SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 12,
1995
Continental Waste Industries, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-22602 11-2909502
(State of or other (Commission IRS Employer
jurisdiction of incorporation) File Number) Identification
Number)
67 Walnut Avenue, Suite 103, Clark, New Jersey 07066
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (908)396-
0018
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
The Registrant and certain selling stockholders of the
Registrant recently completed the sale of shares of the
Registrant's common stock, par value $0.001 per share, pursuant
to the Registrant's Registration Statements on Form SB-2 dated
September 12, 1995 (Reg. No. 33-62589) and October 2, 1995
(Reg. No. 33-99742). The public offering related to these
registration statements (the "Offering") closed on Friday,
October 6, 1995. The underwriters for the Offering
subsequently exercised their option to purchase an additional
275,879 shares of the Registrant's common stock, solely to
cover over-allotments, from the Registrant and certain selling
stockholders of the Registrant, which transaction closed on
October 17, 1995 (the "Over-allotment"). The Registrant
realized proceeds from the Offering and the Overallotment
totalling $30,642,424. The Registrant has used all of the
proceeds from the Offering and the Over-allotment to reduce
outstanding indebtedness under the Registrant's $45.0 million
revolving credit facility with a bank syndicate led by LaSalle
National Bank (the "Credit Facility"). This reduction provides
the Registrant with renewed borrowing capacity under
its Credit Facility for future acquisitions, capital
expenditures and general corporate purposes.
On October 5, 1995, the Registrant executed the Second
Amendment to the Credit Agreement (the "Second Amendment")
relating to the Credit Facility. The Second Amendment provides
for, among other things, an increase in the amount of capital
expenditures the Registrant is allowed to make in any fiscal
year from $10 million to $16 million and an increase, subject
to certain conditions, in the amount of consideration the
Registrant is allowed to provide for acquisitions in the fiscal
year ended December 31, 1995.
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c)(1) This Current Report on Form 8-K contains the
underwriting agreement, dated as of October 3, 1995 (the
"Underwriting Agreement"), among the Registrant, certain
shareholders of the Registrant, Raymond James & Associates,
Inc., First Analysis Securities Corporation, NatWest Securities
Limited and each of the underwriters named in Schedule I thereto
(the "Underwriters"). The Underwriting Agreement relates to the
sale of shares described in Item 5 of this Current Report on
Form 8-K.
(c)(2) This Current Report on Form 8-K contains the
Second Amendment to Credit Agreement dated October 5, 1995 (the
"Second Amendment"). The Second Amendment relates to the
amendment to the Credit Facility described in Item 5 of this
Current Report on Form 8-K.
EXHIBIT INDEX
(1) Underwriting Agreement.
(10) Second Amendment
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
CONTINENTAL WASTE INDUSTRIES, INC.
By: /s/ Carlos E. Aguero
Director, President and Chief
Executive Officer
Dated: October 27, 1995
1,972,529 Common Shares
CONTINENTAL WASTE INDUSTRIES, INC.
____________________
UNDERWRITING AGREEMENT
St. Petersburg, Florida
October 3, 1995
Raymond James & Associates, Inc.
First Analysis Securities Corporation
NatWest Securities Limited
As Representatives of the Several Underwriters
c/o Raymond James & Associates, Inc.
880 Carillon Parkway
St. Petersburg, Florida 33716
Ladies and Gentlemen:
Continental Waste Industries, Inc., a Delaware corporation
(the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell an aggregate of 1,700,000
common shares, $0.001 par value per share (the "Common
Shares"), of the Company, to the several Underwriters named in
Schedule I hereto (the "Underwriters"), and certain
shareholders of the Company named in Schedule II hereto under
the heading "Firm Shares" propose, subject to the terms and
conditions stated herein, to sell to the Underwriters an
aggregate of 272,529 Common Shares (the aggregate of such
1,972,529 Common Shares to be sold by the Company and the
shareholders of the Company named in Schedule II hereto under
the heading "Firm Shares" hereinafter referred to as the "Firm
Shares"). In addition, the Company and certain shareholders of
the Company named in Schedule II under the heading "Additional
Shares" (the shareholders named in Schedule II hereto being the
"Selling Shareholders") have agreed to sell to the
Underwriters, upon the terms and conditions set forth herein,
up to an additional 295,879 Common Shares (the "Additional
Shares") to cover over-allotments by the Underwriters, if any.
