Houston, Texas 77079
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 713/870-8100.
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Item 7. Financial Statements and Exhibits
This Form 8-K is being filed in order to file certain exhibits to Registration
Statement No. 33-58891 and such exhibits are being incorporated into
Registration Statement No. 33-58891.
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<C> <S> <C> <C>
SEC File or
Registration Exhibit
Exhibits Number Number
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1(a) Underwriting Agreement between
Browning-Ferris Industries, Inc.,
and Goldman, Sachs & Co. and
CS First Boston Corporation as
Representatives of the Underwriters
named therein, dated June 28, 1995
4(i) Purchase Contract Agreement, dated
as of June 28, 1995, between
Browning-Ferris Industries, Inc.
and The First National Bank of
Chicago, as Purchase Contract Agent
(including as Exhibit A thereto the
form of Security Certificate).
4(j) Pledge Agreement, dated as of
June 28, 1995, among
Browning-Ferris Industries, Inc.,
Texas Commerce Bank National
Association, as Collateral Agent,
and The First National Bank of
Chicago, as Purchase Contract Agent.
8. Opinion of Sullivan & Cromwell
with respect to certain tax matters.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused the report to be signed on its be half by the
undersigned hereto duly authorized.
SIGNATURE
BROWNING-FERRIS INDUSTRIES, INC.
(Registrant)
July 3, 1995 By: /s/ Henry L. Hirvela
--------------------------------
Henry L. Hirvela
Vice President and Treasurer
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EXHIBIT 1(a)
Browning-Ferris Industries, Inc.
7.25% Automatic Common Exchange Securities
(Stated Amount $35.625 per Security)
UNDERWRITING AGREEMENT
June 28, 1995
Goldman, Sachs & Co.
CS First Boston Corporation
As Representatives of the several Underwriters
named in Schedule I hereto
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Dear Sirs:
Browning-Ferris Industries, Inc., a Delaware corporation (the "Company"),
and the several Underwriters named in Schedule I hereto (the "Underwriters")
propose, subject to the terms and conditions stated herein, to enter into the
Purchase Contracts referred to in the Purchase Contract Agreement (herein so
called) dated as of June 28, 1995, between the Company and First Chicago Trust
Company of New York, as Purchase Contract Agent (the "Agent"), underlying an
aggregate of 10,000,000 7.25% Automatic Common Exchange Securities (the "Firm
Securities"). In connection therewith, the Underwriters propose, subject to
the terms and conditions stated herein, to purchase and Pledge to the
Collateral Agent Treasury Notes of the United States Government bearing
interest at the rate of 5.125% per annum and maturing on June 30, 1998 (the
"Treasury Notes"), having an aggregate principal amount of $356,250,000. The
Company proposes to grant the Underwriters an option to enter into Purchase
Contracts underlying up to 1,500,000 additional 7.25% Automatic Common
Exchange Securities (the "Optional Securities") and, in the event any such
additional Purchase Contracts are entered into, the Underwriters propose to
purchase and Pledge to the Collateral Agent the additional Treasury Notes
underlying such Optional Securities. The Firm Securities and any Optional
Securities relating to any additional Purchase Contracts entered into by the
Company and the Underwriters are herein called the "Securities". Capitalized
terms used herein without definition shall be used as defined in the Purchase
Contract Agreement.
1. (a) The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(i) A registration statement in respect of one or more series of debt
securities, preferred stock, warrants, Common Stock and other securities
(including Securities) having an aggregate initial public offering price not
in excess of $700,000,000, including the Firm Securities and the Optional
Securities and the Purchase Contracts included in and shares of Common Stock
underlying such Securities (the "Shares"), has been filed with the
Securities and Exchange Commission (the "Commission"); such registration
statement and any post-effective amendment thereto, each in the form
heretofore
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delivered to you, and, excluding exhibits thereto but including all
documents incorporated by reference in the base prospectus contained
therein, have been declared effective by the Commission in such form; no
other document with respect to such registration statement or document
incorporated by reference therein has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that purpose
has been initiated or, to the knowledge of the Company, threatened by the
Commission (the base prospectus included in such registration statement or
filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Securities Act of 1933, as amended
(the "Act"), as supplemented to reflect the preliminary terms of the
offering of the Securities, being hereinafter called a "Preliminary
Prospectus"; (A) the various parts of such registration statement, including
all exhibits thereto and including the information contained in the form of
such base prospectus, as supplemented to reflect the final terms of the
offering of the Securities, filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof and (B) the
documents incorporated by reference in the base prospectus contained in the
registration statement at the time such part of the registration statement
became effective, each as amended at the time such part of the registration
statement became effective, being hereinafter called the "Registration
Statement"; such base prospectus, as supplemented to reflect the final terms
of the offering of the Securities, in the form first filed pursuant to Rule
424(b) under the Act, being hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated by reference in such Preliminary Prospectus or Prospectus,
as the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any quarterly or current
report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement);
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of the
Commission thereunder, 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; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through you expressly for use
therein;
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(iii) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus
or any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform
in all material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through you expressly for use
therein;
(iv) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder and do not
and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing date as
to the Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
you expressly for use therein;
(v) Neither the Company nor any of its subsidiaries identified in Schedule
II hereto (the "Principal Subsidiaries") has sustained since the date of the
latest audited financial statements included or incorporated by reference in
the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
which is material to the Company and its subsidiaries considered as a whole,
otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock (except for capital stock issued pursuant to the Company's Dividend
Reinvestment Plan or employee benefit plans or upon exercise of stock
options or the acquisition of any business or properties in the Company's
ongoing acquisition program) or increase in consolidated long-term debt of
the Company (excluding commercial paper) in excess of $100,000,000 or any
material adverse change, or any development which the Company believes will
involve a prospective material adverse change, in or affecting the Company's
management or
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the financial position or results of operations of the Company and its
subsidiaries considered as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(vi) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
full corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
or is subject to no material liability or disability by reason of the
failure to be so qualified or in good standing in any such jurisdiction; and
each Principal Subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(vii) The Company has an authorized equity capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, and are fully paid and
non-assessable and conform in all material respects to the description of
the capital stock contained in the Prospectus; and all of the issued shares
of capital stock of each Principal Subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and are
owned directly or indirectly by the Company (except for Otto
Entsorgungsdienstleistungen GmbH, 50% of the outstanding equity interests of
which are owned directly or indirectly by the Company), free and clear of
all liens, encumbrances, equities or other adverse claims;
(viii) The Purchase Contract Agreement and the Pledge Agreement have been
duly authorized, executed and delivered by the Company, and each is a valid
and binding agreement of the Company in accordance with its terms;
(ix) The Shares to be issued and sold by the Company pursuant to the
Purchase Contract Agreement and the preferred stock purchase rights (the
"Rights") to be issued with such Shares, have been duly and validly
authorized and reserved for issuance and, when issued and delivered in
accordance with the provisions of the Purchase Contract Agreement and the
Pledge Agreement, will be duly and validly issued and fully paid and non-
assessable and will conform in all material respects to the descriptions of
the Common Stock and the Rights contained in the Prospectus;
(x) The entry into the Purchase Contracts underlying the Firm Securities
and Optional Securities by the Company, the offer of such Securities as
contemplated herein and in the Prospectus, the issue and sale of the Shares
by the Company pursuant to the Purchase Contracts and the compliance by the
Company with all of the provisions of this Agreement, such Purchase
Contracts, the Purchase Contract Agreement and the Pledge Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company 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, nor will such action
result in any violation of the provisions of the Restated Certificate
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of Incorporation or By-laws of the Company or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by the
Company of the transactions contemplated by this Agreement, except the
registration under the Act of the Securities, the Purchase Contracts and the
Shares and such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign securities or Blue
Sky laws in connection with the purchase and distribution of the Securities
by the Underwriters;
(xi) Other than as set forth or contemplated in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which are required to be described in the
Prospectus and which are not described as required; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xii) No "forward looking statement" (as defined in Rule 175 under the
Act) contained in the Registration Statement, any Preliminary Prospectus or
the Prospectus was made or reaffirmed without a reasonable basis or was
disclosed other than in good faith;
(xiii) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes; and
(xiv) Arthur Andersen LLP, who have certified certain financial statements
of the Company and its subsidiaries, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder.
2. Subject to the terms and conditions herein set forth, (a) the Company and
each of the Underwriters, severally and not jointly, agree to enter into the
Purchase Contracts underlying the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule I hereto and (b) in the event and to
the extent that the Underwriters shall exercise the election to enter into
additional Purchase Contracts underlying Optional Securities as provided
below, the Company and each of the Underwriters, severally and not jointly,
agree to enter into that number of additional Purchase Contracts as to which
such election has been exercised (to be adjusted by you to eliminate
fractional Purchase Contracts) determined by multiplying such number of
additional Purchase Contracts by a fraction, the numerator of which is the
maximum number of Optional Securities set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Securities set forth in total opposite the names of all
such Underwriters in Schedule I hereto.
The Company hereby grants to the Underwriters the right to enter into at
their election up to 1,500,000 Purchase Contracts, for the sole purpose of
covering overallotments in the sale by such Underwriters of Firm Securities.
Any such election to enter into such
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additional Purchase Contracts may be exercised only by written notice from you
to the Company, given within a period of 30 calendar days after the date of
this Agreement and setting forth the aggregate number of such additional
Purchase Contracts to be entered into and the date on which the related
Optional Securities are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless you and the Company otherwise agree in writing, earlier than two or
later than ten business days after the date of such notice.
The Underwriters agree to purchase and Pledge to the Collateral Agent the
Treasury Notes underlying the Securities with respect to which the Company and
the Underwriters have entered into Purchase Contracts. Such Pledge shall be
effected by the transfer to the Collateral Agent by Federal Reserve Bank-Wire
of the Treasury Notes to be Pledged at the appropriate Time of Delivery (as
defined below) in accordance with the Pledge Agreement.
3. Upon the authorization by you of the release of the Firm Securities, the
several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. Certificates in definitive or temporary form for the Securities with
respect to which each Underwriter enters into Purchase Contracts hereunder,
and in such denominations and registered in such names as Goldman, Sachs & Co.
may request upon at least forty-eight hours' prior notice to the Company,
shall be delivered by or on behalf of the Company to you for the account of
such Underwriter, against the delivery to the Collateral Agent of the Treasury
Notes relating to such Securities by such Underwriter or on its behalf. At
such same time the Company will pay to you Underwriters' commissions in the
amount of $1.06875 per Security minus $.5532336 per Security, resulting in a
net payment to you of $.5155164 per Security, in same-day funds, all at the
office of Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004. The
time and date of such delivery and payment shall be, with respect to the Firm
Securities, 9:30 a.m., New York time, on July 5, 1995, or such other time and
date as you and the Company may agree upon in writing, and, with respect to
the Optional Securities, 9:30 a.m., New York time, on the date specified by
you in the written notice given by you of the Underwriters' election to enter
into additional Purchase Contracts underlying such Optional Securities, or
such other time and date as you and the Company may agree upon in writing.
Such time and date for delivery of the Firm Securities is herein called the
"First Time of Delivery," such time and date for delivery of the Optional
Securities, if not the First Time of Delivery, is herein called the "Second
Time of Delivery," and each such time and date of delivery is herein called a
"Time of Delivery." Unless otherwise instructed by Goldman, Sachs & Co. in the
request referred to above, such certificates will be made available for
checking and packaging at least twenty-four hours prior to each Time of
Delivery at the office of Goldman, Sachs & Co., 85 Broad Street, New York, New
York 10004.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close
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of business on the second business day following the execution and delivery
of this Agreement, or, if applicable, such earlier time as may be required
by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus prior to the last
Time of Delivery which shall be reasonably disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you copies thereof; to file
promptly 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 subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities; to advise you,
promptly after it receives notice thereof, of the issuance by the Commission
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus, of the suspension of the qualification
of the Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws
so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Securities, provided that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) Prior to 12:00 noon, New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time to furnish
the Underwriters with copies of the Prospectus in New York City in such
quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering or
sale of the Securities and if at such time any events shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act or the Exchange Act, to notify you and to file
such document and upon your concurrence to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as
you may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus
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which will correct such statement or omission or effect such compliance, and
in case any Underwriter is required to deliver a prospectus in connection
with sales of any of the Securities at any time nine months or more after
the time of issue of the Prospectus, upon your request but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as many copies
as you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including at the option of the
Company Rule 158);
(e) During the period beginning from the date hereof and continuing to 90
days after the date of the Prospectus, not to, and to use its best efforts
to cause its directors and officers and Otto Holding International B.V. not
to, offer, sell, contract to sell or otherwise dispose of any Securities,
Purchase Contracts or Common Stock or any securities of the Company that are
substantially similar to the Securities, Purchase Contracts or Common Stock
or any securities convertible into or exchangeable for Securities, Purchase
Contracts or Common Stock (other than pursuant to the conversion of
convertible securities outstanding on the date of this Agreement or the
Company's Dividend Reinvestment Plan, employee benefit plans or employee
stock option plans existing on the date of this Agreement or pursuant to the
acquisition of any business or properties in the Company's ongoing
acquisition program), without your prior written consent;
(f) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders generally, and
deliver to you (i) as soon as they are available, copies of any reports
(other than on Form 11-K) and financial statements furnished to or filed
with the Commission or any national securities exchange on which any class
of securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as you may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its shareholders
generally or to the Commission); and
(g) To use its best efforts to list, subject to notice of issuance, the
Securities and the Shares on the New York Stock Exchange.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities, the Purchase Contracts and
the Shares under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters
and dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this
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Agreement, the Blue Sky survey and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iii) all expenses in
connection with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof, including the
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Securities; (v) the
cost of preparing Security certificates and stock certificates; (vi) the cost
and charges of any transfer agent or registrar; (vii) the fees, disbursements
and expenses of Sullivan & Cromwell with respect to tax advice rendered by
such firm in connection with the offering, purchase, sale and delivery of the
Securities; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that the Company
shall bear the cost of any other matters not directly relating to the sale and
purchase of the Securities pursuant to this Agreement, and that, except as
provided in this Section, Section 8 and Section 11 hereof, the Underwriters
will pay all of their own costs and expenses, including the fees of their
counsel, stock transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Securities to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction;
(b) Vinson & Elkins L.L.P., counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated such Time of Delivery, with
respect to the incorporation of the Company, this Agreement, the validity of
the Securities being delivered at such Time of Delivery (including the
Purchase Contracts and the Shares), the Registration Statement, the
Prospectus, and other related matters as you may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Fulbright & Jaworski L.L.P., special counsel for the Company, shall
have furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and
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authority to own its properties and conduct its business as described in
the Prospectus;
(ii) The Purchase Contract Agreement, the Purchase Contracts
underlying the Securities being delivered at such Time of Delivery and
the Pledge Agreement have been duly authorized, executed and delivered
by the Company and each is a valid and legally binding agreement of the
Company (and together they create, to the extent provided therein, a
valid interest of the holders of the Securities in the Treasury Notes)
enforceable against the Company in accordance with its terms, except to
the extent that enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
laws now or hereafter in effect relating to or affecting creditors'
rights generally and by general principles of equity, provided, however,
that the rights and remedies of the Agent and the Collateral Agent
provided in Sections 402 and 508 of the Purchase Contract Agreement and
Section 4(a) of the Pledge Agreement upon the occurrence of a
Termination Event will not be limited under the Bankruptcy Code (11
U.S.C. 101 et seq.) as a consequence of Section 365(e)(2) thereof; the
certificates representing the Securities being delivered at such Time of
Delivery are in a form contemplated by the Purchase Contract Agreement;
the Pledge Agreement creates, as collateral security for the performance
when due by the Holders from time to time of the Securities of their
respective obligations under the Purchase Contracts constituting part of
such Securities, a legal and valid security interest (as that term is
defined in the Uniform Commercial Code, as adopted and in effect in the
State of New York), in favor of the Collateral Agent, in the right,
title and interest of such Holders in the Treasury Notes constituting a
part of such Securities (collectively, the "Pledged Treasury Notes");
and upon the Federal Reserve Bank through which such Pledged Treasury
Notes have been purchased making appropriate entries in its records to
reflect the transfer and pledge to the Collateral Agent of such Pledged
Treasury Notes in accordance with 31 CFR (S) 306.118(a), such security
interest will be perfected.
(iii) The Company has an authorized equity capitalization as set forth
in the initial paragraph of "Capital Stock" in the Prospectus, and all
of the Shares subject to the Purchase Contract Agreement have been duly
and validly authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Purchase Contract
Agreement and the Pledge Agreement, will be fully paid and non-
assessable; such Shares and the Securities being delivered at such Time
of Delivery conform in all material respects to the description thereof
contained in the Prospectus; and the shareholders of the Company have no
preemptive rights with respect to such Shares;
(iv) The Rights (as defined in the Prospectus) to be issued with such
Shares have been duly authorized and, upon issuance of such Shares, will
be validly issued and conform in all material respects to the
description thereof in the Prospectus;
(v) This Agreement has been duly authorized, executed and delivered by
the Company;
(vi) The entry into the Purchase Contracts underlying the Securities
being delivered at such Time of Delivery by the Company, the offer of
such Securities by
10
<PAGE>
the Company as contemplated herein and in the Prospectus, the issue and
sale of the Shares by the Company pursuant to such Purchase Contracts
and the compliance by the Company with all of the provisions of this
Agreement, such Purchase Contracts, the Purchase Contract Agreement and
the Pledge Agreement will not result in any violation of the provisions
of the Restated Certificate of Incorporation or By-laws of the Company
or any statute or any order, rule or regulation (other than federal and
state securities or Blue Sky laws and anti-fraud laws, as to which such
counsel need express no opinion in this paragraph) known to such counsel
of any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties;
(vii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the entry into the Purchase Contracts underlying the
Securities being delivered at such Time of Delivery, the offer of such
Securities by the Company as contemplated herein and in the Prospectus,
the issue and sale of the Shares by the Company pursuant to such
Purchase Contracts or the compliance by the Company with all of the
provisions of this Agreement, such Purchase Contracts, the Purchase
Contract Agreement and the Pledge Agreement, except the registration
under the Act of the Securities, the Purchase Contracts and the Shares,
and such consents, approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities
by the Underwriters;
(viii) Neither the Company nor any subsidiary is a "holding company"
or a "subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company,"
or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended; and
(ix) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such
Time of Delivery (other than the financial statements or other financial
data included therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the
Act and the rules and regulations thereunder.
In addition, such counsel shall state that during the course of the
preparation of the Registration Statement, the Prospectus and any amendment or
supplement thereto, such counsel participated in conferences with officers and
other representatives of the Company at which the contents of the Registration
Statement and the Prospectus and related matters were discussed, and that,
although such counsel are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of any portion of
the Registration Statement and Prospectus, as amended or supplemented (except
to the extent set forth in paragraph (iii) above), and such counsel has not
checked the accuracy or completeness of, or otherwise verified any
information, including statistical information, contained in the Registration
Statement and Prospectus, as amended or supplemented, such counsel advise
that, on the basis of the foregoing (relying as to materiality to a certain
extent upon officers and other representatives of the Company), no facts came
to such counsel's attention which have caused such counsel to believe
11
<PAGE>
that, as of the effective date of the Registration Statement, the Registration
Statement contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the Prospectus (or,
as of its date, any further amendment or supplement thereto made by the
Company prior to such Time of Delivery) contained, or, as of such Time of
Delivery, the Prospectus or any amendment or supplement thereto contains, an
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, except that such counsel need make no
comment with respect to the financial statements or other financial data
included in the Registration Statement or in the Prospectus or any further
amendment or supplement thereto.