The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares".
The Company and the Selling Shareholders wish to confirm
as follows their agreement with you and the other several
Underwriters, on whose behalf you are acting, in connection
with the several purchases of the Shares from the Company and
the Selling Shareholders.
1. Registration Statement and Prospectus. The Company
has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions
of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form SB-2 (File No. 33-
62589), as amended, including a prospectus subject to
completion, relating to the Shares. Such registration
statement, as amended at the time when it becomes or became
effective and as thereafter amended by post-effective
amendment, is referred to in this Agreement as the
"Registration Statement". The prospectus in the form included
in the Registration Statement, or, if the prospectus included
in the Registration Statement omits information in reliance
upon Rule 430A under the Act and such information is included
in a prospectus filed with the Commission pursuant to Rule
424(b) under the Act or as part of a post-effective amendment
to the Registration Statement after the Registration Statement
becomes effective, the prospectus as so filed is referred to in
this Agreement as the "Prospectus". If the Company elects to
rely on Rule 434 under the Act, all references to the
Prospectus shall be deemed to include, without limitation, the
form of prospectus and the term sheet, taken together, provided
to the Underwriters by the Company in reliance on Rule 434
under the Act (the "Rule 434 Prospectus"). If the Company
files a registration statement to register a portion of the
Shares and relies on Rule 462(b) under the Act for such
registration statement to become effective upon filing with the
Commission (the "Rule 462 Registration Statement"), then any
reference to "Registration Statement" herein shall be deemed to
include the registration statement on Form SB-2 (File No. 33-
62589) and the Rule 462 Registration Statement, as each such
registration statement may be amended pursuant to the Act. The
prospectus subject to completion in the form included in the
Registration Statement at the time of the initial filing of
such Registration Statement with the Commission and as such
prospectus is amended or supplemented from time to time until
the date of the Prospectus, are collectively referred to in
this Agreement as the "Prepricing Prospectus".
2. Agreements to Sell and Purchase. The Company and the
Selling Shareholders (as set forth on Schedule II hereof under
the heading "Firm Shares") hereby agree, severally and not
jointly, to sell the Firm Shares to the Underwriters and, upon
the basis of the representations, warranties and agreements of
the Company and the Selling Shareholders herein contained and
subject to all the terms and conditions set forth herein, each
Underwriter agrees, severally and not jointly, to purchase from
the Company and the Selling Shareholders at a purchase price of
$15.51 per Share (the "purchase price per Share"), the number
of Firm Shares set forth opposite the name of such Underwriter
in Schedule I hereto (or such number of Firm Shares as adjusted
pursuant to Section 11 hereof).
The Company and the Selling Shareholders named in Schedule
II under the heading "Additional Shares" hereby also agree,
severally and not jointly, to sell to the Underwriters the
number of Additional Shares (subject to such adjustments as you
may determine to avoid fractional shares) which bears the same
proportion to the total number of Additional Shares to be
purchased by the Underwriters as, in the case of a Selling
Shareholder, the number of Additional Shares set forth opposite
the name of such Selling Shareholder in Schedule II hereto
under the heading "Additional Shares", and in the case of the
Company, 275,656 Additional Shares, bears to the total number
of Additional Shares. Upon the basis of the representations,
warranties and agreements of the Company and the Selling
Shareholders herein contained and subject to all the terms and
conditions set forth herein, the Underwriters shall have the
right for 30 days from the date of the Prospectus to purchase
from the Company up to 275,656 Additional Shares and from
certain of the Selling Shareholders (in accordance with
Schedule II hereof under the heading "Additional Shares") up to
20,223 Additional Shares, in each case at the purchase price
per Share for the Firm Shares. The Additional Shares may be
purchased solely for the purpose of covering over-allotments,
if any, made in connection with the offering of the Firm
Shares. If any Additional Shares are to be purchased, each
Underwriter, severally and not jointly, agrees to purchase the
number of Additional Shares (subject to such adjustments as you
may determine to avoid fractional shares) which bears the same
proportion to the total number of Additional Shares to be
purchased by the Underwriters as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I
hereto (or such number of Firm Shares as adjusted pursuant to
Section 11 hereof) bears to the total number of Firm Shares.
3. Terms of Public Offering. The Company and the
Selling Shareholders have been advised by you that the
Underwriters propose to make a public offering of their
respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective
as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor.
Delivery to the Underwriters of the Firm Shares and payment
therefor shall be made at the offices of Raymond James &
Associates, Inc., 880 Carillon Parkway, St. Petersburg,
Florida, at 10:00 a.m., St. Petersburg, Florida time, on
October 6, 1995 (the "Closing Date"). The place of closing for
the Firm Shares and the Closing Date may be varied by agreement
between you and the Company.
Delivery to the Underwriters of and payment for any
Additional Shares to be purchased by the Underwriters shall be
made at the offices of Raymond James & Associates, Inc., 880
Carillon Parkway, St. Petersburg, Florida, at 10:00 a.m., St.
Petersburg, Florida time, on such date or dates (the
"Additional Closing Date") (which may be the same as the
Closing Date but shall in no event be earlier than the Closing
Date nor earlier than three nor later than ten business days
after the giving of the notice hereinafter referred to) as
shall be specified in a written notice from you on behalf of
the Underwriters to the Company and the Selling Shareholders
that are selling Additional Shares of the Underwriters'
determination to purchase a number, specified in such notice,
of Additional Shares. Such notice may be given to the Company
and the Selling Shareholders that are selling Additional Shares
by you at any time prior to the 28th day after the date of the
Prospectus. The place of closing for the Additional Shares and
the Additional Closing Date may be varied by agreement among
you and the Company.
Certificates for the Firm Shares and for any Additional
Shares shall be registered in such names and in such
denominations as you shall request prior to 1:00 p.m., St.
Petersburg, Florida time, not later than the second full
business day preceding the Closing Date or the Additional
Closing Date, as the case may be. Such certificates shall be
made available to you in St. Petersburg, Florida for inspection
and packaging not later than 9:30 a.m., St. Petersburg, Florida
time, on the business day immediately preceding the Closing
Date or the Additional Closing Date, as the case may be. The
certificates evidencing the Firm Shares and any Additional
Shares shall be delivered to you on the Closing Date or the
Additional Closing Date, as the case may be, against payment of
the purchase price therefor by wire transfer in federal (same
day) funds to the designated account(s) established on behalf
of the Company at LaSalle National Bank, N.A.
5. Covenants and Agreements of the Company. The Company
covenants and agrees with the several Underwriters as follows:
(a) The Company will use its best efforts to cause
the Registration Statement to become effective, if it has not
already become effective, and will advise you promptly and, if
requested by you, will confirm such advice in writing (i) when
the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective, (ii) if
Rule 430A under the Act is employed, when the Prospectus has
been timely filed pursuant to Rule 424(b) under the Act, (iii)
of any request by the Commission for amendments or supplements
to the Registration Statement, any Prepricing Prospectus or the
Prospectus or for additional information, (iv) of the issuance
by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the
suspension of qualification of the Shares for offering or sale
in any jurisdiction or the initiation of any proceeding for
such purposes and (v) within the period of time referred to in
subsection 5(e) hereof, of any change in the Company's
condition (financial or other), business, prospects,
properties, net worth or results of operations, or of any event
that comes to the attention of the Company that makes any
statement made in the Registration Statement or the Prospectus
(as then amended or supplemented) untrue in any material
respect or that requires the making of any additions thereto or
changes therein in order to make the statements therein not
misleading in any material respect, or of the necessity to
amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at
any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company
will make every reasonable effort to obtain the withdrawal of
such order at the earliest possible time. If the Company
elects to rely on Rule 434 under the Act, the Company will
provide the Underwriters with copies of the form of Rule 434
Prospectus (including a term sheet that complies with the
requirements of Rule 434 under the Act), in such number as the
Underwriters may reasonably request, and file or transmit for
filing with the Commission in accordance with Rule 424(b) of
the Act the form of Prospectus complying with Rule 434(b)(2) of
the Act by the close of business in New York on the business
day immediately following the date hereof. If the Company
elects not to rely on Rule 434 under the Act, the Company will
provide the Underwriters with copies of the form of Prospectus,
in such number as the Underwriters may reasonably request, and
file or transmit for filing with the Commission such Prospectus
in accordance with Rule 424(b) of the Act by the close of
business in New York on the business day immediately following
the date hereof.