(d) J. Rufus Wallingford, Senior Vice President and General Counsel of the
Company, shall have furnished to you his written opinion, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Company and each Principal Subsidiary has been duly qualified
as a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of failure to be so qualified or in good standing in any such
jurisdiction;
(ii) Each Principal Subsidiary has been duly incorporated and is an
existing corporation in good standing under the laws of its jurisdiction
of incorporation; and all of the issued shares of capital stock of each
such subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable, and are owned directly or indirectly by
the Company (except for Otto Entsorgungsdienstleistungen GmbH, 50% of
the outstanding equity interests of which are owned directly or
indirectly by the Company), free and clear of all liens, encumbrances,
equities or other adverse claims;
(iii) All of the issued shares of capital stock of the Company and
Rights (excluding the Shares and the Rights associated therewith) have
been duly and validly authorized and issued and are fully paid and non-
assessable;
(iv) The entry into the Purchase Contracts underlying the Securities
being delivered at such Time of Delivery by the Company, the offer of
such Securities by the Company as contemplated herein and in the
Prospectus, the issue and sale of the Shares by the Company pursuant to
such Purchase Contracts and the compliance by the Company with all of
the provisions of this Agreement, such Purchase Contracts, the Purchase
Contract Agreement and the Pledge Agreement will not result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel 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, nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any of its subsidiaries;
12
<PAGE>
(v) Such counsel does not know of any contracts or other documents of
a character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus or required to be described in the Registration Statement or
the Prospectus which are not filed or incorporated by reference or
described as required; and
(vi) The documents incorporated by reference in the Prospectus or any
further amendment or supplement thereto made by the Company prior to
such Time of Delivery (other than the financial statements or other
financial data included therein, as to which such counsel need express
no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder;
Further, such counsel shall state that, although he is not passing upon,
and does not assume any responsibility for the accuracy, completeness or
fairness of, any portion of the Registration Statement and the Prospectus,
as amended or supplemented, and he has not checked the accuracy or
completeness of, or otherwise verified any information, including
statistical information, contained in the Registration Statement and
Prospectus, as amended or supplemented, he advises that, on the basis of the
foregoing, no facts have come to his attention that caused him to believe
that, as of the effective date of the Registration Statement, the
Registration Statement contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that, as of its date, the
Prospectus (or, as of its date, any further amendment or supplement thereto
made by the Company prior to such Time of Delivery) contained, or, as of
such Time of Delivery, the Prospectus or any amendment or supplement thereto
contains, an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, except that he need
make no comment with respect to the financial statements or other financial
data included in the Registration Statement or in the Prospectus or any
further amendment or supplement thereto;
(e) Sullivan & Cromwell, special tax counsel for the Company and the
Underwriters, shall have furnished to you their written opinion, dated such
Time of Delivery, in form and substance satisfactory to you, to the effect
that the discussion set forth in the Prospectus under the heading "Certain
Federal Income Tax Consequences", insofar as it relates to matters of United
States federal income tax law, is accurate in all material respects;
(f) On the date of this Agreement and also at each Time of Delivery,
Arthur Andersen LLP shall have furnished to you a letter or letters, dated
the respective date of delivery thereof, in form and substance satisfactory
to you, to the effect set forth in Annex I hereto;
(g) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court
13
<PAGE>
or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of
which information is given in the Prospectus there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the Company's management or the financial position
or results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Prospectus, the effect of which, in any
such case described in Clause (i) or (ii), is in your judgment so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities being delivered at such
Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(h) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g) (2) under the Act and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the
Company's debt securities;
(i) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a general moratorium on
commercial banking activities in New York declared by either Federal or New
York State authorities; or (iii) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war if the effect of any such event specified in this
Clause (iii) in your judgment makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities being
delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(j) The Securities to be delivered at such Time of Delivery and the Shares
to be issued pursuant to the Purchase Contract Agreement shall have been
duly listed, subject to notice of issuance, on the New York Stock Exchange;
and
(k) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory
to you as to the accuracy of the representations and warranties of the
Company herein at and as of such Time of Delivery, as to the performance by
the Company of all of their respective obligations hereunder to be performed
at or prior to such Time of Delivery, and as to such other matters as you
may reasonably request, and the Company shall have furnished or caused to be
furnished certificates as to the matters set forth in subsections (a) and
(f) of this Section, and as to such other matters as you may reasonably
request.
8. (a) The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto,
14
<PAGE>
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through you expressly for use therein, and
provided, further, that the Company shall not be liable to any Underwriter
under the indemnity agreement in this subsection (a) with respect to any
misstatement or omission contained in any Preliminary Prospectus that was
identified in writing prior to the date hereof to the extent that such loss,
claim, damage or liability of such Underwriter results from the fact that such
Underwriter sold Securities to a person as to whom it shall be established
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus, as then amended or supplemented, if the
Company has previously furnished copies thereof in sufficient quantity to such
Underwriter and if such Prospectus (excluding documents incorporated by
reference) corrected such misstatement or omission.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Registration Statement or the Prospectus,
or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through you expressly
for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating
or defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (which
15
<PAGE>
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. In no event
shall the indemnifying party be liable for the fees and expenses of more than
one counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances. An indemnifying party shall
not be liable for any settlement of any action or claim effected without its
consent, which consent shall not unreasonably be withheld.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
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 from the
offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities
purchased under this Agreement (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by
the Underwriters with respect to the Securities purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault 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 on the one hand or the Underwriters on the
other 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
contributions pursuant to this subsection (d) 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 above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or
16
<PAGE>
defending any such action or claim. Notwithstanding the provisions of this
subsection (d), 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 in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in addition
to any liability which the Company may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligations it has agreed to
perform under Section 2 hereof at a Time of Delivery, you may in your
discretion arrange for you or another party or other parties to perform such
obligations on the terms contained herein. If within thirty-six hours after
such default by any Underwriter you do not arrange for the performance of such
obligations, then the Company shall be entitled to a further period of thirty-
six hours within which to procure another party or other parties satisfactory
to you to perform such obligations on such terms. In the event that, within
the respective prescribed periods, you notify the Company that you have so
arranged for the performance of such obligations, or the Company notifies you
that it has so arranged for the performance of such obligations, you or the
Company shall have the right to postpone such Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your
opinion may thereby be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to the Securities to be delivered to or for the account of such
person.
(b) If, after giving effect to any arrangements for the performance of the
obligations of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Securities
which remains undelivered does not exceed one-eleventh of the aggregate number
of all the Securities to be delivered at such Time of Delivery, then the
Company shall have the right to require each non-defaulting Underwriter to
perform its obligations under Section 2 hereof at such Time of Delivery and,
in addition, to require each non-defaulting Underwriter to enter into a pro
rata basis (based on the number of Firm Securities set forth opposite the name
of such Underwriter in Schedule I hereto) the Purchase Contracts of such
defaulting Underwriter
17
<PAGE>
or Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the performance of such
obligations of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Securities
which remains undelivered exceeds one-eleventh of the aggregate number of all
the Securities to be delivered at such Time of Delivery, or if the Company
shall not exercise the right described in subsection (b) above to require non-
defaulting Underwriters to enter into Purchase Contracts of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the
Second Time of Delivery, the obligations of the Underwriters and of the
Company with respect to the Purchase Contracts underlying the Optional
Securities and the obligations of the Underwriters to pledge the related
Treasury Notes to the Collateral Agent) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided
in Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, then
the Company shall not be under any liability to any Underwriter except as
provided in Section 6 and Section 8 hereof; but, if for any other reason, any
Securities are not delivered by or on behalf of the Company as provided
herein, the Company will reimburse the Underwriters through you for all out-
of-pocket expenses approved in writing by you, including fees and
disbursements of counsel and net out-of-pocket costs associated with arranging
for the purchase and disposition of the Treasury Notes, reasonably incurred by
the Underwriters in making preparations for the purchase, sale and delivery of
the Securities not so delivered, but the Company shall then be under no
further liability to any Underwriter in respect of the Securities not so
delivered except as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives of the Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail to you
as the representatives in care of Goldman, Sachs & Co., at 85 Broad Street,
New York, N.Y. 10004, Attention:
18
<PAGE>
Registration Department; and if to the Company shall be delivered or sent by
mail or facsimile transmission to it at 757 N. Eldridge, Houston, Texas 77079,
Attention: Henry L. Hirvela (fax no. (713) 870-7844; confirm (713) 870-7422);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire
or telex constituting such Questionnaire, which address will be supplied to
the Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters and the Company and, to the extent provided in Sections 8
and 10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser
of any of the Securities from any Underwriter shall be deemed a successor or
assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the term
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
17. The Company and the Underwriters acknowledge that Fulbright & Jaworski
L.L.P., which is acting as special counsel to the Company in connection with
the offer and sale of the Securities, also acts as counsel from time to time
to one or more of the Underwriters in connection with unrelated matters. The
Company and the Underwriters consent to Fulbright & Jaworski L.L.P. so acting
as special counsel to the Company. The Company and the Underwriters also
acknowledge that Vinson & Elkins L.L.P., which is acting as counsel to the
Underwriters in connection with the offer and sale of the Securities, also
acts as counsel from time to time to the Company and certain of its affiliates
in connection with unrelated matters. The Company and the Underwriters consent
to Vinson & Elkins L.L.P. so acting as counsel to the Underwriters. The
Company and the Underwriters acknowledge that Sullivan & Cromwell, which is
acting as special tax counsel to the Company and the Underwriters and as
special counsel to the Underwriters in connection with certain corporate
matters in connection with the offer and sale of the Securities, also acts as
counsel from time to time to one or more of the Underwriters in connection
with unrelated matters. The Company and the Underwriters consent to Sullivan &
Cromwell so acting as special tax counsel to the Company and the Underwriters
and as special counsel to the Underwriters.
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<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters and the
Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters the form of which shall be submitted to the
Company for examination, upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
BROWNING-FERRIS INDUSTRIES, INC.
By: /s/ Henry L. Hirvela
----------------------------------
Henry L. Hirvela
Vice President and Treasurer
Accepted as of the date hereof
at New York, New York:
Goldman, Sachs & Co.
CS First Boston Corporation
As Representatives of the several
Underwriters named in Schedule I hereto
By: Goldman, Sachs & Co.
/s/ Goldman, Sachs & Co.
- -------------------------------------
(Goldman, Sachs & Co.)
20
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF
OPTIONAL
TOTAL NUMBER SECURITIES TO
OF FIRM BE DELIVERED
SECURITIES IF MAXIMUM
TO OPTION
UNDERWRITER BE DELIVERED EXERCISED
----------- ------------ -------------
<S> <C> <C>
Goldman, Sachs & Co. ..... 2,700,500 405,075
CS First Boston
Corporation.............. 2,700,500 405,075
Alex. Brown & Sons
Incorporated............. 196,000 29,400
Dillon, Read & Co. Inc. .. 196,000 29,400
Donaldson, Lufkin &
Jenrette Securities
Corporation.............. 196,000 29,400
A.G. Edwards & Sons,
Inc. .................... 196,000 29,400
Kemper Securities, Inc. .. 196,000 29,400
C.J. Lawrence/Deutsche
Bank Securities
Corporation.............. 196,000 29,400
Lehman Brothers Inc. ..... 196,000 29,400
Merrill Lynch, Pierce,
Fenner & Smith
Incorporated............. 196,000 29,400
J.P. Morgan Securities
Inc. .................... 196,000 29,400
Morgan Stanley & Co.
Incorporated............. 196,000 29,400
NatWest Securities
Corporation.............. 196,000 29,400
Oppenheimer & Co., Inc. .. 196,000 29,400
Prudential Securities
Incorporated............. 196,000 29,400
Salomon Brothers Inc...... 196,000 29,400
Smith Barney Inc. ........ 196,000 29,400
UBS Securities Inc. ...... 196,000 29,400
Advest, Inc. ............. 122,000 18,300
J.C. Bradford & Co. ...... 122,000 18,300
Edward D. Jones & Co. .... 122,000 18,300
Morgan Keegan & Company,
Inc. .................... 122,000 18,300
Rauscher Pierce Refsnes,
Inc. .................... 122,000 18,300
Raymond James &
Associates, Inc. ........ 122,000 18,300
Stephens Inc. ............ 122,000 18,300
Sutro & Co. Incorporated.. 122,000 18,300
Tucker Anthony
Incorporated............. 122,000 18,300
Crowell, Weedon & Co. .... 73,000 10,950
Fahnestock & Co. Inc. .... 73,000 10,950
Johnston, Lemon & Co.
Incorporated............. 73,000 10,950
Scott & Stringfellow,
Inc. .................... 73,000 10,950
Stifel, Nicolaus &
Company, Incorporated.... 73,000 10,950
---------- ---------
Total................... 10,000,000 1,500,000
========== =========
</TABLE>
21
<PAGE>
SCHEDULE II
PRINCIPAL SUBSIDIARIES
Atwoods plc
Azusa Land Reclamation Co., Inc.
BFI Energy Systems of Hempstead, Inc.
BFI International, Inc.
Browning-Ferris, Inc. (Delaware)
Browning-Ferris, Inc. (Maryland)
Browning-Ferris Industries B.V.
Browning-Ferris Industries, Inc. (Mass.)
Browning-Ferris Industries (Italia) S.r.l.
Browning-Ferris Industries Ltd.
Browning-Ferris Industries of California, Inc.
Browning-Ferris Industries of Florida, Inc.
Browning-Ferris Industries of Illinois, Inc.
Browning-Ferris Industries of New York, Inc.
Browning-Ferris Industries of Ohio, Inc.
Browning-Ferris Industries of Pennsylvania, Inc.
Browning-Ferris Industries of South Atlantic, Inc.
Browning-Ferris Industries of Tennessee, Inc.
Browning-Ferris Industries UK Limited
Browning-Ferris Services, Inc.
Otto Entsorgungsdienstleistungen GmbH
22
<PAGE>
ANNEX I
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and schedules audited by
them and included or incorporated by reference in the Registration Statement
or the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related published rules and regulations thereunder; and,
if applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
consolidated interim financial statements, included or incorporated by
reference in the Registration Statement or the Prospectus;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred
to below, a reading of the latest available interim financial statements of
the Company and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as
may be specified in such letter, nothing came to their attention that caused
them to believe that:
(A) the unaudited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included or
incorporated by reference in the Company's Quarterly Reports on Form 10-
Q incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements of
the Exchange Act as it applies to Form 10-Q and the related published
rules and regulations thereunder or are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with the basis for the audited consolidated statements of
income, consolidated balance sheets and consolidated statements of cash
flows included or incorporated by reference in the Company's Annual
Report on Form 10-K for the most recent fiscal year;
(B) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated common
stock (other than issuances of common stock pursuant to (1) the
Company's Dividend Reinvestment Plan, employee benefit plans or stock
option plans in each case which were in effect on the date of the latest
balance sheet included or incorporated by reference in the Prospectus,
(2) the conversion of convertible securities outstanding on the date of
the Underwriting Agreement (specifying the number of shares so issued)
or (3) business acquisitions (specifying the number of shares so
issued)) or any increase in excess of 5% in the consolidated long-term
debt of the Company and
A-1
<PAGE>
its subsidiaries, or any decreases in consolidated net assets, in each
case as compared with amounts shown in the latest balance sheet included
or incorporated by reference in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(C) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (B) there were any decreases in consolidated
revenues or the total or per share amounts of consolidated net income,
in each case as compared with the comparable period of the preceding
year, except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter; and
(iv) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraph (iii) above, they have carried out certain specified procedures,
not constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the representatives of the Underwriters (the
"Representatives") which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference) or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives or
in documents incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
A-2
<PAGE>
EXHIBIT 4(i)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BROWNING-FERRIS INDUSTRIES, INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS PURCHASE CONTRACT AGENT
---------------------
PURCHASE CONTRACT AGREEMENT
---------------------
DATED AS OF JUNE 28, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions................................................... 1
Act...................................................................... 1
Affiliate................................................................ 2
Agent.................................................................... 2
Agreement................................................................ 2
Applicable Market Value.................................................. 2
Board of Directors....................................................... 2
Board Resolution......................................................... 2
Business Day............................................................. 2
Closing Price............................................................ 2
Collateral Agent......................................................... 2
Common Stock............................................................. 2
Company.................................................................. 3
Contract Fee............................................................. 3
Corporate Trust Office................................................... 3
Current Market Price..................................................... 3
Depositary............................................................... 3
Early Settlement......................................................... 3
Early Settlement Amount.................................................. 3
Early Settlement Date.................................................... 3
Early Settlement Rate.................................................... 3
Exchange Act............................................................. 3
Excess Treasury Notes.................................................... 3
Expiration Date.......................................................... 3
Expiration Time.......................................................... 3
Final Settlement Date.................................................... 3
Global Security Certificate.............................................. 3
Holder................................................................... 4
Issuer Order............................................................. 4
Issuer Request........................................................... 4
NYSE..................................................................... 4
Officers' Certificate.................................................... 4
Opinion of Counsel....................................................... 4
Outstanding Securities................................................... 4
Outstanding Security Certificates........................................ 5
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Payment Date............................................................. 5
Person................................................................... 5
Pledge................................................................... 5
Pledge Agreement......................................................... 5
Predecessor Security Certificate......................................... 5
Purchase Contract........................................................ 5
Purchased Shares......................................................... 6
Record Date.............................................................. 6
Reorganization Event..................................................... 6
Responsible Officer...................................................... 6
Security................................................................. 6
Security Certificate..................................................... 6
Security Register........................................................ 6
Security Registrar....................................................... 6
Settlement Rate.......................................................... 6
Stated Amount............................................................ 6
Termination Date......................................................... 6
Termination Event........................................................ 6
Threshold Appreciation Price............................................. 7
TIA...................................................................... 7
Trading Day.............................................................. 7
Treasury Notes........................................................... 7
Underwriting Agreement................................................... 7
Vice President........................................................... 7
Section 102. Compliance Certificates and Opinions.......................... 7
Section 103. Form of Documents Delivered to Agent.......................... 8
Section 104. Acts of Holders; Record Dates................................. 9
Section 105. Notices, etc., to Agent and the Company....................... 10
Section 106. Notice to Holders; Waiver..................................... 11
Section 107. Effect of Headings and Table of Contents...................... 11
Section 108. Successors and Assigns........................................ 12
Section 109. Separability Clause........................................... 12
Section 110. Benefits of Agreement......................................... 12
Section 111. Governing Law................................................. 12
Section 112. Legal Holidays................................................ 12
Section 113. Counterparts.................................................. 13
Section 114. Inspection of Agreement....................................... 13
ARTICLE TWO
Security Certificate Forms
Section 201. Forms of Security Certificates Generally...................... 13
Section 202. Form of Agent's Certificate of Authentication................. 14
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
ARTICLE THREE
The Securities
<S> <C>
Section 301. Title and Terms; Denominations............................... 14
Section 302. Rights and Obligations Evidenced by the Security Certifi-
cates................................................................... 14
Section 303. Execution, Authentication, Delivery and Dating............... 15
Section 304. Temporary Security Certificates.............................. 16
Section 305. Registration; Registration of Transfer and Exchange.......... 16
Section 306. Mutilated, Destroyed, Lost and Stolen Security Certificates.. 19
Section 307. Persons Deemed Owners........................................ 20
Section 308. Cancellation................................................. 20
Section 309. Securities Not Separable..................................... 21
ARTICLE FOUR
The Treasury Notes
Section 401. Payment of Interest; Interest Rights Preserved............... 21
Section 402. Transfer of Treasury Notes Upon Occurrence of Termination
Event....................................................... 22
ARTICLE FIVE
The Purchase Contracts
Section 501. Purchase of Shares of Common Stock........................... 23
Section 502. Contract Fees................................................ 25
Section 503. Deferral of Payment Dates For Contract Fee................... 26
Section 504. Payment of Purchase Price.................................... 26
Section 505. Issuance of Shares of Common Stock........................... 26
Section 506. Adjustment of Settlement Rate................................ 27
Section 507. Notice of Adjustments and Certain Other Events............... 34
Section 508. Termination Event; Notice.................................... 34
Section 509. Early Settlement............................................. 35
Section 510. No Fractional Shares......................................... 37
Section 511. Charges and Taxes............................................ 37
ARTICLE SIX
Remedies
Section 601. Unconditional Right of Holders to Receive Contract Fee....... 38
Section 602. Restoration of Rights and Remedies........................... 38
Section 603. Rights and Remedies Cumulative............................... 38
Section 604. Delay or Omission Not Waiver................................. 39
Section 605. Undertaking for Costs........................................ 39
Section 606. Waiver of Stay or Extension Laws............................. 39
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
ARTICLE SEVEN
The Agent
<S> <C>
Section 701. Certain Duties and Responsibilities.......................... 40
Section 702. Notice of Default............................................ 41
Section 703. Certain Rights of Agent...................................... 41
Section 704. Not Responsible for Recitals or Issuance of Securities....... 42
Section 705. May Hold Securities.......................................... 42
Section 706. Money Held in Trust.......................................... 42
Section 707. Compensation and Reimbursement............................... 42
Section 708. Corporate Agent Required; Eligibility........................ 43
Section 709. Resignation and Removal; Appointment of Successor............ 43
Section 710. Acceptance of Appointment by Successor....................... 44
Section 711. Merger, Conversion, Consolidation or Succession to Business.. 45
Section 712. Preservation of Information; Communications to Holders....... 45
Section 713. No Obligations of Agent...................................... 46
Section 714. Tax Compliance............................................... 46
ARTICLE EIGHT
Supplemental Agreements
Section 801. Supplemental Agreements Without Consent of Holders........... 47
Section 802. Supplemental Agreements with Consent of Holders.............. 48
Section 803. Execution of Supplemental Agreements......................... 48
Section 804. Effect of Supplemental Agreements............................ 49
Section 805. Reference to Supplemental Agreements......................... 49
ARTICLE NINE
Consolidation, Merger, Sale or Conveyance
Section 901. Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions............................. 49
Section 902. Rights and Duties of Successor Corporation................... 50
Section 903. Opinion of Counsel to Agent.................................. 50
ARTICLE TEN
Covenants
Section 1001. Performance Under Purchase Contracts........................ 51
Section 1002. Maintenance of Office or Agency............................. 51
Section 1003. Company to Reserve Common Stock............................. 52
Section 1004. Covenants as to Common Stock................................ 52
Section 1005. Statements of Officers of the Company as to Default......... 52
TESTIMONIUM............................................................... 52
SIGNATURES................................................................ 52
EXHIBIT A Form of Security Certificate
</TABLE>
iv
<PAGE>
PURCHASE CONTRACT AGREEMENT, dated as of June 28, 1995, between BROWNING-
FERRIS INDUSTRIES, INC., a Delaware corporation (the "Company"), and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association, acting as purchase
contract agent for the Holders of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this Agreement
and the Security Certificates evidencing the Securities.