(b) The Company will furnish to you, without charge,
two signed duplicate originals of the Registration Statement as
originally filed with the Commission and of each amendment
thereto, including financial statements and all exhibits
thereto, and will also furnish to you, without charge, such
number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto as you may
reasonably request.
(c) The Company will not file any Rule 462
Registration Statement or any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus
of which you shall not previously have been advised (with a
reasonable opportunity to review such amendment or supplement)
or to which you have reasonably objected after being so
advised.
(d) Prior to the execution and delivery of this
Agreement, the Company has delivered or will deliver to you,
without charge, in such quantities as you have requested or may
hereafter reasonably request, copies of each form of the
Prepricing Prospectus. The Company consents to the use, in
accordance with the provisions of the Act and with the
securities laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by dealers, prior to
the date of the Prospectus, of each Prepricing Prospectus so
furnished by the Company.
(e) As soon after the execution and delivery of this
Agreement as is practicable and thereafter from time to time
for such period as in the reasonable opinion of counsel for the
Underwriters a prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or a
dealer, and for so long a period as you may request for the
distribution of the Shares, the Company will deliver to each
Underwriter, without charge, as many copies of the Prospectus
(and of any amendment or supplement thereto) as they may
reasonably request. The Company consents to the use of the
Prospectus (and of any amendment or supplement thereto) in
accordance with the provisions of the Act and with the
securities laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by all dealers to whom
Shares may be sold, both in connection with the offering and
sale of the Shares and for such period of time thereafter as
the Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer.
(f) The Company will cooperate with you and counsel
for the Underwriters in connection with the registration or
qualification of the Shares for offering and sale by the
several Underwriters and by dealers under the securities laws
of such jurisdictions as you may reasonably designate and will
file such consents to service of process or other documents as
may be reasonably necessary in order to effect such
registration or qualification; provided that in no event shall
the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits,
other than those arising out of the offering or sale of the
Shares, in any jurisdiction where it is not now so subject.
(g) The Company will make generally available to its
security holders a consolidated earnings statement (in form
complying with the Provisions of Rule 158), which need not be
audited, covering a twelve-month period commencing after the
effective date of the Registration Statement and the Rule 462
Registration Statement, if any, and ending not later than 15
months thereafter, as soon as practicable after the end of such
period, which consolidated earnings statement shall satisfy the
provisions of Section 11(a) of the Act.
(h) During the period ending three years from the
date hereof, the Company will furnish to you and, upon your
request, to each of the other Underwriters, (i) as soon as
available, a copy of each proxy statement, quarterly or annual
report or other report of the Company mailed to shareholders or
filed with the Commission, the NASD or any securities exchange
and (ii) from time to time such other information concerning
the Company as you may reasonably request.
(i) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provision hereof
(except pursuant to a termination under Section 11 hereof) or
if this Agreement shall be terminated by the Underwriters
because of any inability, failure or refusal on the part of the
Company or the Selling Shareholders to perform any agreement
herein or to comply with any of the terms or provisions hereof,
the Company agrees to reimburse you and the other Underwriters
for all out-of-pocket expenses (including travel expenses and
fees and expenses of counsel for the Underwriters but excluding
wages and salaries paid by you) reasonably incurred by you in
connection herewith.