All things necessary to make the Company's obligations under the Securities,
when the Security Certificates are executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent, as in this
Agreement provided, the valid obligations of the Company, and to constitute
these presents a valid agreement of the Company, in accordance with its terms,
have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular; and
(2) the words "herein," "hereof" and "hereunder" and other words of sim-
ilar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" when used with respect to any Holder, has the meaning specified in
Section 104.
<PAGE>
"Affiliate" of any specified Person means any other Person directly or indi-
rectly controlling or controlled by or under direct or indirect common control
with such specified Person. For the purposes of this definition, "control"
when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the forego-
ing.
"Agent" means the Person named as the "Agent" in the first paragraph of this
instrument until a successor Agent shall have become such pursuant to the ap-
plicable provisions of this Agreement, and thereafter "Agent" shall mean the
Person who is then the Agent hereunder.
"Agreement" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 501.
"Board of Directors" means the board of directors of the Company or a duly
authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of Directors,
a copy of which has been certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted by the Board of Directors and to be
in full force and effect on the date of such certification and delivered to
the Agent.
"Business Day" means any day that is not a Saturday, Sunday or a day on
which the NYSE or banking institutions or trust companies in The City of New
York or Chicago, Illinois are authorized or obligated by law or executive or-
der to be closed.
"Closing Price" has the meaning specified in Section 501.
"Collateral Agent" means Texas Commerce Bank National Association, as Col-
lateral Agent under the Pledge Agreement until a successor Collateral Agent
shall have become such pursuant to the applicable provisions of the Pledge
Agreement, and thereafter "Collateral Agent" shall mean the Person who is then
the Collateral Agent thereunder.
"Common Stock" means the Common Stock, par value $0.16 2/3 per share, of the
Company.
2
<PAGE>
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such, and thereafter "Com-
pany" shall mean such successor.
"Contract Fee" means the fee payable by the Company in respect of each Pur-
chase Contract, equal to 2.125% per annum of the Stated Amount, accruing from
July 5, 1995, computed on the basis of the actual number of days elapsed in a
year of 365 or 366 days, as the case may be, plus any additional fees accrued
pursuant to Section 503; except that on the initial Payment Date the Contract
Fee shall be reduced by an amount equal to accrued interest to July 5, 1995,
on the Treasury Note constituting a part of a Security.
"Corporate Trust Office" means the principal office of the Agent in the Bor-
ough of Manhattan, The City of New York, at which at any particular time its
corporate trust business shall be administered, which office at the date
hereof is located at 14 Wall Street, 8th Floor, New York, New York 10005.
"Current Market Price" has the meaning specified in Section 506(a)(8).
"Depositary" means a clearing agency registered under the Exchange Act that
is designated to act as Depositary for the Securities as contemplated by Sec-
tion 305.
"Early Settlement" has the meaning specified in Section 509(a).
"Early Settlement Amount" has the meaning specified in Section 509(a).
"Early Settlement Date" has the meaning specified in Section 509(a).
"Early Settlement Rate" has the meaning specified in Section 509(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Excess Treasury Notes" has the meaning specified in Section 402.
"Expiration Date" has the meaning specified in Section 104.
"Expiration Time" has the meaning specified in Section 506(a)(6).
"Final Settlement Date" means June 30, 1998.
"Final Settlement Fund" has the meaning specified in Section 505.
"Global Security Certificate" means a Security Certificate that evidences
all or part of the Securities and is registered in the name of a Depositary or
a nominee thereof.
3
<PAGE>
"Holder," when used with respect to a Security Certificate (or a Security),
means a Person in whose name the Security evidenced by such Security Certifi-
cate (or the Security Certificate evidencing such Security) is registered in
the Security Register.
"Issuer Order" or "Issuer Request" means a written order or request signed
in the name of the Company by its Chairman of the Board, any Vice Chairman,
its President or a Vice President and by its Treasurer, an Assistant Treasur-
er, its Secretary or an Assistant Secretary, and delivered to the Agent.
"NYSE" has the meaning specified in Section 501.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, any Vice Chairman, the President or any Vice President and by the Trea-
surer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the
Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by legal counsel,
who may be an employee of or counsel to the Company.
"Outstanding Securities" means, as of the date of determination, all Securi-
ties evidenced by then Outstanding Security Certificates, except:
(i) If a Termination Event has occurred, Securities for which the under-
lying Treasury Notes have been theretofore deposited with the Agent in
trust for the Holders of such Securities; and
(ii) On and after the applicable Early Settlement Date, Securities as to
which the Holder has elected to effect Early Termination of the related
Purchase Contracts;
provided, however, that in determining whether the Holders of the requisite
number of Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Company or any
Affiliate of the Company shall be disregarded and deemed not to be outstand-
ing, except that, in determining whether the Agent shall be protected in rely-
ing upon any such request, demand, authorization, direction, notice, consent
or waiver, only Securities which the Agent knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Agent the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any Affiliate of the Company.
4
<PAGE>
"Outstanding Security Certificates" means, as of the date of determination,
all Security Certificates theretofore authenticated, executed and delivered
under this Agreement, except:
(i) Security Certificates theretofore cancelled by the Agent or deliv-
ered to the Agent for cancellation; and
(ii) Security Certificates in exchange for or in lieu of which other Se-
curity Certificates have been authenticated, executed on behalf of the
Holder and delivered pursuant to this Agreement, other than any such Secu-
rity Certificate in respect of which there shall have been presented to
the Agent proof satisfactory to it that such Security Certificate is held
by a bona fide purchaser in whose hands the Securities evidenced by such
Security Certificate are valid obligations of the Company.
"Payment Date" means each June 30 and December 31, commencing December 31,
1995.
"Person" means any individual, corporation, limited liability company, part-
nership, joint venture, association, joint-stock company, trust, unincorpo-
rated organization or government or any agency or political subdivision there-
of.
"Pledge" means the pledge under the Pledge Agreement of the Treasury Notes
constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date hereof,
among the Company, the Collateral Agent and the Agent, on its own behalf and
as attorney-in-fact for the Holders from time to time of the Securities.
"Predecessor Security Certificate" of any particular Security Certificate
means every previous Security Certificate evidencing all or a portion of the
rights and obligations of the Holder under the Securities evidenced thereby;
and, for the purposes of this definition, any Security Certificate authenti-
cated and delivered under Section 306 in exchange for or in lieu of a mutilat-
ed, destroyed, lost or stolen Security Certificate shall be deemed to evidence
the same rights and obligations of the Holder as the mutilated, destroyed,
lost or stolen Security Certificate.
"Purchase Contract," when used with respect to any Security, means the con-
tract obligating the Company to sell and the Holder of such Security to pur-
chase Common Stock on the terms and subject to the conditions set forth in Ar-
ticle Five hereof.
5
<PAGE>
"Purchased Shares" has the meaning specified in Section 506(a)(6).
"Record Date" for the interest and Contract Fees payable on any Payment Date
means the Business Day next preceding such Payment Date.
"Reorganization Event" has the meaning specified in Section 506(b).
"Responsible Officer," when used with respect to the Agent, means any offi-
cer of the Agent assigned by the Agent to administer its corporate trust mat-
ters.
"Security" means the collective rights and obligations of a Holder of a Se-
curity Certificate in respect of Treasury Notes with a principal amount equal
to the Stated Amount, subject to the Pledge thereof, and a Purchase Contract.
"Security Certificate" means a certificate evidencing the rights and obliga-
tions of a Holder in respect of the number of Securities specified on such
certificate.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Settlement Rate" has the meaning specified in Section 501.
"Stated Amount" means $35.625.
"Termination Date" means the date, if any, on which a Termination Event oc-
curs.
"Termination Event" means the occurrence of any of the following events: (i)
at any time on or prior to the Final Settlement Date, a decree or order by a
court having jurisdiction in the premises shall have been entered adjudging
the Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization of the Company under the United States Bankruptcy Code
or any other similar applicable Federal or State law, and, unless such decree
or order shall have been entered within 60 days prior to the Final Settlement
Date, such decree or order shall have continued undischarged and unstayed for
a period of 60 days; or (ii) a decree or order of a court having jurisdiction
in the premises for the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of the Company or of its property, or for
the winding up or liquidation of its affairs, shall have been entered, and,
unless such decree or order shall have been entered within 60
6
<PAGE>
days prior to the Final Settlement Date, such decree or order shall have con-
tinued undischarged and unstayed for a period of 60 days, or (iii) at any time
on or prior to the Final Settlement Date the Company shall institute proceed-
ings to be adjudicated a bankrupt, or shall consent to the filing of a bank-
ruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization under the United States Bankruptcy Code or any other
similar applicable Federal or State law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of its property,
or shall make an assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in Section 501.
"TIA" means the Trust Indenture Act of 1939, as amended, or any successor
statute.
"Trading Day" has the meaning specified in Section 501.
"Treasury Notes" means 5.125% United States Treasury Notes due June 30,
1998.
"Underwriting Agreement" means the Underwriting Agreement dated June 28,
1995 between the Company and Goldman, Sachs & Co. and CS First Boston Corpora-
tion, as representatives of the several Underwriters named therein.
"Vice President" means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president."
Section 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any applica-
tion or request by the Company to the Agent to take any action under any pro-
vision of this Agreement, the Company shall furnish to the Agent an Officers'
Certificate stating that all conditions precedent, if any, provided for in
this Agreement relating to the proposed action have been complied with and an
Opinion of Counsel stating that, in the opinion of such counsel, all such con-
ditions precedent, if any, have been complied with, except that in the case of
any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Agreement relating to
7
<PAGE>
such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Agreement shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such cer-
tificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condi-
tion has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified by, or cov-
ered by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, inso-
far as it relates to legal matters, upon a certificate or opinion of, or rep-
resentations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representa-
tions with respect to the matters upon which his certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the in-
formation with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect
to such matters are erroneous.
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Where any Person is required to make, give or execute two or more applica-
tions, requests, consents, certificates, statements, opinions or other instru-
ments under this Agreement, they may, but need not, be consolidated and form
one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially simi-
lar tenor signed by such Holders in person or by agent duly appointed in writ-
ing; and, except as herein otherwise expressly provided, such action shall be-
come effective when such instrument or instruments are delivered to the Agent
and, where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing ap-
pointing any such agent shall be sufficient for any purpose of this Agreement
and (subject to Section 701) conclusive in favor of the Agent and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
a certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instru-
ment or writing acknowledged to him the execution thereof. Where such execu-
tion is by a signer acting in a capacity other than his individual capacity,
such certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writ-
ing, or the authority of the Person executing the same, may also be proved in
any other manner which the Agent deems sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security Certificate evidencing such
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered
to be done by the Agent or the Company in reliance thereon, whether or not no-
tation of such action is made upon such Security Certificate.
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(e) The Company may set any day as a record date for the purpose of deter-
mining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Agreement to be given, made or
taken by Holders of Securities. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities on such record date, and no
other Holders, shall be entitled to take the relevant action, whether or not
such Holders remain Holders after such record date; provided that no such ac-
tion shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite number of Outstanding Securities
on such record date. Nothing in this paragraph shall be construed to prevent
the Company from setting a new record date for any action for which a record
date has previously been set pursuant to this paragraph (whereupon the record
date previously set shall automatically and with no action by any Person be
cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite number of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own ex-
pense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Agent in writing and to
each Holder of Securities in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the Company
may designate any date as the "Expiration Date" and from time to time may
change the Expiration Date to any earlier or later day; provided that no such
change shall be effective unless notice of the proposed new Expiration Date is
given to the Agent in writing, and to each Holder of Securities in the manner
set forth in Section 106, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the Company shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this para-
graph. Notwithstanding the foregoing, no Expiration Date shall be later than
the 180th day after the applicable record date.
Section 105. Notices, etc., to Agent and the Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Agreement to be
made upon, given or furnished to, or filed with,
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(1) the Agent by any Holder or by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Agent at One First National
Plaza, Suite 0126, Chicago, Illinois, 60670-0126, Attention: Corporate
Trust Services Division, or at any other address previously furnished in
writing by the Agent to the Holders and the Company, or
(2) the Company by the Agent or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Company at Browning-Ferris
Building, 757 North Eldridge, P.O. Box 3151, Houston, Texas 77253, Atten-
tion: Treasurer, or at any other address previously furnished in writing
to the Agent by the Company.
Section 106. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such no-
tice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Agent, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Agent shall con-
stitute a sufficient notification for every purpose hereunder.
Section 107. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
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Section 108. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall bind its
successors and assigns, whether so expressed or not.
Section 109. Separability Clause.
In case any provision in this Agreement or in the Securities shall be inval-
id, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
Section 110. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereun-
der and the Holders, any benefits or any legal or equitable right, remedy or
claim under this Agreement. The Holders from time to time shall be beneficia-
ries of this Agreement and shall be bound by all of the terms and conditions
hereof and of the Securities evidenced by their Security Certificates by their
acceptance of delivery thereof.
Section 111. Governing Law.
This Agreement and the Securities shall be governed by and construed in ac-
cordance with the laws of the State of New York.
Section 112. Legal Holidays.
In any case where any Payment Date, any Early Settlement Date or the Final
Settlement Date shall not be a Business Day, then (notwithstanding any other
provision of this Agreement or of the Securities) payment in respect of inter-
est on Treasury Notes or Contract Fees shall not be made, Purchase Contracts
shall not be performed and Early Settlement shall not be effected on such
date, but such payments shall be made, or the Purchase Contracts shall be per-
formed or Early Settlement effected, as applicable, on the next succeeding
Business Day with the same force and effect as if made on such Payment Date,
Early Settlement Date or Final Settlement Date, as the case may be; provided,
that no interest shall accrue or be payable by the Company or any Holder for
the period from and after any such Payment Date, Early Settlement Date or Fi-
nal Settlement Date, as the case may be.
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Section 113. Counterparts.
This Agreement may be executed in any number of counterparts, each of which,
when so executed, shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
Section 114. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times at the
Corporate Trust Office for inspection by any Holder.
ARTICLE TWO
Security Certificate Forms
Section 201. Forms of Security Certificates Generally.
The Security Certificates (including the form of Purchase Contracts forming
part of the Securities evidenced thereby) shall be in substantially the form
set forth in Exhibit A hereto, with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed, litho-
graphed or engraved thereon as may be required by the rules of any securities
exchange on which the Securities are listed or Depositary therefor, or as may,
consistently herewith, be determined by the officers of the Company executing
such Security Certificates, as evidenced by their execution of the Security
Certificates.
The definitive Security Certificates shall be printed, lithographed or en-
graved on steel engraved borders or may be produced in any other manner, all
as determined by the officers of the Company executing the Security Certifi-
cates, consistent with the provisions of this Agreement, as evidenced by their
execution thereof.
Every Global Security Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the fol-
lowing form:
THIS SECURITY CERTIFICATE IS A GLOBAL SECURITY CERTIFICATE WITHIN THE
MEANING OF THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY
CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY CER-
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<PAGE>
TIFICATE REGISTERED, AND NO TRANSFER OF THIS SECURITY CERTIFICATE IN WHOLE
OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DE-
SCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Section 202. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the Securities
shall be in substantially the form set forth on the form of the Security Cer-
tificates.
ARTICLE THREE
The Securities
Section 301. Title and Terms; Denominations.
The aggregate number of Securities evidenced by Security Certificates au-
thenticated, executed on behalf of the Holders and delivered hereunder is lim-
ited to 10,000,000 (subject to increase up to a maximum of 1,500,000 to the
extent the over-allotment option of the underwriters under the Underwriting
Agreement is exercised), except for Security Certificates authenticated, exe-
cuted and delivered upon registration of transfer of, in exchange for, or in
lieu of, other Security Certificates pursuant to Section 304, 305, 306, 509 or
805.
The Security Certificates shall be issuable only in registered form and only
in denominations of a single Security and any integral multiple thereof.
Section 302. Rights and Obligations Evidenced by the Security Certificates.
Each Security Certificate shall evidence the number of Securities specified
therein, with each such Security representing the ownership by the Holder
thereof of Treasury Notes with a principal amount equal to the Stated Amount,
subject to the Pledge of such Treasury Notes by such Holder pursuant to the
Pledge Agreement, and the rights and obligations of the Holder under one Pur-
chase Contract. Prior to the purchase, if any, of shares of Common Stock under
the Purchase Contracts, the Securities shall not entitle the Holders to any of
the rights of a holder of shares of Common Stock, including, without limita-
tion, the right to vote or receive any dividends or other payments or to con-
sent or to receive notice as stockholders in respect of the meetings of
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<PAGE>
stockholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as stockholders of the Company, except
to the extent otherwise expressly provided in this Agreement.
Section 303. Execution, Authentication, Delivery and Dating.
Upon the execution and delivery of this Agreement, and at any time and from
time to time thereafter, the Company may deliver Security Certificates exe-
cuted by the Company to the Agent for authentication, execution on behalf of
the Holders and delivery, together with its Issuer Order for authentication of
such Security Certificates, and the Agent in accordance with such Issuer Order
shall authenticate, execute on behalf of the Holder and deliver such Security
Certificates.
The Security Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Security Certificates may be manual or facsimile.
Security Certificates bearing the manual or facsimile signatures of individ-
uals who were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Security
Certificates or did not hold such offices at the date of such Security Certif-
icates.
No Purchase Contract underlying a Security evidenced by a Security Certifi-
cate shall be valid until such Security Certificate has been executed on be-
half of the Holder by the manual signature of an authorized signatory of the
Agent, as such Holder's attorney-in-fact. Such signature by an authorized sig-
natory of the Agent shall be conclusive evidence that the Holder of such Secu-
rity Certificate has entered into the Purchase Contracts underlying the Secu-
rities evidenced by such Security Certificate.
Each Security Certificate shall be dated the date of its authentication.
No Security Certificate shall be entitled to any benefit under this Agree-
ment or be valid or obligatory for any purpose unless there appears on such
Security Certificate a certificate of authentication substantially in the form
provided for herein executed by an authorized signatory of the Agent by
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<PAGE>
manual signature, and such certificate upon any Security Certificate shall be
conclusive evidence, and the only evidence, that such Security Certificate has
been duly authenticated and delivered hereunder.
Section 304. Temporary Security Certificates.
Pending the preparation of definitive Security Certificates, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate, exe-
cute on behalf of the Holders, and deliver, in lieu of such definitive Secu-
rity Certificates, temporary Security Certificates which are in substantially
the form set forth in Exhibit A hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements print-
ed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Securities are listed, or as may, consist-
ently herewith, be determined by the officers of the Company executing such
Security Certificates, as evidenced by their execution of the Security Certif-
icates.
If temporary Security Certificates are issued, the Company will cause defin-
itive Security Certificates to be prepared without unreasonable delay. After
the preparation of definitive Security Certificates, the temporary Security
Certificates shall be exchangeable for definitive Security Certificates upon
surrender of the temporary Security Certificates at the Corporate Trust Of-
fice, at the expense of the Company and without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Security Certificates,
the Company shall execute and deliver to the Agent, and the Agent shall au-
thenticate, execute on behalf of the Holder, and deliver in exchange therefor,
one or more definitive Security Certificates of authorized denominations and
evidencing a like number of Securities as the temporary Security Certificate
or Security Certificates so surrendered. Until so exchanged, the temporary Se-
curity Certificates shall in all respects evidence the same benefits and the
same obligations with respect to the Securities evidenced thereby as defini-
tive Security Certificates.
Section 305. Registration; Registration of Transfer and Exchange.
The Agent shall keep at the Corporate Trust Office a register (the register
maintained in such office being herein referred to as the "Security Register")
in which, subject to such reasonable regulations as it may prescribe, the
Agent shall provide for the registration of Security Certificates and of
transfers of Security Certificates (the Agent, in such capacity, the "Security
Registrar").
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Upon surrender for registration of transfer of any Security Certificate at
the Corporate Trust Office, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the designated
transferee or transferees, and deliver, in the name of the designated trans-
feree or transferees, one or more new Security Certificates of any authorized
denominations and evidencing a like number of Securities.
At the option of the Holder, Security Certificates may be exchanged for
other Security Certificates, of any authorized denominations and evidencing a
like number of Securities, upon surrender of the Security Certificates to be
exchanged at the Corporate Trust Office. Whenever any Security Certificates
are so surrendered for exchange, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver the Security Certificates which the Holder making the exchange is en-
titled to receive.
All Security Certificates issued upon any registration of transfer or ex-
change of a Security Certificate shall evidence the ownership of the same num-
ber of Securities and be entitled to the same benefits and subject to the same
obligations, under this Agreement as the Securities evidenced by the Security
Certificate surrendered upon such registration of transfer or exchange.
Every Security Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Agent) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Agent duly executed, by the Holder thereof or his attorney
duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange
of a Security Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Security Certificates, other than any exchanges pursuant to Sec-
tions 306 and 805 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to execute
and deliver to the Agent, and the Agent shall not be obligated to authenti-
cate, execute on behalf of the Holder and deliver any Security Certificate
presented or surrendered for registration of transfer or for exchange on
17
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or after the Final Settlement Date or the Termination Date. In lieu of deliv-
ery of a new Security Certificate, upon satisfaction of the applicable condi-
tions specified above in this Section and receipt of appropriate registration
or transfer instructions from such Holder, the Agent shall (i) if the Final
Settlement Date has occurred, deliver the shares of Common Stock issuable in
respect of the Purchase Contracts forming a part of the Securities evidenced
by such Security Certificate, or (ii) if a Termination Event shall have oc-
curred prior to the Final Settlement Date, transfer the principal amount of
the Treasury Notes evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of Article Five
hereof.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Security Certificates:
(1) Each Global Security Certificate authenticated and executed on be-
half of the Holders under this Agreement shall be registered in the name
of the Depositary designated for such Global Security Certificate or a
nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Security Certificate shall con-
stitute a single Security Certificate for all purposes of this Agreement.
(2) Notwithstanding any other provision in this Agreement, no Global Se-
curity Certificate may be exchanged in whole or in part for Security Cer-
tificates registered, and no transfer of a Global Security Certificate in
whole or in part may be registered, in the name of any Person other than
the Depositary for such Global Security Certificate or a nominee thereof
unless (A) such Depositary (i) has notified the Company that it is unwill-
ing or unable to continue as Depositary for such Global Security Certifi-
cate or (ii) has ceased to be a clearing agency registered under the Ex-
change Act or (b) there shall have occurred and be continuing a default by
the Company in respect to its obligations under one or more Purchase Con-
tracts.
(3) Subject to Clause (2) above, any exchange of a Global Security Cer-
tificate for other Security Certificates may be made in whole or in part,
and all Security Certificates issued in exchange for a Global Security
Certificate or any portion thereof shall be registered in such names as
the Depositary for such Global Security Certificate shall direct.
(4) Every Security Certificate authenticated and delivered upon regis-
tration of transfer of, or in exchange for or in lieu of, a Global Secu-
rity Certificate or any portion thereof, whether pursuant to this Section,
Section 304, 306, 509 or 805 or otherwise, shall be authenticated, exe-
cuted on behalf of the Holders and delivered in the form of, and shall be,
a Global Security Certificate, unless such Security Certificate is regis-
tered
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in the name of a Person other than the Depositary for such Global Security
Certificate or a nominee thereof.
Section 306. Mutilated, Destroyed, Lost and Stolen Security Certificates.
If any mutilated Security Certificate is surrendered to the Agent, the Com-
pany shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new Secu-
rity Certificate, evidencing the same number of Securities and bearing a num-
ber not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence to
their satisfaction of the destruction, loss or theft of any Security Certifi-
cate, and (ii) such security or indemnity as may be required by them to save
each of them and any agent of any of them harmless, then, in the absence of
notice to the Company or the Agent that such Security Certificate has been ac-
quired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen Security
Certificate, a new Security Certificate, evidencing the same number of Securi-
ties and bearing a number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to execute
and deliver to the Agent, and the Agent shall not be obligated to authenti-
cate, execute on behalf of the Holder, and deliver to the Holder, a Security
Certificate on or after the Final Settlement Date or the Termination Date. In
lieu of delivery of a new Security Certificate, upon satisfaction of the ap-
plicable conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent shall (i) if
the Final Settlement Date has occurred, deliver the shares of Common Stock is-
suable in respect of the Purchase Contracts forming a part of the Securities
evidenced by such Security Certificate, or (ii) if a Termination Event shall
have occurred prior to the Final Settlement Date, transfer the principal
amount of the Treasury Notes evidenced thereby, in each case subject to the
applicable conditions and in accordance with the applicable provisions of Ar-
ticle Five hereof.
Upon the issuance of any new Security Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum suffi-
cient to cover any tax or other governmental charge that may be imposed
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<PAGE>
in relation thereto and any other expenses (including the fees and expenses of
the Agent) connected therewith.
Every new Security Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security Certificate shall constitute an origi-
nal additional contractual obligation of the Company and of the Holder,
whether or not the destroyed, lost or stolen Security Certificate shall be at
any time enforceable by anyone, and shall be entitled to all the benefits and
be subject to all the obligations of this Agreement equally and proportion-
ately with any and all other Security Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to the ex-
tent lawful) all other rights and remedies with respect to the replacement or
settlement of mutilated, destroyed, lost or stolen Security Certificates.
Section 307. Persons Deemed Owners.
Prior to due presentment of a Security Certificate for registration of
transfer, the Company and the Agent, and any agent of the Company or the
Agent, may treat the Person in whose name such Security Certificate is regis-
tered as the owner of the Securities evidenced thereby, for the purpose of re-
ceiving payments of interest on the Treasury Notes, receiving payments of Con-
tract Fees, performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not the payment of interest on the Treasury Notes or
any Contract Fee payable in respect of the Purchase Contracts constituting a
part of the Securities evidenced thereby shall be overdue and notwithstanding
any notice to the contrary, and neither the Company nor the Agent, nor any
agent of the Company or the Agent, shall be affected by notice to the con-
trary.
Notwithstanding the foregoing, with respect to any Global Security Certifi-
cate, nothing herein shall prevent the Company, the Agent or any agent of the
Company or the Agent, from giving effect to any written certification, proxy
or other authorization furnished by any Depositary (or its nominee), as a
Holder, with respect to such Global Security Certificate or impair, as between
such Depositary and owners of beneficial interests in such Global Security
Certificate, the operation of customary practices governing the exercise of
rights of such Depositary (or its nominee) as Holder of such Global Security
Certificate.
Section 308. Cancellation.
All Security Certificates surrendered for delivery of shares of Common Stock
on or after the Final Settlement Date, transfer of Treasury Notes after
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<PAGE>
the occurrence of a Termination Event or pursuant to an Early Settlement or
registration of transfer or exchange shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already cancelled, shall
be promptly cancelled by it. The Company may at any time deliver to the Agent
for cancellation any Security Certificates previously authenticated, executed
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Security Certificates so delivered shall, upon Issuer Or-
der, be promptly cancelled by the Agent. No Security Certificates shall be au-
thenticated, executed on behalf of the Holder and delivered in lieu of or in
exchange for any Security Certificates cancelled as provided in this Section,
except as expressly permitted by this Agreement. All cancelled Security Cer-
tificates held by the Agent shall be disposed of as directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire any Security
Certificate, such acquisition shall not operate as a cancellation of such Se-
curity Certificate unless and until such Security Certificate is delivered to
the Agent cancelled or for cancellation.
Section 309. Securities Not Separable.
Notwithstanding anything contained herein or in the Security Certificates to
the contrary, for so long as the Purchase Contract underlying a Security re-
mains in effect such Security shall not be separable into its constituent
parts, and the rights and obligations of the Holder of such Security in re-
spect of the Treasury Notes and Purchase Contracts constituting such Security
may be acquired, and may be transferred and exchanged, only as a Security.
Other than a Security Certificate evidencing a Security, no Holder of a Secu-
rity, or any transferee thereof, shall be entitled to receive a certificate
evidencing the ownership of Treasury Notes or the rights and obligations of
the Holder and the Company under a Purchase Contract for so long as the Pur-
chase Contract underlying the Security remains in effect.
ARTICLE FOUR
The Treasury Notes
Section 401. Payment of Interest; Interest Rights Preserved.
Interest on any Treasury Note which is paid on any Payment Date shall, sub-
ject to receipt thereof by the Agent from the Collateral Agent as provided by
the terms of the Pledge Agreement, be paid to the Person in whose name the Se-
curity Certificate (or one or more Predecessor Security Certificates) of which
such Treasury Note is a part is registered at the close of business on the
Record Date next preceding such Payment Date.
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Each Security Certificate evidencing Treasury Notes delivered under this
Agreement upon registration of transfer of or in exchange for or in lieu of
any other Security Certificate shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by the Treasury Notes underlying
such other Security Certificate.
In the case of any Security with respect to which Early Settlement of the
underlying Purchase Contract is effected on an Early Settlement Date after any
Record Date and on or prior to the next succeeding Payment Date, interest on
the Treasury Notes underlying such Security otherwise payable on such Payment
Date shall be payable on such Payment Date notwithstanding such Early Settle-
ment, and such interest shall, subject to receipt thereof by the Agent, be
paid to the Person in whose name the Security Certificate (or one or more
Predecessor Security Certificates) is registered at the close of business on
the Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any Security with respect to which Early
Settlement of the underlying Purchase Contract is effected on an Early Settle-
ment Date, interest on the related Treasury Notes that would otherwise be pay-
able after the Early Settlement Date shall not be payable hereunder to the
Holder of such Security.
Section 402. Transfer of Treasury Notes Upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the Agent of
the Treasury Notes underlying such Securities pursuant to the terms of the
Pledge Agreement, the Agent shall request transfer instructions with respect
to such Treasury Notes from each Holder of Securities by written request
mailed to such Holder at his address as it appears in the Security Register,
in respect of the Treasury Notes underlying the Security Certificate held by
such Holder. Upon surrender to the Agent of a Security Certificate with such
transfer instructions in proper form for transfer of the Treasury Notes by
Federal Reserve Bank-Wire or other appropriate procedure, the Agent shall
transfer the Treasury Notes evidenced by such Security Certificate to such
Holder in accordance with such instructions. If a Security Certificate is not
duly surrendered to the Agent with appropriate transfer instructions, the
Agent shall hold the Treasury Notes evidenced by such Security Certificate as
custodian for the Holder of such Security Certificate.
Treasury Notes shall be transferred only in denominations of $1,000 and in-
tegral multiples thereof. As promptly as practicable following the occurrence
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of a Termination Event, the Agent shall determine the excess of (i) the aggre-
gate principal amount of Treasury Notes underlying the Outstanding Securities
over (ii) the aggregate principal amount of Treasury Notes in denominations of
$1,000 and integral multiples thereof transferrable to Holders of record on
the date of such Termination Event (such excess being herein referred to as
the "Excess Treasury Notes"). As soon as practicable after transfer to the
Agent of the Treasury Notes underlying the Outstanding Securities as provided
in the Pledge Agreement, the Agent shall sell the Excess Treasury Notes to or
through one or more U.S. Government securities dealers at then prevailing
prices. The Agent shall deduct from the proceeds of such sales all commissions
and other out-of-pocket transaction costs incurred in connection with such
sales of Excess Treasury Notes and, until the net proceeds of such sale or
sales have been distributed to Holders of the Securities, the Agent shall hold
such proceeds in trust for the Holders of Securities. Each Holder shall be en-
titled to receive a portion, if any, of such net proceeds in lieu of Treasury
Notes with a principal amount of less than $1,000 determined by multiplying
the aggregate amount of such net proceeds by a fraction, the numerator of
which is the fraction of $1,000 in principal amount of Treasury Notes to which
such Holder would otherwise be entitled (after taking into account all Securi-
ties then held by such Holder) and the denominator of which is the aggregate
principal amount of Excess Treasury Notes.
ARTICLE FIVE
The Purchase Contracts
Section 501. Purchase of Shares of Common Stock.
Each Purchase Contract shall obligate the Holder of the related Security to
purchase, and the Company to sell, on the Final Settlement Date at a price
equal to the Stated Amount, a number of shares of Common Stock equal to the
Settlement Rate, unless, on or prior to the Final Settlement Date, there shall
have occurred a Termination Event or an Early Settlement with respect to the
Security of which such Purchase Contract is a part. The "Settlement Rate" is
equal to (a) if the Applicable Market Value (as defined below) is greater than
$42.75 (the "Threshold Appreciation Price"), .8333 of a share of Common Stock
per Purchase Contract, (b) if the Applicable Market Value is less than or
equal to the Threshold Appreciation Price but is greater than the Stated
Amount, a fractional share of Common Stock per Purchase Contract equal to the
Stated Amount divided by the Applicable Market Value (rounded upward or down-
ward to the nearest 1/10,000th of a share) and (c) if the
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Applicable Market Value is less than or equal to the Stated Amount, one share
of Common Stock per Purchase Contract, in each case subject to adjustment as
provided in Section 506. As provided in Section 510, no fractional shares of
Common Stock will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Prices per
share of Common Stock on each of the twenty consecutive Trading Days ending on
the last Trading Day immediately preceding the Final Settlement Date. The
"Closing Price" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the principal United
States securities exchange on which the Common Stock is so listed, or if the
Common Stock is not so listed on a United States national or regional securi-
ties exchange, as reported by The Nasdaq Stock Market, or, if the Common Stock
is not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or simi-
lar organization, or, if such bid price is not available, the market value of
the Common Stock on such date as determined by a nationally recognized inde-
pendent investment banking firm retained for this purpose by the Company. A
"Trading Day" means a day on which the Common Stock (A) is not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities exchange or association or over-
the-counter market that is the primary market for the trading of the Common
Stock.
Each Holder of a Security Certificate evidencing Securities, by his accept-
ance thereof, irrevocably authorizes the Agent to enter into and perform the
related Purchase Contracts on his behalf as his attorney-in-fact, agrees to be
bound by the terms and provisions thereof, covenants and agrees to perform his
obligations under such Purchase Contracts, consents to the provisions hereof,
irrevocably authorizes the Agent as his attorney-in-fact to enter into and
perform the Pledge Agreement on his behalf as his attorney-in-fact, and con-
sents to and agrees to be bound by the Pledge of the Treasury Notes underlying
such Security Certificate pursuant to the Pledge Agreement. Each Holder of a
Security, by his acceptance thereof, further irrevocably covenants and agrees,
that, to the extent and in the manner provided in Section 504 and
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the Pledge Agreement, but subject to the terms thereof, payments in respect of
principal of the Treasury Notes on the Final Settlement Date shall be paid by
the Collateral Agent to the Company in satisfaction of such Holder's obliga-
tions under such Purchase Contract and such Holder shall acquire no right, ti-
tle or interest in such payments.
Upon registration of transfer of a Security Certificate evidencing Purchase
Contracts, the transferee shall be bound (without the necessity of any other
action on the part of such transferee), under the terms of this Agreement, the
Purchase Contracts evidenced thereby and the Pledge Agreement and the trans-
feror shall be released from the obligations under the Purchase Contracts evi-
denced by the Security Certificates so transferred. The Company covenants and
agrees, and each Holder of a Security Certificate, by his acceptance thereof,
likewise covenants and agrees, to be bound by the provisions of this para-
graph.
Section 502. Contract Fees.
Subject to Section 503, the Company shall pay, on each Payment Date, the
Contract Fees payable in respect of each Purchase Contract to the Person in
whose name the Security Certificate (or one or more Predecessor Security Cer-
tificates) evidencing such Purchase Contract is registered at the close of
business on the Record Date next preceding such Payment Date. The Contract Fee
will be payable at the office of the Agent in The City of New York maintained
for that purpose or, at the option of the Company, by check mailed to the ad-
dress of the Person entitled thereto at such address as it appears on the Se-
curity Register.
Each Security Certificate delivered under this Agreement upon registration
of transfer of or in exchange for or in lieu of any other Security Certificate
shall carry the rights to Contract Fees accrued and unpaid, and to accrue,
which were carried by the Purchase Contracts evidenced by such other Security
Certificate.
In the case of any Security with respect to which Early Settlement of the
underlying Purchase Contract is effected on an Early Settlement Date after any
Record Date and on or prior to the next succeeding Payment Date, Contract Fees
otherwise payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Early Settlement, and such Contract Fees shall be paid to
the Person in whose name the Security Certificate evidencing such Security (or
one or more Predecessor Security Certificates) is registered at the close of
business on such Record Date. Except as otherwise expressly
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provided in the immediately preceding sentence, in the case of any Security
with respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date, Contract Fees that would otherwise be
payable after the Early Settlement Date with respect to the Purchase Contract
underlying such Security shall not be payable.
Section 503. Deferral of Payment Dates For Contract Fee.
The Company shall have the right, at any time prior to the Final Settlement
Date, to defer the payment of any or all of the Contract Fees otherwise pay-
able on any Payment Date, but only if the Company shall give the Holders and
the Agent written notice of its election to defer such payment (specifying the
amount to be deferred) at least ten Business Days prior to the earlier of (i)
the next succeeding Payment Date or (ii) the date the Company is required to
give notice of the Record Date or Payment Date with respect to payment of such
Contract Fee to the New York Stock Exchange or other applicable self-regula-
tory organization or to Holders of the Securities, but in any event not less
than two Business Days prior to such Record Date. Any Contract Fees so de-
ferred shall bear additional Contract Fees thereon at the rate of 7.25% per
annum (computed on the basis of the actual number of days elapsed in a year of
365 or 366 days, as the case may be), compounding on each succeeding Payment
Date, until paid in full. Deferred Contract Fees (and additional Contract Fees
accrued thereon) shall be due on the next succeeding Payment Date except to
the extent that payment is deferred pursuant to this Section. No Contract Fees
may be deferred to a date that is after the Final Settlement Date or, with re-
spect to any particular Purchase Contract, Early Settlement thereof.
Section 504. Payment of Purchase Price.
The purchase price for the shares of Common Stock purchased pursuant to a
Purchase Contract shall be paid by application of payments received by the
Company on the Final Settlement Date from the Collateral Agent pursuant to the
Pledge Agreement in respect of the principal of the Treasury Notes Pledged to
secure the obligations of the relevant Holder under such Purchase Contract.
Such application shall satisfy in full the obligations under such Purchase
Contract of the Holder of the Security of which such Purchase Contract is a
part. The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
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Section 505. Issuance of Shares of Common Stock.
Unless a Termination Event shall have occurred on or prior to the Final Set-
tlement Date, on the Final Settlement Date, upon its receipt of payment in
full of the purchase price for the shares of Common Stock purchased by the
Holders pursuant to the foregoing provisions of this Article, and subject to
Section 506(b), the Company shall deposit with the Agent, for the benefit of
the Holders of the Outstanding Securities, one or more certificates represent-
ing the shares of Common Stock registered in the name of the Agent (or its
nominee) as custodian for the Holders (such certificates for shares of Common
Stock, together with any dividends or distributions with respect thereto, be-
ing hereinafter referred to as the "Final Settlement Fund") to which the Hold-
ers are entitled hereunder. Subject to the foregoing, upon surrender of a Se-
curity Certificate to the Agent on or after the Final Settlement Date, to-
gether with settlement instructions thereon duly completed and executed, the
Holder of such Security Certificate shall be entitled to receive in exchange
therefor a certificate representing that number of whole shares of Common
Stock which such Holder is entitled to receive pursuant to the provisions of
this Article Five (after taking into account all Securities then held by such
Holder) together with cash in lieu of fractional shares as provided in Section
510 and any dividends or distributions with respect to such shares constitut-
ing part of the Final Settlement Fund, but without any interest thereon, and
the Security Certificate so surrendered shall forthwith be cancelled. Such
shares shall be registered in the name of the Holder or the Holder's designee
as specified in the settlement instructions on the Security Certificate.
If any shares of Common Stock issued in respect of a Purchase Contract are
to be registered to a Person other than the Person in whose name the Security
Certificate evidencing such Purchase Contract is registered, no such registra-
tion shall be made unless the Person requesting such registration has paid any
transfer and other taxes required by reason of such registration in a name
other than that of the registered Holder of the Security Certificate evidenc-
ing such Purchase Contract or has established to the satisfaction of the Com-
pany that such tax either has been paid or is not payable.
Section 506. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other distribution
on any class of Common Stock of the Company in Common Stock, the
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Settlement Rate in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such div-
idend or other distribution shall be increased by dividing such Settlement
Rate by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or other distribu-
tion, such increase to become effective immediately after the opening of busi-
ness on the day following the date fixed for such determination. For the pur-
poses of this paragraph (1), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock. The Company will not pay any dividend
or make any distribution on shares of Common Stock held in the treasury of the
Company.
(2) In case the Company shall issue rights, options or warrants to all hold-
ers of its Common Stock (not being available on an equivalent basis to Holders
of the Securities upon settlement of the Purchase Contracts underlying such
Securities) entitling them, for a period expiring within 45 days after the
record date for the determination of stockholders entitled to receive such
rights, options or warrants, to subscribe for or purchase shares of Common
Stock at a price per share less than the Current Market Price per share of the
Common Stock on the date fixed for the determination of stockholders entitled
to receive such rights, options or warrants (other than pursuant to a dividend
reinvestment plan), the Settlement Rate in effect at the opening of business
on the day following the date fixed for such determination shall be increased
by dividing such Settlement Rate by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of Common
Stock which the aggregate of the offering price of the total number of shares
of Common Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of Com-
mon Stock outstanding at the close of business on the date fixed for such de-
termination plus the number of shares of Common Stock so offered for subscrip-
tion or purchase, such increase to become effective immediately after the
opening of business on the day following the date fixed for such determina-
tion. For the purposes of this paragraph (2), the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury
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of the Company but shall include shares issuable in respect of scrip certifi-
cates issued in lieu of fractions of shares of Common Stock. The Company shall
not issue any such rights, options or warrants in respect of shares of Common
Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Settlement Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller num-
ber of shares of Common Stock, the Settlement Rate in effect at the opening of
business on the day following the day upon which such combination becomes ef-
fective shall be proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(4) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in paragraph (2)
of this Section, any dividend or distribution paid exclusively in cash and any
dividend or distribution referred to in paragraph (1) of this Section), the
Settlement Rate shall be adjusted so that the same shall equal the rate deter-
mined by dividing the Settlement Rate in effect immediately prior to the close
of business on the date fixed for the determination of stockholders entitled
to receive such distribution by a fraction of which the numerator shall be the
Current Market Price per share of the Common Stock on the date fixed for such
determination less the then fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution filed with the Agent) of the portion of the assets or evidences of
indebtedness so distributed applicable to one share of Common Stock and the
denominator shall all be such Current Market Price per share of the Common
Stock, such adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of stock-
holders entitled to receive such distribution. In any case in which this para-
graph (4) is applicable, paragraph (2) of this Section shall not be applica-
ble.
(5) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock cash (excluding any cash that is distributed in a
Reorganization Event to which Section 506(b) applies or as part of a distribu-
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tion referred to in paragraph (4) of this Section) in an aggregate amount
that, combined together with (I) the aggregate amount of any other distribu-
tions to all holders of its Common Stock made exclusively in cash within the
12 months preceding the date of payment of such distribution and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (II) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration payable in
respect of any tender or exchange offer by the Company or any of its subsidi-
aries for all or any portion of the Common Stock concluded within the 12
months preceding the date of payment of such distribution and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made, exceeds 10% of the product of the Current Market Price
per share of the Common Stock on the date for the determination of holders of
shares of Common Stock entitled to receive such distribution times the number
of shares of Common Stock outstanding on such date, then, and in each such
case, immediately after the close of business on such date for determination,
the Settlement Rate shall be increased so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately prior to the
close of business on the date fixed for determination of the stockholders en-
titled to receive such distribution by a fraction (i) the numerator of which
shall be equal to the Current Market Price per share of the Common Stock on
the date fixed for such determination less an amount equal to the quotient of
(x) the excess of such combined amount over such 10% and (y) the number of
shares of Common Stock outstanding on such date for determination and (ii) the
denominator of which shall be equal to the Current Market Price per share of
the Common Stock on such date for determination.
(6) In case a tender or exchange offer made by the Company or any subsidiary
of the Company for all or any portion of the Common Stock shall expire and
such tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to stockholders (based on the acceptance (up to any maxi-
mum specified in the terms of the tender or exchange offer) of Purchased
Shares) of an aggregate consideration having a fair market value (as deter-
mined by the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) that combined together with (I) the aggregate
of the cash plus the fair market value (as determined by the Board of Direc-
tors, whose determination shall be conclusive and described in a Board Resolu-
tion), as of the expiration of such tender or exchange offer, of
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consideration payable in respect of any other tender or exchange offer, by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made and (II) the aggregate
amount of any distributions to all holders of the Company's Common Stock made
exclusively in cash within 12 months preceding the expiration of such tender
or exchange offer and in respect of which no adjustment pursuant to paragraph
(5) of this Section or this paragraph (6) has been made, exceeds 10% of the
product of the Current Market Price per share of the Common Stock as of the
last time (the "Expiration Time") tenders could have been made pursuant to
such tender or exchange offer (as it may be amended) times the number of
shares of Common Stock outstanding (including any tendered shares) on the Ex-
piration Time, then, and in each such case, immediately prior to the opening
of business on the day after the date of the Expiration Time, the Settlement
Rate shall be adjusted so that the same shall equal the rate determined by di-
viding the Settlement Rate immediately prior to close of business on the date
of the Expiration Time by a fraction (i) the numerator of which shall be equal
to (A) the product of (I) the Current Market Price per share of the Common
Stock on the date of the Expiration Time and (II) the number of shares of Com-
mon Stock outstanding (including any tendered shares) on the Expiration Time
less (B) the amount of cash plus the fair market value (determined as afore-
said) of the aggregate consideration payable to stockholders based on the ac-
ceptance (up to any maximum specified in the terms of the tender or exchange
offer) of Purchased Shares, and (ii) the denominator of which shall be equal
to the product of (A) the Current Market Price per share of the Common Stock
as of the Expiration Time and (B) the number of shares of Common Stock out-
standing (including any tendered shares) as of the Expiration Time less the
number of all shares validly tendered and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being referred to
as the "Purchased Shares").
(7) The reclassification of Common Stock into securities including securi-
ties other than Common Stock (other than any reclassification upon a Reorgani-
zation Event to which Section 506(b) applies) shall be deemed to involve (a) a
distribution of such securities other than Common Stock to all holders of Com-
mon Stock (and the effective date of such reclassification shall be deemed to
be "the date fixed for the determination of stockholders entitled to receive
such distribution" and the "date fixed for such determination" within the
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meaning of paragraph (4) of this Section), and (b) a subdivision or combina-
tion, as the case may be, of the number of shares of Common Stock outstanding
immediately prior to such reclassification into the number of shares of Common
Stock outstanding immediately thereafter (and the effective date of such re-
classification shall be deemed to be "the day upon which such subdivision be-
comes effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (3) of this Section).
(8) The "Current Market Price" per share of Common Stock on any day means
the average of the daily Closing Prices for the 5 consecutive Trading Days se-
lected by the Company commencing not more than 20 Trading Days before, and
ending not later than, the earlier of the day in question and the day before
the "ex" date with respect to the issuance or distribution requiring such com-
putation. For purposes of this paragraph, the term "'ex' date", when used
with respect to any issuance or distribution, shall mean the first date on
which the Common Stock trades regular way on such exchange or in such market
without the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated to the near-
est 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share to the next lower 1/10,000th of a share). No adjustment
in the Settlement Rate shall be required unless such adjustment would require
an increase or decrease of at least one percent therein; provided, however,
that any adjustments which by reason of this subparagraph are not required to
be made shall be carried forward and taken into account in any subsequent ad-
justment. If an adjustment is made to the Settlement Rate pursuant to para-
graph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 506(a), an ad-
justment shall also be made to the Applicable Market Value solely to determine
which of clauses (a), (b) or (c) of the definition of Settlement Rate in Sec-
tion 501 will apply on the Final Settlement Date. Such adjustment shall be
made by multiplying the Applicable Market Value by a fraction of which the nu-
merator shall be the Settlement Rate immediately after such adjustment pursu-
ant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section
506(a) and the denominator shall be the Settlement Rate immediately before
such adjustment.
(10) The Company may make such increases in the Settlement Rate, in addition
to those required by this Section, as it considers to be advisable in order to
avoid or diminish any income tax to any holders of shares of Common
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Stock resulting from any dividend or distribution of stock or issuance of
rights or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event. In
the event of (i) any consolidation or merger of the Company, with or into an-
other Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation), (ii) any sale, trans-
fer, lease or conveyance to another Person of the property of the Company as
an entirety or substantially as an entirety, (iii) any statutory exchange of
securities of the Company with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of
the Company (any such event, a "Reorganization Event"), the Settlement Rate
will be adjusted to provide that each Holder of Securities will receive on the
Final Settlement Date with respect to each Purchase Contract forming a part
thereof, the kind and amount of securities, cash and other property receivable
upon such Reorganization Event by a Holder of the number of shares of Common
Stock issuable on account of each Purchase Contract if the Final Settlement
Date had occurred immediately prior to such Reorganization Event, assuming
such Holder of Common Stock is not a Person with which the Company consoli-
dated or into which the Company merged or which merged into the Company or to
which such sale or transfer was made, as the case may be ("constituent Per-
son"), or an Affiliate of a constituent Person, and failed to exercise his
rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such Reorganization Event (provided that if the
kind or amount of securities, cash and other property receivable upon such Re-
organization Event is not the same for each share of Common Stock held immedi-
ately prior to such Reorganization Event by other than a constituent Person or
an Affiliate thereof and in respect of which such rights of election shall not
have been exercised ("non-electing share"), then for the purpose of this Sec-
tion the kind and amount of securities, cash and other property receivable
upon such Reorganization Event by each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the non-
electing shares). In the event of such a Reorganization Event, the Person
formed by such consolidation, merger or exchange or the Person which acquires
the assets of the Company or, in the event of a liquidation or dissolution of
the Company, the Company or a liquidating trust created
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in connection therewith, shall execute and deliver to the Agent an agreement
supplemental hereto providing that the Holders of each Outstanding Security
shall have the rights provided by this Section 506. Such supplemental agree-
ment shall provide for adjustments which, for events subsequent to the effec-
tive date of such supplemental agreement, shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section. The above pro-
visions of this Section shall similarly apply to successive Reorganization
Events.
Section 507. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the Company
shall:
(i) forthwith compute the adjusted Settlement Rate in accordance with
Section 506 and prepare and transmit to the Agent an Officers' Certificate
setting forth the Settlement Rate, the method of calculation thereof in
reasonable detail, and the facts requiring such adjustment and upon which
such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an event that
permits or requires an adjustment to the Settlement Rate pursuant to Sec-
tion 506 (or if the Company is not aware of such occurrence, as soon as
practicable after becoming so aware), provide a written notice to the
Holders of the Securities of the occurrence of such event and a statement
in reasonable detail setting forth the method by which the adjustment to
the Settlement Rate was determined and setting forth the adjusted Settle-
ment Rate.
(b) The Agent shall not at any time be under any duty or responsibility to
any holder of Securities to determine whether any facts exist which may re-
quire any adjustment of the Settlement Rate, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect to the
method employed in making the same. The Agent shall not be accountable with
respect to the validity or value (or the kind or amount) of any shares of Com-
mon Stock, or of any securities or property, which may at the time be issued
or delivered with respect to any Purchase Contract; and the Agent makes no
representation with respect thereto. The Agent shall not be responsible for
any failure of the Company to issue, transfer or deliver any shares of Common
Stock pursuant to a Purchase Contract or to comply with any of the duties, re-
sponsibilities or covenants of the Company contained in this Article.
Section 508. Termination Event; Notice.
The Purchase Contracts and the obligations and rights of the Company and the
Holders thereunder, including, without limitation, the rights of the
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Holders to receive and the obligation of the Company to pay any Contract Fee,
shall immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Agent or the Company, if, on or prior to
the Final Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall give written notice to
the Agent, the Collateral Agent and to the Holders, at their addresses as they
appear in the Security Register. Upon and after the occurrence of a Termina-
tion Event, the Securities shall thereafter represent the right to receive the
Treasury Notes forming a part of such Securities in accordance with the provi-
sions of Section 402 and the Pledge Agreement.
Section 509. Early Settlement.
(a) Subject to and upon compliance with the provisions of this Section 509
at the option of the Holder thereof, any Purchase Contracts underlying Securi-
ties having an aggregate Stated Amount equal to $57,000 or an integral multi-
ple thereof may be settled early ("Early Settlement") as provided herein. In
order to exercise the right to effect Early Settlement with respect to any
Purchase Contracts, the Holder of the Security Certificate evidencing such
Purchase Contracts shall deliver such Security Certificate to the Agent at the
Corporate Trust Office duly endorsed for transfer to the Company or in blank
with the form of Election to Settle Early on the reverse thereof duly com-
pleted and accompanied by payment in the form of a certified or cashier's
check payable to the order of the Company in immediately available funds in an
amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement minus (ii) the aggregate
amount of Contract Fees, if any, otherwise payable on or prior to the immedi-
ately preceding Payment Date deferred at the option of the Company pursuant to
Section 503 and remaining unpaid as of such immediately preceding Payment Date
plus (iii) if such delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record Date next preceding
any Payment Date to the opening of business on such Payment Date, an amount
equal to the sum of (x) the Contract Fees payable on such Payment Date with
respect to such Purchase Contracts plus (y) the interest on the related Trea-
sury Notes payable on such Payment Date. Except as provided in the immediately
preceding sentence and subject to the last paragraph of Section 502, no pay-
ment or adjustment shall be made upon Early Settlement of any Purchase Con-
tract on account of any Contract Fees accrued
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on such Purchase Contract or on account of any dividends on the Common Stock
issued upon such Early Settlement. If the foregoing requirements are first
satisfied with respect to Purchase Contracts underlying any Securities at or
prior to 5:00 p.m., New York City time, on a Business Day, such day shall be
the "Early Settlement Date" with respect to such Securities and if such re-
quirements are first satisfied after 5:00 p.m., New York City time, on a Busi-
ness Day or on a day that is not a Business Day, the "Early Settlement Date"
with respect to such Securities shall be the next succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Company shall issue, and the Holder shall be entitled to re-
ceive, a number of shares of Common Stock on account of each Purchase Contract
as to which Early Settlement is effected equal to the Early Settlement Rate.
The Early Settlement Rate shall initially be equal to .8333 and shall be ad-
justed in the same manner and at the same time as the Settlement Rate is ad-
justed. As promptly as practicable after Early Settlement of Purchase Con-
tracts in accordance with the provisions of this Section 509, the Company
shall issue and shall deliver to the Agent at the Corporate Trust Office a
certificate or certificates for the full number of shares of Common Stock is-
suable upon such Early Settlement together with payment in lieu of any frac-
tion of a share, as provided in Section 510.
(c) The Company shall cause the shares of Common Stock issuable, and Trea-
sury Notes deliverable, upon Early Settlement of Purchase Contracts to be is-
sued and delivered, in the case of such shares of Common Stock, and released
from the Pledge by the Collateral Agent and transferred, in the case of such
Treasury Notes, to the Agent, for delivery to the Holder thereof or its desig-
nee, no later than the third Business Day after the applicable Early Settle-
ment Date.
(d) Upon Early Settlement of any Purchase Contracts, and subject to receipt
thereof from the Company or the Collateral Agent, as applicable, the Agent
shall, in accordance with the instructions provided by the Holder thereof on
the applicable form of Election to Settle Early on the reverse of the Security
Certificate evidencing the related Securities, (i) transfer the Treasury Notes
forming a part of such Securities and (ii) deliver a certificate or certifi-
cates for the full number of shares of Common Stock issuable upon such Early
Settlement together with payment in lieu of any fraction of a share, as pro-
vided in Section 510.
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(e) In the event that Early Settlement is effected with respect to Purchase
Contracts underlying less than all the Securities evidenced by a Security Cer-
tificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the ex-
pense of the Company, a Security Certificate evidencing the Securities as to
which Early Settlement was not effected.
Section 510. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common Stock
shall be issued or delivered upon settlement on the Final Settlement Date or
upon Early Settlement of any Purchase Contracts. If Security Certificates evi-
dencing more than one Purchase Contract shall be surrendered for settlement at
one time by the same Holder, the number of full shares of Common Stock which
shall be delivered upon settlement shall be computed on the basis of the ag-
gregate number of Purchase Contracts evidenced by the Security Certificates so
surrendered. Instead of any fractional share of Common Stock which would oth-
erwise be deliverable upon settlement of any Purchase Contracts on the Final
Settlement Date or upon Early Settlement, the Company, through the Agent,
shall make a cash payment in respect of such fractional interest in an amount
equal to the value of such fractional shares at the Closing Price per share on
the Trading Day immediately preceding the Final Settlement Date or the related
Early Settlement Date, respectively. The Company shall provide the Agent from
time to time with sufficient funds to permit the Agent to make all cash pay-
ments required by this Section 510 in a timely manner.
Section 511. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable to
the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts; provided, however, that the Company shall not be re-
quired to pay any such tax or taxes which may be payable in respect of any ex-
change of or substitution for a Security Certificate evidencing a Purchase
Contract or any issuance of a share of Common Stock in a name other than that
of the registered Holder of a Security Certificate surrendered in respect of
the Purchase Contracts evidenced thereby, other than in the name of the Agent,
as custodian for such Holder, and the Company shall not be required to issue
or deliver such share certificates or Security Certificates unless or until
the Person or Persons requesting the transfer or issuance thereof shall have
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paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
ARTICLE SIX
Remedies
Section 601. Unconditional Right of Holders to Receive Contract Fee.
Notwithstanding any other provision in this Agreement, the Holder of any Se-
curity shall have the right, which is absolute and unconditional (subject to
the right of the Company to defer payment thereof pursuant to Section 503), to
receive payment of each installment of the Contract Fee with respect to the
Purchase Contract constituting a part of such Security on the respective Pay-
ment Date for such Security and to purchase Common Stock pursuant to such Pur-
chase Contract and, in each such case, to institute suit for the enforcement
of any such payment and right to purchase Common Stock, and such rights shall
not be impaired without the consent of such Holder.
Section 602. Restoration of Rights and Remedies.
If any Holder of Securities has instituted any proceeding to enforce any
right or remedy under this Agreement and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to such Holder,
then and in every such case, subject to any determination in such proceeding,
the Company and such Holder shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of
such Holder shall continue as though no such proceeding had been instituted.
Section 603. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement of mutilated,
destroyed, lost or stolen Security Certificates in the last paragraph of Sec-
tion 306, no right or remedy herein conferred upon or reserved to the Holders
of Securities is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employ-
ment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
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Section 604. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy shall im-
pair any such right or remedy or constitute a waiver of any such right. Every
right and remedy given by this Article or by law to the Holders may be exer-
cised from time to time, and as often as may be deemed expedient, by such
Holders.
Section 605. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of any Security by his
acceptance of the Security Certificate evidencing such Security shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Agreement, or in
any suit against the Agent for any action taken, suffered or omitted by it as
Agent, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess rea-
sonable costs, including reasonable attorneys' fees, against any party liti-
gant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that the provisions
of this Section shall not apply to any suit instituted by the Company, to any
suit instituted by the Agent, to any suit instituted by any Holder of Securi-
ties, or group of Holders, holding in the aggregate more than 10% of the Out-
standing Securities, or to any suit instituted by any Holder for the enforce-
ment of the payment of the interest on any Treasury Note or the Contract Fee
on any Purchase Contract on or after the respective Payment Date therefor con-
stituting a part of the Securities held by such Holder, or for enforcement of
the right to purchase shares of Common Stock under the Purchase Contracts con-
stituting a part of the Securities held by such Holder.
Section 606. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever en-
acted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Agreement; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Agent or the Holders, but will suffer and
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permit the execution of every such power as though no such law had been en-
acted.
ARTICLE SEVEN
The Agent
Section 701. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to the Securities,
such duties and only such duties as are specifically set forth in this
Agreement, and no implied covenants or obligations shall be read into this
Agreement against the Agent; and
(2) in the absence of bad faith or negligence on its part, the Agent
may, with respect to the Securities, conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Agent and conforming to the re-
quirements of this Agreement, but in the case of any certificates or opin-
ions which by any provision hereof are specifically required to be fur-
nished to the Agent, the Agent shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Agreement.
(b) No provision of this Agreement shall be construed to relieve the Agent
from liability for its own negligent action, its own negligent failure to act,
or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of Sub-
section (a) of this Section;
(2) the Agent shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Agent
was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent to expend or
risk its own funds or otherwise incur any financial liability in the per-
formance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liabil-
ity is not reasonably assured to it.
(c) Whether or not therein expressly so provided, every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to the Agent shall be subject to the provisions of this Section.
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Section 702. Notice of Default.
Within 90 days after the occurrence of any default by the Company hereunder,
of which a Responsible Officer of the Agent has actual knowledge, the Agent
shall transmit by mail to all Holders of Securities, as their names and ad-
dresses appear in the Security Register, notice of such default hereunder, un-
less such default shall have been cured or waived.
Section 703. Certain Rights of Agent.
Subject to the provisions of Section 701:
(a) the Agent may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opin-
ion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may
be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other evi-
dence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate of the Company;
(d) the Agent may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instru-
ment, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or docu-
ment, but the Agent, in its discretion, may make reasonable further in-
quiry or investigation into such facts or matters related to the issuance
of the Securities and the execution, delivery and performance of the Pur-
chase Contracts as it may see fit, and, if the Agent shall determine to
make such further inquiry or investigation, it shall be entitled to exam-
ine the books, records and promises of the Company, personally or by agent
or attorney; and
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(f) the Agent may execute any of its powers hereunder or perform any du-
ties hereunder either directly or by or through agents or attorneys and
the Agent shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
Section 704. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Security Certificates shall be
taken as the statements of the Company and the Agent assumes no responsibility
for their correctness. The Agent makes no representations as to the validity
or sufficiency of this Agreement or of the Securities. The Agent shall not be
accountable for the use or application by the Company of the proceeds in re-
spect of the Purchase Contracts.
Section 705. May Hold Securities.
Any Security Registrar or any other agent of the Company, or the Agent, in
its individual or any other capacity, may become the owner or pledgee of Secu-
rities and may otherwise deal with the Company with the same rights it would
have if it were not Security Registrar or such other agent, or the Agent.
Section 706. Money Held in Trust.
Money held by the Agent in trust hereunder need not be segregated from the
other funds except to the extent required by law. The Agent shall be under no
obligation to invest or pay interest on any money received by it hereunder ex-
cept as otherwise agreed with the Company.
Section 707. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time reasonable compensation for
all services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to reimburse the
Agent upon its request for all reasonable expenses, disbursements and ad-
vances incurred or made by the Agent in accordance with any provision of
this Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, dis-
bursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Agent and any predecessor Agent for, and to hold
each of them harmless against, any loss, liability or expense incurred
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without negligence or bad faith on its part, arising out of or in connec-
tion with the acceptance or administration of its duties hereunder, in-
cluding the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
Section 708. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a corporation
organized and doing business under the laws of the United States of America,
any State thereof or the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or State
authority and having its Corporate Trust Office in the Borough of Manhattan,
The City of New York, if there be such a corporation in the Borough of Manhat-
tan, The City of New York qualified and eligible under this Article and will-
ing to act on reasonable terms. If such corporation publishes reports of con-
dition at least annually, pursuant to law or to the requirements of said su-
pervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condi-
tion so published. If at any time the Agent shall cease to be eligible in ac-
cordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
Section 709. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a successor
Agent pursuant to this Article shall become effective until the acceptance of
appointment by the successor Agent in accordance with the applicable require-
ments of Section 710.
(b) The Agent may resign at any time by giving written notice thereof to the
Company 60 days prior to the effective date of such resignation. If the in-
strument of acceptance by a successor Agent required by Section 710 shall not
have been delivered to the Agent within 30 days after the giving of such no-
tice of resignation, the resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a majority
in number of the Outstanding Securities delivered to the Agent and the Compa-
ny.
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(d) If at any time
(1) the Agent fails to comply with Section 310(b) of the TIA, as if the
Agent were an indenture trustee under an indenture qualified under the
TIA, after written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Security for at least six months, or
(2) the Agent shall cease to be eligible under Section 708 and shall
fail to resign after written request therefor by the Company or by any
such Holder, or
(3) the Agent shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Agent or of its property shall
be appointed or any public officer shall take charge or control of the
Agent or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Agent for any cause, the Company, by
a Board Resolution, shall promptly appoint a successor Agent and shall comply
with the applicable requirements of Section 710. If no successor Agent shall
have been so appointed by the Company and accepted appointment in the manner
required by Section 710, any Holder who has been a bona fide Holder of a Secu-
rity for at least six months may, on behalf of himself and all others simi-
larly situated, petition any court of competent jurisdiction for the appoint-
ment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to give, no-
tice of each resignation and each removal of the Agent and each appointment of
a successor Agent by mailing written notice of such event by first-class mail,
postage prepaid, to all Holders of Securities as their names and addresses ap-
pear in the Security Register. Each notice shall include the name of the suc-
cessor Agent and the address of its Corporate Trust Office.
Section 710. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent, every such
successor Agent so appointed shall execute, acknowledge and deliver to the
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Company and to the retiring Agent an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or convey-
ance, shall become vested with all the rights, powers, agencies and duties of
the retiring Agent; but, on the request of the Company or the successor Agent,
such retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to
such successor Agent all property and money held by such retiring Agent here-
under.
(b) Upon request of any such successor Agent, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Agent all such rights, powers and agencies referred to in para-
graph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time of
such acceptance such successor Agent shall be qualified and eligible under
this Article.
Section 711. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any corpo-
ration succeeding to all or substantially all the corporate trust business of
the Agent, shall be the successor of the Agent hereunder, provided such corpo-
ration shall be otherwise qualified and eligible under this Article, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto. In case any Security Certificates shall have been authen-
ticated and executed on behalf of the Holders, but not delivered, by the Agent
then in office, any successor by merger, conversion or consolidation to such
Agent may adopt such authentication and execution and deliver the Security
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Securities.
Section 712. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is reasonably practi-
cable, the names and addresses of Holders received by the Agent in its capac-
ity as Security Registrar.
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(b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Agent, and furnish to the Agent reasonable proof that each such
applicant has owned a Security for a period of at least six months preceding
the date of such application, and such application states that the applicants
desire to communicate with other Holders with respect to their rights under
this Agreement or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to trans-
mit, then the Agent shall, within five Business Days after the receipt of such
application, afford such applicants access to the information preserved at the
time by the Agent in accordance with Section 712(a).
(c) Every Holder of Securities, by receiving and holding the Security Cer-
tificates evidencing the same, agrees with the Company and the Agent that none
of the Company, the Agent nor any agent of any of them shall be held account-
able by reason of the disclosure of any such information as to the names and
addresses of the Holders in accordance with Section 712(b), regardless of the
source from which such information was derived.
Section 713. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the Agent assumes
no obligations and shall not be subject to any liability under this Agreement
or any Purchase Contract in respect of the obligations of the Holder of any
Security thereunder. The Company agrees, and each Holder of a Security Certif-
icate, by his acceptance thereof, shall be deemed to have agreed, that the
Agent's execution of the Security Certificates on behalf of the Holders shall
be solely as agent and attorney-in-fact for the Holders, and that the Agent
shall have no obligation to perform such Purchase Contracts on behalf of the
Holders, except to the extent expressly provided in Article Five hereof.
Section 714. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company, will comply
with all applicable certification, information reporting and withholding (in-
cluding "backup" withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any payments made
with respect to the Securities or (ii) the issuance, delivery, holding, trans-
fer, redemption or exercise of rights under the Securities. Such compliance
shall include, without limitation, the preparation and timely filing of
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required returns and the timely payment of all amounts required to be withheld
to the appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any direction received from the Company with
respect to the application of such requirements to particular payments or
Holders or in other particular circumstances, and may for purposes of this
Agreement rely on any such direction in accordance with the provisions of Sec-
tion 701(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting compliance
with such requirements, and shall make such records available, on written re-
quest, to the Company or to its authorized representative within a reasonable
period of time after receipt of such request.
ARTICLE EIGHT
Supplemental Agreements
Section 801. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any time
and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the fol-
lowing purposes:
(1) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company herein
and in the Security Certificates; or
(2) to add to the covenants of the Company for the benefit of the Hold-
ers, or to surrender any right or power herein conferred upon the Company;
or
(3) to evidence and provide for the acceptance of appointment hereunder
by a successor Agent; or
(4) to make provision with respect to the rights of Holders pursuant to
the requirements of Section 506(b); or
(5) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other provisions herein, or to
make any other provisions with respect to such matters or questions aris-
ing under this Agreement, provided such action shall not adversely affect
the interests of the Holders.
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Section 802. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than 66 2/3% of the Outstanding
Securities, by Act of said Holders delivered to the Company and the Agent, the
Company when authorized by a Board Resolution, and the Agent may enter into an
agreement or agreements supplemental hereto for the purpose of modifying in
any manner the terms of the Securities, or the provisions of this Agreement or
the rights of the Holders in respect of the Securities; provided, however,
that no such supplemental agreement shall, without the consent of the Holder
of each Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or type of Treasury Notes underlying a Security,
impair the right of the Holder of any Security to receive interest pay-
ments on the underlying Treasury Notes or otherwise adversely affect the
Holder's rights in or to such Treasury Notes;
(3) reduce any Contract Fee or change any place where, or the coin or
currency in which, any Contract Fee is payable;
(4) impair the right to institute suit for the enforcement of any Pur-
chase Contract;
(5) reduce the number of shares of Common Stock to be purchased pursuant
to any Purchase Contract, increase the price to purchase shares of Common
Stock upon settlement of any Purchase Contract, change the Final Settle-
ment Date or otherwise adversely affect the Holder's rights under any Pur-
chase Contract; or
(6) reduce the percentage of the Outstanding Securities the consent of
whose Holders is required for any such supplemental agreement.
It shall not be necessary for any Act of Holders under this Section to ap-
prove the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 803. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any supple-
mental agreement permitted by this Article or the modifications thereby of the
agencies created by this Agreement, the Agent shall be entitled to receive and
(subject to Section 701) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental agreement is autho-
rized or permitted by this Agreement. The Agent may, but shall not be obli-
gated to, enter into any such supplemental agreement which affects the Agent's
own rights, duties or immunities under this Agreement or otherwise.
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Section 804. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article, this
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every
Holder of Security Certificates theretofore or thereafter authenticated, exe-
cuted on behalf of the Holders and delivered hereunder shall be bound thereby.
Section 805. Reference to Supplemental Agreements.
Security Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form ap-
proved by the Agent as to any matter provided for in such supplemental agree-
ment. If the Company shall so determine, new Security Certificates so modified
as to conform, in the opinion of the Agent and the Company, to any such sup-
plemental agreement may be prepared and executed by the Company and authenti-
cated, executed on behalf of the Holders and delivered by the Agent in ex-
change for Outstanding Security Certificates.
ARTICLE NINE
Consolidation, Merger, Sale or Conveyance
Section 901. Covenant Not to Merge, Consolidate, Sell or Convey Property Ex-
cept Under Certain Conditions.
The Company covenants that it will not merge or consolidate with any other
Person or sell or convey all or substantially all of its assets to any Person,
except that the Company may merge or consolidate with, or sell or convey all
or substantially all of its assets to, any other Person, provided that (i) the
Company shall be the continuing corporation, or the successor (if other than
the Company) shall be a corporation organized and existing under the laws of
the United States of America or a State thereof and such corporation shall as-
sume the obligations of the Company under the Purchase Contracts, this Agree-
ment and the Pledge Agreement by one or more supplemental agreements in form
satisfactory to the Agent and the Collateral Agent, executed and delivered to
the Agent and the Collateral Agent by such corporation, and (ii) the Company
or such successor corporation, as the case may be, shall not,
49
<PAGE>
immediately after such merger or consolidation, or such sale or conveyance, be
in default in the performance of any covenant or condition hereunder, under
any of the Securities or under the Pledge Agreement.
Section 902. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale or conveyance and upon any
such assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company with the same effect as if it
had been named herein as the Company. Such successor corporation thereupon may
cause to be signed, and may issue either in its own name or in the name of
Browning-Ferris Industries, Inc., any or all of the Security Certificates evi-
dencing Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Agent; and, upon the order of such
successor corporation, instead of the Company, and subject to all the terms,
conditions and limitations in this Agreement prescribed, the Agent shall au-
thenticate and execute on behalf of the Holders and deliver any Security Cer-
tificates which previously shall have been signed and delivered by the offi-
cers of the Company to the Agent for authentication and execution, and any Se-
curity Certificate evidencing Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Agent for that pur-
pose. All the Security Certificates so issued shall in all respects have the
same legal rank and benefit under this Agreement as the Security Certificates
theretofore or thereafter issued in accordance with the terms of this Agree-
ment as though all of such Security Certificates had been issued at the date
of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such change in
phraseology and form (but not in substance) may be made in the Security Cer-
tificates evidencing Securities thereafter to be issued as may be appropriate.
Section 903. Opinion of Counsel to Agent.
The Agent, subject to Sections 701 and 703, may receive an Opinion of Coun-
sel as conclusive evidence that any such consolidation, merger, sale or con-
veyance, and any such assumption, complies with the provisions of this Arti-
cle.
50
<PAGE>
ARTICLE TEN
Covenants
Section 1001. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from time to
time of the Securities that it will duly and punctually perform its obliga-
tions under the Purchase Contracts in accordance with the terms of the Pur-
chase Contracts and this Agreement.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New York
an office or agency where Security Certificates may be presented or surren-
dered for acquisition of shares of Common Stock upon settlement or Early Set-
tlement and for transfer of Treasury Notes upon occurrence of a Termination
Event, where Security Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Agreement may be served. The Company will
give prompt written notice to the Agent of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Agent
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office, and the Company hereby
appoints the Agent as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where Security Certificates may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The Com-
pany hereby designates as the place of payment for the Securities the Corpo-
rate Trust Office and appoints the Agent at its Corporate Trust Office as pay-
ing agent in such city.
51
<PAGE>
Section 1003. Company to Reserve Common Stock.
The Company shall at all times prior to the Final Settlement Date reserve
and keep available, free from preemptive rights, out of its authorized but
unissued Common Stock the full number of shares of Common Stock issuable
against tender of payment in respect of all Purchase Contracts constituting a
part of the Securities evidenced by Outstanding Security Certificates.
Section 1004. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be issued
against tender of payment in respect of any Purchase Contract constituting a
part of the Outstanding Securities will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable.
Section 1005. Statements of Officers of the Company as to Default.
The Company will deliver to the Agent, within 120 days after the end of each
fiscal year of the Company ending after the date hereof, an Officers' Certifi-
cate, stating whether or not to the best knowledge of the signers thereof the
Company is in default in the performance and observance of any of the terms,
provisions and conditions hereof, and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which they
may have knowledge.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
BROWNING-FERRIS INDUSTRIES, INC.
Attested by
/s/ Eileen B. Schuler By: /s/ Henry L. Hirvela
- ----------------------- ---------------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO, as Agent
Attested by
/s/ R. D. Manella By: /s/ John R. Prendiville
- ----------------------- ---------------------------------------------------
52
<PAGE>
EXHIBIT A
BROWNING-FERRIS INDUSTRIES, INC.
7.25% AUTOMATIC COMMON EXCHANGE SECURITIES
(STATED AMOUNT $35.625 PER SECURITY)
No. Securities
This Security Certificate certifies that is the reg-
istered Holder of the number of Securities set forth above. Each Security rep-
resents ownership by the Holder of 5.125% United States Treasury Notes due
June 30, 1998 ("Treasury Notes") with a principal amount equal to the Stated
Amount, subject to the Pledge of such Treasury Notes by such Holder pursuant
to the Pledge Agreement, and the rights and obligations of the Holder under
one Purchase Contract with Browning-Ferris Industries, Inc., a Delaware corpo-
ration (the "Company").
Pursuant to the Pledge Agreement, the Treasury Notes constituting part of
each Security evidenced hereby have been pledged to the Collateral Agent to
secure the obligations of the Holder under the Purchase Contract constituting
part of such Security.
The Pledge Agreement provides that all payments of principal of, or interest
on, any Treasury Notes constituting part of the Securities received by the
Collateral Agent shall be paid by the Collateral Agent by wire transfer in
same day funds no later than 2:00 p.m., New York City time, on the Business
Day such payment is received by the Collateral Agent (provided that in the
event such payment is received by the Collateral Agent on a day that is not a
Business Day or after 2:00 p.m., New York City time, on a Business Day, then
such payment shall be made no later than 9:00 a.m., New York City time, on the
next succeeding Business Day) (i) in the case of (A) interest payments and (B)
any principal payments with respect to any Treasury Notes that have been re-
leased from the Pledge pursuant to the Pledge Agreement, to the Agent to the
account designated by it for such purpose and (ii) in the case of principal
payments on any Pledged Treasury Notes (as defined in the Pledge Agreement),
to the Company, in full satisfaction of the respective obligations of the
Holders of the Securities of which such Pledged Treasury Securities are a part
under the Purchase Contracts forming a part of such Securities. Interest on
<PAGE>
any Treasury Note forming part of a Security evidenced hereby which is paid on
any June 30 or December 31, commencing December 31, 1995 (a "Payment Date"),
shall, subject to receipt thereof by the Agent from the Collateral Agent, be
paid to the Person in whose name this Security Certificate (or a Predecessor
Security Certificate) is registered at the close of business on the Record Date
next preceding such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this Security
Certificate to purchase, and the Company to sell, on June 30, 1998 (the "Final
Settlement Date"), at a price equal to $35.625 (the "Stated Amount"), a number
of shares of Common Stock, par value $.16 2/3 per share ("Common Stock"), of
the Company, equal to the Settlement Rate, unless on or prior to the Final Set-
tlement Date there shall have occurred a Termination Event or Early Settlement
with respect to the Security of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully described on the re-
verse hereof. The purchase price for the shares of Common Stock purchased pur-
suant to each Purchase Contract evidenced hereby, if not paid earlier, shall be
paid on the Final Settlement Date by application of payment received in respect
of the principal of the Treasury Notes pledged to secure the obligations under
such Purchase Contract of the Holder of the Security of which such Purchase
Contract is a part.
The Company shall pay, on each Payment Date, in respect of each Purchase Con-
tract forming part of a Security evidenced hereby a fee (the "Contract Fee")
equal to 2.125% per annum of the Stated Amount, from July 5, 1995, computed on
the basis of the actual number of days elapsed in a year of 365 or 366 days, as
the case may be, subject to deferral at the option of the Company as provided
in the Purchase Contract Agreement and more fully described on the reverse
hereof; except that on the initial Payment Date the Contract Fee shall be re-
duced by an amount equal to accrued interest to July 5, 1995, on the Treasury
Note constituting a part of this Security. Such Contract Fee shall be payable
to the Person in whose name this Security Certificate (or a Predecessor Secu-
rity Certificate) is registered at the close of business on the Record Date
next preceding such Payment Date.
Interest on the Treasury Notes and the Contract Fee will be payable at the
office of the Agent in The City of New York or, at the option of the Company,
by check mailed to the address of the Person entitled thereto as such address
appears on the Security Register.
2
<PAGE>
Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect
as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Security Certificate shall not be entitled to
any benefit under the Pledge Agreement or the Purchase Contract Agreement or
be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly exe-
cuted.
BROWNING-FERRIS INDUSTRIES, INC.
By:
-------------------------------------------------
Attest:
---------------------
HOLDER SPECIFIED ABOVE (as to obligations of such
Holder under the Purchase Contracts evidenced
hereby)
By: THE FIRST NATIONAL BANK OF CHICAGO
as Attorney-in-Fact of such Holder
By:
-------------------------------------------------
Dated:
This is one of the Security Certificates referred to in the within mentioned
Purchase Contract Agreement.
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:
-----------------------
3
<PAGE>
[Form of Reverse of Security Certificate]
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of June 28, 1995 (the "Purchase Contract Agreement"), be-
tween the Company and The First National Bank of Chicago, as Agent (herein
called the "Agent"), to which Purchase Contract Agreement and supplemental
agreements thereto reference is hereby made for a description of the respec-
tive rights, limitations of rights, obligations, duties and immunities there-
under of the Agent, the Company, and the Holders and of the terms upon which
the Security Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this Secu-
rity Certificate to purchase, and the Company to sell, on the Final Settlement
Date at a price equal to the Stated Amount, a number of shares of Common Stock
of the Company equal to the Settlement Rate, unless, on or prior to the Final
Settlement Date, there shall have occurred a Termination Event or an Early
Settlement with respect to the Security of which such Purchase Contract is a
part. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as
defined below) is greater than $42.75 (the "Threshold Appreciation Price"),
.8333 of a share of Common Stock per Purchase Contract, (b) if the Applicable
Market Value is less than or equal to the Threshold Appreciation Price but is
greater than the Stated Amount, a fractional share of Common Stock per Pur-
chase Contract equal to the Stated Amount divided by the Applicable Market
Value and (c) if the Applicable Market Amount is less than or equal to the
Stated Amount, one share of Common Stock per Purchase Contract, in each case
subject to adjustment as provided in the Purchase Contract. No fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts,
as provided in the Purchase Contract Agreement.
The "Applicable Market Value" means the average of the Closing Prices per
share of Common Stock on each of the twenty consecutive Trading Days ending on
the last Trading Day immediately preceding the Final Settlement Date. The
"Closing Price" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the principal United
States securities exchange on which the Common Stock is so listed, or if the
Common Stock is not so listed on a United States national or
4
<PAGE>
regional securities exchange, as reported by The Nasdaq Stock Market, or, if
the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation Bu-
reau or similar organization, or, if such bid price is not available, the mar-
ket value of the Common Stock on such date as determined by a nationally rec-
ognized independent investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common Stock (A) is not sus-
pended from trading on any national or regional securities exchange or associ-
ation or over-the-counter market at the close of business and (B) has traded
at least once on the national or regional securities exchange or association
or over-the-counter market that is the primary market for the trading of the
Common Stock.
The purchase price for the shares of Common Stock purchased pursuant to each
Purchase Contract shall be paid by application of payments received by the
Company on the Final Settlement Date from the Collateral Agent pursuant to the
Pledge Agreement in respect of the principal of the Treasury Notes Pledged to
secure the obligations of the relevant Holder under such Purchase Contract.
The Company shall not be obligated to issue any shares of Common Stock in re-
spect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Subject to the next succeeding paragraph, the Company shall pay, on each
Payment Date, the Contract Fee payable in respect of each Purchase Contract to
the Person in whose name the Security Certificate evidencing such Purchase
Contract is registered at the close of business on the Record Date next pre-
ceding such Payment Date. Contract Fees will be payable at the office of the
Agent in The City of New York or, at the option of the Company, by check
mailed to the address of the Person entitled thereto at such address as it ap-
pears on the Security Register.
The Company shall have the right, at any time prior to the Final Settlement
Date, to defer the payment of any or all of the Contract Fees otherwise pay-
able on any Payment Date, but only if the Company shall give the Holders and
the Agent written notice of its election to defer such payment (specifying the
amount to be deferred) as provided in the Purchase Contract Agreement. Any
Contract Fees so deferred shall bear additional Contract Fees thereon at the
rate of 7.25% per annum (computed on the basis of the actual number of
5
<PAGE>
days elapsed in a year of 365 or 366 days, as the case may be), compounding on
each succeeding Payment Date, until paid in full. Deferred Contract Fees (and
additional Contract Fees accrued thereon) shall be due on the next succeeding
Payment Date except to the extent that payment is deferred pursuant to the
Purchase Contract Agreement. No Contract Fees may be deferred to a date that
is after the Final Settlement Date.
The Purchase Contracts and the obligations and rights of the Company and the
Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Contract Fee, shall
immediately and automatically terminate, without the necessity of any notice
or action by any Holder, the Agent or the Company, if, on or prior to the Fi-
nal Settlement Date, a Termination Event shall have occurred. Upon the occur-
rence of a Termination Event, the Company shall give written notice to the
Agent and to the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Notes from the Pledge. The Securities shall
thereafter represent the right to receive the Treasury Notes forming a part of
such Securities in accordance with the provisions of the Purchase Contract
Agreement and the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase Contract
Agreement at the option of the Holder thereof, Purchase Contracts underlying
Securities having an aggregate Stated Amount equal to $57,000 or an integral
multiple thereof may be settled early ("Early Settlement") as provided in the
Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Security
Certificate, the Holder of this Security Certificate shall deliver this Secu-
rity Certificate to the Agent at the Corporate Trust Office duly endorsed for
transfer to the Company or in blank with the form of Election to Settle Early
set forth below duly completed and accompanied by payment in the form of a
certified or cashier's check payable to the order of the Company in immedi-
ately available funds in an amount (the "Early Settlement Amount") equal to
(i) the product of (A) the Stated Amount times (B) the number of Purchase Con-
tracts with respect to which the Holder has elected to effect Early Settlement
minus (ii) the aggregate amount of Contract Fees, if any, otherwise payable on
or prior to the immediately preceding Payment Date deferred at the option of
the Company pursuant to the Purchase Contract Agreement and remaining unpaid
as of such immediately preceding Payment
6
<PAGE>
Date plus (iii) if such delivery is made with respect to any Purchase Con-
tracts during the period from the close of business on any Record Date next
preceding any Payment Date to the opening of business on such Payment Date, an
amount equal to the sum of (x) the Contract Fees payable on such Payment Date
with respect to such Purchase Contracts plus (y) the interest with respect to
the related Treasury Notes payable on such Payment Date. Upon Early Settlement
of Purchase Contracts by a Holder of the related Securities, the Treasury
Notes underlying such Securities shall be released from the Pledge as provided
in the Pledge Agreement and the Holder shall be entitled to receive, a number
of shares of Common Stock on account of each Purchase Contract forming part of
a Security as to which Early Settlement is effected equal to the Early Settle-
ment Rate. The Early Settlement Rate shall initially be equal to .8333 and
shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in the Purchase Contract Agreement.
The Security Certificates are issuable only in registered form and only in
denominations of a single Security and any integral multiple thereof. The
transfer of any Security Certificate will be registered and Security Certifi-
cates may be exchanged as provided in the Purchase Contract Agreement. The Se-
curity Registrar may require a Holder, among other things, to furnish appro-
priate endorsements and transfer documents permitted by the Purchase Contract
Agreement. No service charge shall be required for any such registration of
transfer or exchange, but the Company and the Agent may require payment of a
sum sufficient to cover any tax or other governmental charge payable in con-
nection therewith. For so long as the Purchase Contract underlying a Security
remains in effect, such Security shall not be separable into its constituent
parts, and the rights and obligations of the Holder of such Security in re-
spect of the Treasury Notes and Purchase Contract constituting such Security
may be transferred and exchanged only as a Security.
Upon registration of transfer of this Security Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee, except as may be required by the Agent pursuant to the Purchase
Contract Agreement), under the terms of the Purchase Contract Agreement and
the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Security
Certificate. The Company covenants and agrees, and the Holder, by his accept-
ance hereof, likewise covenants and agrees, to be bound by the provisions of
this paragraph.
7
<PAGE>
The Holder of this Security Certificate, by his acceptance hereof, autho-
rizes the Agent to enter into and perform the related Purchase Contracts form-
ing part of the Securities evidenced hereby on his behalf as his attorney-in-
fact, agrees to be bound by the terms and provisions thereof, covenants and
agrees to perform his obligations under such Purchase Contracts, consents to
the provisions of the Purchase Contract Agreement, authorizes the Agent to en-
ter into and perform the Pledge Agreement on his behalf as his attorney-in-
fact, and consents to the Pledge of the Treasury Notes underlying this Secu-
rity Certificate pursuant to the Pledge Agreement. The Holder further cove-
nants and agrees, that, to the extent and in the manner provided in the Pur-
chase Contract Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect of principal of the Treasury Notes on the Final
Settlement Date shall be paid by the Collateral Agent to the Company in satis-
faction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of at least 66 2/3%
of the Outstanding Securities.
All terms used herein which are defined in the Purchase Contract Agreement
have the meanings set forth therein.
The Purchase Contracts shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
The Company, the Agent and any agent of the Company or the Agent may treat
the Person in whose name this Security Certificate is registered as the owner
of the Securities evidenced hereby for the purpose of receiving payments of
interest on the Treasury Notes, receiving payments of Contract Fees, perfor-
mance of the Purchase Contracts and for all other purposes whatsoever, whether
or not any payments in respect thereof be overdue and notwithstanding any no-
tice to the contrary, and neither the Company, the Agent nor any such agent
shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof, entitle
the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at the
offices of the Agent.
8
<PAGE>
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon settlement on or after the Final Settlement Date of the Pur-
chase Contracts underlying the number of Securities evidenced by this Security
Certificate be registered in the name of, and delivered, together with a check
in payment for any fractional share, to the undersigned at the address indi-
cated below unless a different name and address have been indicated below. If
shares are to be registered in the name of a Person other than the under-
signed, the undersigned will pay any transfer tax payable incident thereto.
Dated:
-------------------------- ------------------------------------------
Signature
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please print such Person's name
and address:
Please print name and address of Regis-
tered Holder:
------------------------------------------
- -------------------------------- Name
Name
------------------------------------------
- -------------------------------- Address
Address
------------------------------------------
- --------------------------------
Social Security or other Tax- ------------------------------------------
payer Identification Number, if
any
9
<PAGE>
ELECTION TO SETTLE EARLY
The undersigned Holder of this Security Certificate hereby irrevocably exer-
cises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts under-
lying the number of Securities evidenced by this Security Certificate speci-
fied below. The option to effect Early Settlement may be exercised only with
respect to Purchase Contracts underlying Securities with an aggregate Stated
Amount equal to $57,000 or an integral multiple thereof. The undersigned
Holder directs that a certificate for shares of Common Stock deliverable upon
such Early Settlement be registered in the name of, and delivered, together
with a check in payment for any fractional share and any Security Certificate
representing any Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is not effected, to the undersigned at the ad-
dress indicated below unless a different name and address have been indicated
below. Treasury Notes deliverable upon such Early Settlement will be trans-
ferred in accordance with the transfer instructions set forth below. If shares
are to be registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer tax payable incident thereto.
Dated:
------------------------- ------------------------------------------
Signature
10
<PAGE>
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected: .
If shares or Security Certifi- REGISTERED HOLDER
cates are to be registered in
the name of and delivered to
and Treasury Notes are to be
transferred to a Person other
than the Holder, please print
such Person's name and address:
Please print name and address of Regis-
tered Holder:
------------------------------------------
Name
- -------------------------------- ------------------------------------------
Name Address
- -------------------------------- ------------------------------------------
Address
- --------------------------------
Social Security or other Tax-
payer Identification Number, if
any
------------------
Transfer Instructions for Treasury Notes Transferable Upon Early Settlement or
a Termination Event:
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
11
<PAGE>
EXHIBIT 4(j)
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of June 28, 1995 (this "Agreement"), among
Browning-Ferris Industries, Inc., a Delaware corporation (the "Company"), Texas
Commerce Bank National Association, as collateral agent (in such capacity,
together with its successors in such capacity, the "Collateral Agent"), and The
First National Bank of Chicago, as purchase contract agent and as attorney-in-
fact of the Holders (as hereinafter defined) from time to time of the
Securities (as hereinafter defined) (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under the Purchase
Contract Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant
to which there will be issued 7.25% Automatic Common Exchange Securities (the
"Securities").
Each Security consists of (a) one Purchase Contract (as hereinafter defined)
and (b) 5.125% United States Treasury Notes due June 30, 1998 ("Treasury
Notes") having a principal amount equal to $35.625 (the "Stated Amount") and
maturing on June 30, 1998 (the "Final Settlement Date"), subject to the pledge
of such Treasury Notes created hereby.
Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders (as defined in the Purchase Contract Agreement) from
time to time of the Securities have irrevocably authorized the Purchase
Contract Agent, as attorney-in-fact of such Holders, among other things to
execute and deliver this Agreement on behalf of such Holders and to grant the
pledge provided hereby of the Treasury Notes constituting part of such
Securities as provided herein and subject to the terms hereof.
Accordingly, the Company, the Collateral Agent and the Purchase Contract
Agent, on its own behalf and as attorney-in-fact of the Holders from time to
time of the Securities, agree as follows:
Section 1. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular; and
(2) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in the Purchase Contract Agreement.
"Agreement" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Applicable Treasury Regulations" means Subpart O-Book-Entry Procedure of
Title 31 of the Code of Federal Regulations (31 CFR (S) 306.115 et. seq.) and
any other regulations of the United States Treasury Department from time to
time applicable to the transfer or pledge of book-entry U.S. Treasury
Securities.
"Board Resolution" has the meaning specified in the Purchase Contract
Agreement.
"Business Day" means any day that is not a Saturday, a Sunday or a day on
which the New York Stock Exchange or banking institutions or trust companies in
The City of New York are authorized or obligated by law or executive order to
be closed.
<PAGE>
"Collateral Agent" has the meaning specified in the first paragraph of this
instrument.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such, and thereafter
"Company" shall mean such successor.
"Early Settlement" has the meaning specified in the Purchase Contract
Agreement.
"Early Settlement Amount" has the meaning specified in the Purchase Contract
Agreement.
"Final Settlement Date" has the meaning specified in the Recitals.
"Holder" when used with respect to a Security, or a Purchase Contract
constituting a part thereof, has the meaning specified in the Purchase Contract
Agreement.
"Opinion of Counsel" has the meaning specified in the Purchase Contract
Agreement.
"Outstanding Securities" has the meaning specified in the Purchase Contract
Agreement.
"Outstanding Security Certificates" has the meaning specified in the Purchase
Contract Agreement.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Pledge" has the meaning specified in Section 2 hereof.
"Pledged Treasury Notes" has the meaning specified in Section 2 hereof.
"Purchase Contract" has the meaning specified in the Purchase Contract
Agreement.
"Purchase Contract Agent" has the meaning specified in the first paragraph of
this instrument.
"Security" has the meaning specified in the Recitals.
"Security Certificate" has the meaning specified in the Purchase Contract
Agreement.
"Stated Amount" has the meaning specified in the Recitals.
"Termination Event" has the meaning specified in the Purchase Contract
Agreement.
"Treasury Notes" has the meaning specified in the Recitals.
Section 2. The Pledge. The Holders from time to time of the Securities acting
through the Purchase Contract Agent, as their attorney-in-fact, hereby pledge
and grant to the Collateral Agent, as collateral security for the performance
when due by such Holders of their respective obligations under the Purchase
Contracts constituting part of such Securities, for the benefit of the Company,
a security interest in all of the right, title and interest of such Holders in
the Treasury Notes constituting a part of such Securities. Prior to or
concurrently with the execution and delivery of this Agreement, the initial
Holders and the Collateral Agent shall (i) cause the Treasury Notes to be
delivered to the Collateral Agent by Federal Reserve Bank-Wire to the account
of the Collateral Agent designated by it for such purpose and (ii) take
appropriate action so that the applicable Federal Reserve Bank through which
such Treasury Notes have been purchased will reflect such transfer and the
Pledge by appropriate entries in its records in accordance with Applicable
Treasury Regulations. In addition, the execution and delivery hereof by the
Purchase Contract Agent and the Collateral Agent shall constitute (i) the
notification to the Collateral Agent (as bailee or otherwise) of the Pledge and
(ii) an acknowledgment by the Collateral Agent (as third party in possession or
otherwise) of the
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Pledge and of its holding of such Treasury Notes subject to the Pledge, in each
case, for purposes of perfecting the Pledge under Applicable Treasury
Regulations and other applicable law, including, to the extent applicable, the
Uniform Commercial Code as adopted and in effect in any applicable
jurisdiction. The pledge provided in this Section 2 is herein referred to as
the "Pledge" and the Treasury Notes subject to the Pledge, excluding any
Treasury Notes released from the Pledge as provided in Section 4 hereof, are
hereinafter referred to as the "Pledged Treasury Notes." Subject to the Pledge,
the Holders from time to time of the Securities shall have full beneficial
ownership of the Treasury Notes constituting a part of such Securities.
Section 3. Distribution of Principal and Interest. (a) All payments of
principal of, or interest on, any Treasury Notes constituting part of the
Securities received by the Collateral Agent shall be paid by the Collateral
Agent by wire transfer in same day funds no later than 2:00 p.m., New York City
time on the Business Day such interest payment is received by the Collateral
Agent (provided that in the event such interest payment is received by the
Collateral Agent on a day that is not a Business Day or after 2:00 p.m., New
York City time, on a Business Day, then such payment shall be made no later
than 9:00 a.m., New York City time, on the next succeeding Business Day) (i) in
the case of (A) interest payments and (B) any principal payments with respect
to any Treasury Notes that have been released from the Pledge pursuant to
Section 4 hereof, to the Purchase Contract Agent to the account designated by
it for such purpose and (ii) in the case of principal payments on any Pledged
Treasury Notes, to the Company, in full satisfaction of the respective
obligations of the Holders of the Securities of which such Pledged Treasury
Notes are a part under the Purchase Contracts forming a part of such
Securities. All such payments received by the Purchase Contract Agent as
provided herein shall be applied by the Purchase Contract Agent pursuant to the
provisions of the Purchase Contract Agreement. If, notwithstanding the
foregoing, the Purchase Contract Agent shall receive any payments of principal
on account of any Pledged Treasury Notes, the Purchase Contract Agent shall
hold the same as trustee of an express trust for the benefit of the Company
(and promptly deliver over to the Company) for application to the obligations
of the Holders of the Securities of which such Treasury Notes are a part under
the Purchase Contracts relating to the Securities of which such Treasury Notes
are a part, and such Holders shall acquire no right, title or interest in any
such payments of principal so received.
Section 4. Release of Pledged Treasury Notes. (a) Upon notice to the
Collateral Agent by the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Pledged
Treasury Notes from the Pledge and shall transfer all such Treasury Notes, free
and clear of any lien, pledge or security interest created hereby, to the
Purchase Contract Agent.
(b) Upon notice to the Collateral Agent by the Purchase Contract Agent that
one or more Holders of Securities have elected to effect Early Settlement of
their respective obligations under the Purchase Contracts forming a part of
such Securities in accordance with the terms of the Purchase Contracts and the
Purchase Contract Agreement, and that the Purchase Contract Agent has received
from such Holders, and paid to the Company, the related Early Settlement
Amounts pursuant to the terms of the Purchase Contracts and the Purchase
Contract Agreement and that all conditions to such Early Settlement have been
satisfied, then the Collateral Agent shall release from the Pledge Pledged
Treasury Notes with a principal amount equal to the product of (i) the Stated
Amount times (ii) the number of such Purchase Contracts as to which such
Holders have elected to effect Early Settlement.
(c) Transfers of Treasury Notes pursuant to Section 4(a) or (b) shall be by
Federal Reserve Bank-Wire or in another appropriate manner, (i) if the
Collateral Agent shall have received such notification at or prior to 1:00
p.m., New York City time, on a Business Day, then no later than 2:00 p.m., New
York City time, on such Business Day and (ii) if the Collateral Agent shall
have received such notification on a day that is not a Business Day or after
1:00 p.m., New York City time, on a Business Day, then no later than 9:00 a.m.,
New York City time, on the next succeeding Business Day.
Section 5. Rights and Remedies. (a) The Collateral Agent shall have all of
the rights and remedies with respect to the Pledged Treasury Notes of a secured
party under the Uniform Commercial Code as in effect in the State of New York
(the "Code") (whether or not said Code is in effect in the jurisdiction where
the rights
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and remedies are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where
any rights and remedies hereunder may be asserted.
(b) Without limiting any rights or powers otherwise granted by this Agreement
to the Collateral Agent, in the event the Collateral Agent is unable to make
payments to the Company on account of principal payments of any Pledged
Treasury Notes as provided in Section 3 hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Notes are a part under the Purchase Contracts forming a part of such
Securities, the Collateral Agent shall have and may exercise, with reference to
such Pledged Treasury Notes and such obligations of such Holder, any and all of
the rights and remedies available to a secured party under the Code after
default by a debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this Agreement
to the Collateral Agent, the Collateral Agent is hereby irrevocably authorized
to receive and collect all payments of principal of or interest on the Pledged
Treasury Notes.
(d) The Purchase Contract Agent agrees that, from time to time, upon the
written request of the Collateral Agent, the Purchase Contract Agent shall
execute and deliver such further documents and do such other acts and things as
the Collateral Agent may reasonably request in order to maintain the Pledge,
and the perfection and priority thereof, and to confirm the rights of the
Collateral Agent hereunder.
Section 6. The Collateral Agent. The Collateral Agent and the Company hereby
agree between themselves as follows (it being understood and agreed that
neither the Purchase Contract Agent nor any Holder of Securities shall have any
rights under this Section 6):
6.01. Appointment, Powers and Immunities. The Collateral Agent shall act
as agent for the Company hereunder with such powers as are specifically
vested in the Collateral Agent by the terms of this Agreement, together
with such other powers as are reasonably incidental thereto. The Collateral
Agent: (a) shall have no duties or responsibilities except those expressly
set forth in this Agreement and no implied covenants or obligations shall
be inferred from this Agreement against the Collateral Agent, nor shall the
Collateral Agent be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof; (b) shall not be responsible to
the Company for any recitals contained in this Agreement, or in any
certificate or other document referred to or provided for in, or received
by it under, this Agreement, the Securities or the Purchase Contract
Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement (other than as against the
Collateral Agent), the Securities or the Purchase Contract Agreement or any
other document referred to or provided for herein or therein or for any
failure by the Company or any other Person (except the Collateral Agent) to
perform any of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder (except pursuant to directions furnished under Section 6.02
hereof); (d) shall not be responsible for any action taken or omitted to be
taken by it hereunder or under any other document or instrument referred to
or provided for herein or in connection herewith or therewith, except for
its own negligence; and (e) shall not be required to advise any party as to
selling or retaining, or taking or refraining from taking any action with
respect to, any securities or other property deposited hereunder. Subject
to the foregoing, during the term of this Agreement the Collateral Agent
shall take all reasonable action in connection with the safe keeping and
preservation of the Pledged Treasury Notes hereunder.
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder. In no event shall the
Collateral Agent be liable for any amount in excess of the value of the
Pledged Treasury Notes.
6.02. Instructions of the Company. The Company shall have the right, by
one or more instruments in writing executed and delivered to the Collateral
Agent, to direct the time, method and place of conducting any proceeding
for any right or remedy available to the Collateral Agent, or of exercising
any power conferred on the Collateral Agent, or to direct the taking or
refraining from taking of any
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action authorized by this Agreement; provided, however, that (i) such
direction shall not conflict with the provisions of any law or of this
Agreement and (ii) the Collateral Agent shall be adequately indemnified as
provided herein. Nothing in this Section 6.02 shall impair the right of the
Collateral Agent in its discretion to take any action or omit to take any
action which it deems proper and which is not inconsistent with such
direction.
6.03. Reliance by Collateral Agent. The Collateral Agent shall be
entitled to rely upon any certification, order, judgment, opinion, notice
or other communication (including, without limitation, any thereof by
telephone, telecopy, telex, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper
Person or Persons (without being required to determine the correctness of
any fact stated therein), and upon advice and statements of legal counsel
and other experts selected by the Collateral Agent. As to any matters not
expressly provided for by this Agreement, the Collateral Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder
in accordance with instructions given by the Company in accordance with
this Agreement.
6.04. Rights in Other Capacities. The Collateral Agent and its affiliates
may (without having to account therefor to the Company) accept deposits
from, lend money to, make investments in and generally engage in any kind
of banking, trust or other business with the Purchase Contract Agent and
any Holder of Securities (and any of their subsidiaries or affiliates) as
if it were not acting as the Collateral Agent, and the Collateral Agent and
its affiliates may accept fees and other consideration from the Purchase
Contract Agent and any Holder of Securities without having to account for
the same to the Company, provided that the Collateral Agent covenants and
agrees with the Company that the Collateral Agent shall not accept, receive
or permit there to be created in its favor any security interest, lien or
other encumbrance of any kind in or upon the Pledged Treasury Notes.
6.05. Non-Reliance on Collateral Agent. The Collateral Agent shall not be
required to keep itself informed as to the performance or observance by the
Purchase Contract Agent or any Holder of Securities of this Agreement, the
Purchase Contract Agreement, the Securities or any other document referred
to or provided for herein or therein or to inspect the properties or books
of the Purchase Contract Agent or any Holder of Securities. The Collateral
Agent shall not have any duty or responsibility to provide the Company with
any credit or other information concerning the affairs, financial condition
or business of the Purchase Contract Agent or any Holder of Securities (or
any of their affiliates) that may come into the possession of the
Collateral Agent or any of its affiliates.
6.06. Compensation and Indemnity. The Company agrees: (i) to pay the
Collateral Agent from time to time reasonable compensation for all services
rendered by it hereunder and (ii) to indemnify the Collateral Agent for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of its powers and duties
under this Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of such powers and duties.
6.07. Failure to Act. In the event of any ambiguity in the provisions of
this Agreement or any dispute between or conflicting claims by or among the
undersigned and/or any other person or entity with respect to any funds or
property deposited hereunder, the Collateral Agent shall be entitled, at
its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute
or conflict shall continue, and the Collateral Agent shall not be or become
liable in any way to any of the undersigned for its failure or refusal to
comply with such conflicting claims, demands or instructions. The
Collateral Agent shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally determined
by a court of competent jurisdiction or settled by agreement between the
conflicting parties as evidenced in a writing, satisfactory to the
Collateral Agent or (ii) the Collateral Agent shall have received security
or an indemnity satisfactory to the Collateral Agent sufficient to save the
Collateral Agent harmless from and
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against any and all loss, liability or expense which the Collateral Agent
may incur by reason of its acting. The Collateral Agent may in addition
elect to commence an interpleader action or seek other judicial relief or
orders as the Collateral Agent may deem necessary. Notwithstanding anything
contained herein to the contrary, the Collateral Agent shall not be
required to take any action that is in its opinion contrary to law or to
the terms of this Agreement, or which would in its opinion subject it or
any of its officers, employees or directors to liability.
6.08. Resignation of Collateral Agent. Subject to the appointment and
acceptance of a successor Collateral Agent as provided below, (a) the
Collateral Agent may resign at any time by giving notice thereof to the
Company and the Purchase Contract Agent, (b) the Collateral Agent may be
removed at any time by the Company and (c) if the Collateral Agent fails to
perform any of its material obligations hereunder in any material respect
for a period of not less than 20 days after receiving notice of such
failure by the Purchase Contract Agent and such failure shall be
continuing, the Collateral Agent may be removed by the Purchase Contract
Agent. The Purchase Contract Agent shall promptly notify the Company of any
removal of the Collateral Agent pursuant to clause (c) of the immediately
preceding sentence. Upon any such resignation or removal, the Company shall
have the right to appoint a successor Collateral Agent. If no successor
Collateral Agent shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Collateral Agent's giving of
notice of resignation or such removal, then the retiring Collateral Agent
may petition any court of competent jurisdiction for the appointment of a
successor Collateral Agent. The Collateral Agent shall be a bank which has
an office in New York, New York with a combined capital and surplus of at
least $50,000,000. Upon the acceptance of any appointment as Collateral
Agent hereunder by a successor Collateral Agent, such successor Collateral
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall take all appropriate action to transfer any
money and property held by it hereunder (including the Pledged Treasury
Notes) to such successor Collateral Agent. The retiring Collateral Agent
shall, upon such succession, be discharged from its duties and obligations
as Collateral Agent hereunder. After any retiring Collateral Agent's
resignation hereunder as Collateral Agent, the provisions of this Section 6
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Collateral Agent.
Promptly following the removal or resignation of the Collateral Agent the
Company shall give written notice thereof to Moody's Investors Services, Inc.
6.09. Right to Appoint Agent or Advisor. The Collateral Agent shall have
the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any
action taken or omitted by such agents or advisors selected in good faith.
The provisions of this Section 6 shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent.
Section 7. Amendment.
7.01. Amendment Without Consent of Holders. Without the consent of any
Holders, the Company, the Collateral Agent and the Purchase Contract Agent, at
any time and from time to time, may amend this Agreement, in form satisfactory
to the Company, the Collateral Agent and the Purchase Contract Agent, for any
of the following purposes:
(1) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to evidence and provide for the acceptance of appointment hereunder
by a successor Collateral Agent or Purchase Contract Agent; or
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<PAGE>
(4) to cure any ambiguity, to correct or supplement any provisions herein
which may be inconsistent with any other such provisions herein, or to make
any other provisions with respect to such matters or questions arising
under this Agreement, provided such action shall not adversely affect the
interests of the Holders.
7.02. Amendment with Consent of Holders. With the consent of the Holders of
not less than 66 2/3% of the Outstanding Securities, by Act of said Holders
delivered to the Company, the Agent and the Collateral Agent, the Company, when
authorized by a Board Resolution, the Agent and the Collateral Agent may amend
this Agreement for the purpose of modifying in any manner the provisions of
this Agreement or the rights of the Holders in respect of the Securities;
provided, however, that no such supplemental agreement shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(1) change the amount or type of Treasury Notes underlying a Security,
impair the right of the Holder of any Security to receive interest payments
on the underlying Treasury Notes or otherwise adversely affect the Holder's
rights in or to such Treasury Notes; or
(2) otherwise effect any action that would require the consent of the
Holder of each Outstanding Security affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by an agreement
supplemental thereto; or
(3) reduce the percentage of Outstanding Securities the consent of whose
Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
7.03. Execution of Amendments. In executing any amendment permitted by this
Section, the Collateral Agent and the Purchase Contract Agent shall be entitled
to receive and (subject to Section 6.01 hereof, with respect to the Collateral
Agent, and Section 701 of the Purchase Contract Agreement, with respect to the
Purchase Contract Agent) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement.
7.04. Effect of Amendments. Upon the execution of any amendment under this
Section, this Agreement shall be modified in accordance therewith, and such
amendment shall form a part of this Agreement for all purposes; and every
Holder of Security Certificates theretofore or thereafter authenticated,
executed on behalf of the Holders and delivered under the Purchase Contract
Agreement shall be bound thereby.
7.05. Reference to Amendments. Security Certificates authenticated, executed
on behalf of the Holders and delivered after the execution of any amendment
pursuant to this Section may, and shall if required by the Collateral Agent or
the Purchase Contract Agent, bear a notation in form approved by the Purchase
Contract Agent and the Collateral Agent as to any matter provided for in such
amendment. If the Company shall so determine, new Security Certificates so
modified as to conform, in the opinion of the Collateral Agent, the Purchase
Contract Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Outstanding Security Certificates.
Section 8. Miscellaneous.
8.01. No Waiver. No failure on the part of the Collateral Agent or any of its
agents to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Collateral Agent or
any of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
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8.02. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. The Company, the Collateral
Agent and the Holders from time to time of the Securities, acting through the
Purchase Contract Agent as their attorney-in-fact, hereby submit to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in New York City
for the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company, the Collateral
Agent and the Holders from time to time of the Securities, acting through the
Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the
fullest extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
8.03. Notices. All notices, requests, consents and other communications
provided for herein (including, without limitation, any modifications of, or
waivers or consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telecopy) delivered to the intended
recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have
been duly given when transmitted by telecopier or personally delivered or, in
the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
8.04. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the respective successors and assigns of the Company, the
Collateral Agent and the Purchase Contract Agent, and the Holders from time to
time of the Securities, by their acceptance of the same, shall be deemed to
have agreed to be bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the Purchase Contract
Agent.
8.05. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.06. Severability. If any provision hereof is invalid and unenforceable in
any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in order to carry out the intentions of the
parties hereto as nearly as may be possible and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
8.07. Expenses, etc. The Company agrees to reimburse the Collateral Agent
for: (a) all reasonable out-of-pocket costs and expenses of the Collateral
Agent (including, without limitation, the reasonable fees and expenses of
counsel to the Collateral Agent), in connection with (i) the negotiation,
preparation, execution and delivery or performance of this Agreement and (ii)
any modification, supplement or waiver of any of the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent (including,
without limitation, reasonable fees and expenses of counsel) in connection with
(i) any enforcement or proceedings resulting or incurred in connection with
causing any Holder of Securities to satisfy its obligations under the Purchase
Contracts forming a part of the Securities and (ii) the enforcement of this
Section 8.07; and (c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any other document referred to herein and all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated hereby.
8.08. Security Interest Absolute. All rights of the Collateral Agent and
security interests hereunder, and all obligations of the Holders from time to
time of the Securities hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
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(b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from
any requirement of, the Purchase Contract Agreement or any Purchase
Contract or any other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
BROWNING-FERRIS INDUSTRIES, INC.
By: /s/ Henry L. Hirvela
----------------------------------
Name: Henry L. Hirvela
Title: Vice President--Treasurer
Address for Notices:
Browning-Ferris Building
757 North Eldridge
Post Office Box 3151
Houston, Texas 77253
Attention: Treasurer
Telecopy: (713) 870-7844
THE FIRST NATIONAL BANK
OF CHICAGO,
as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By: /s/ John R. Prendiville
----------------------------------
Name: John R. Prendiville
Title: Vice President
Address for Notices:
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services
Division
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION,
as Collateral Agent
By: /s/ Bill Marshall
----------------------------------
Name: Bill Marshall
Title: Vice President and Trust
Officer
Address for Notices:
Post Office Box 2558
Houston, Texas 77252
Attention: Corporate Trust Dept.
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EXHIBIT 8
[LETTERHEAD OF SULLIVAN & CROMWELL APPEARS HERE]
June 29, 1995
Browning-Ferris Industries, Inc.
757 N. Eldridge
Houston, Texas 77079
Gentlemen:
We have acted as special United States tax counsel to Browning-Ferris
Industries, Inc. ("Browning-Ferris") in connection with the Registration
Statement on Form S-3 of Browning-Ferris filed with the Securities and Exchange
Commission on June 19, 1995 (the "Registration Statement") and hereby confirm
to you our opinion as set forth under the heading "Certain Federal Income Tax
Consequences" in the Prospectus Supplement relating thereto dated June 28,
1995.
We hereby consent to the filing with the Securities and Exchange Commission
of this letter as an exhibit to a Current Report on Form 8-K filed in
connection with the Registration Statement and the reference to us in the
Prospectus Supplement under the headings "Certain Federal Income Tax
Consequences" and "Legal Matters". In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933.
Very truly yours,
/s/ Sullivan & Cromwell