(j) The Company will apply the net proceeds payable
to it from the sale of the Shares for the purposes set forth
under "Use of Proceeds" in the Prospectus.
(k) If Rule 430A under the Act is employed, the
Company will timely file the Prospectus pursuant to Rule 424(b)
under the Act.
(l) For a period of 120 days after commencement of
the public offering of the Shares by the Underwriters, the
Company will not, without the prior written consent of Raymond
James & Associates, Inc., sell, contract to sell or otherwise
dispose of any Common Shares or rights to purchase any Common
Shares, except (i) to the Underwriters pursuant to this
Agreement, (ii) upon the exercise of currently outstanding
warrants and options, and (iii) not more than 400,000 Common
Shares to be issued in connection with the acquisition of
businesses by the Company, provided that the recipients of
Common Shares referred to in clause (iii) agree that they will
not sell such Common Shares prior to 120 days after the
commencement of the public offering of the Shares by the
Underwriters.
(m) Prior to the Closing Date or the Additional
Closing Date, as the case may be, the Company will furnish to
you, as promptly as possible, copies of any quarterly unaudited
interim consolidated financial statements of the Company and
its subsidiaries for any period subsequent to the periods
covered by the financial statements appearing in the
Prospectus.
(n) The Company will comply with all provisions of
any undertakings contained in the Registration Statement.
(o) The Company will timely file with the National
Association of Securities Dealers Automated Quotation System
National Market ("Nasdaq National Market") all documents and
notices required by the Nasdaq National Market of companies
that have issued securities that are traded in the over-the-
counter market and quotations for which are reported by the
Nasdaq National Market.
6. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter on the date
hereof, and shall be deemed to represent and warrant to each
Underwriter on the Closing Date and the Additional Closing
Date, that:
(a) Each Prepricing Prospectus included as part of
the Registration Statement as originally filed or as part of
any amendment or supplement thereto or filed pursuant to Rule
424(a) under the Act, complied when so filed in all material
respects with the provisions of the Act. The foregoing shall
not apply to the information contained in the last paragraph of
the cover page of the Prospectus and the information contained
in paragraphs one, three, seven (the first sentence only),
eleven, twelve, and thirteen of the section of the Prospectus
captioned "Underwriting" which was furnished to the Company by
any Underwriter through the Representatives specifically for
use in the Registration Statement and Prospectus and which
constitute the only written information furnished by or on
behalf of any Underwriter to the Company for such use
(collectively the "Underwriter Information"). The Commission
has not issued any order preventing or suspending the use of
any Prepricing Prospectus.
(b) The Registration Statement (including any Rule
462 Registration Statement), in the form in which it became or
becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective, and
the Prospectus, and any supplement or amendment thereto when
filed with the Commission under Rule 424(b) under the Act, will
comply in all material respects with the provisions of the Act
and will not at any such times 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, except that this representation and warranty does
not apply to statements in or omissions from the Registration
Statement or the Prospectus (or any amendment or supplement
thereto) made in reliance upon and in conformity with the
Underwriter Information.
(c) The capitalization of the Company is and will be
as set forth in the Prospectus as of the date thereof. All the
outstanding Common Shares have been, and as of the Closing Date
will be, duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights;
the Shares to be issued and sold to the Underwriters by the
Company have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully
paid and nonassessable and free of any preemptive or similar
rights; the capital stock of the Company conforms in all
respects to the description contained in the Prospectus (or any
amendment or supplement thereto) under the caption "Description
of Capital Stock"; and the delivery of certificates for the
Shares pursuant to the terms of this Agreement and payment for
the Shares will pass valid title to the Shares, free and clear
of any lien, charge, claim, security interest, other
encumbrance or defect in title to the several Underwriters
purchasing the Shares in good faith and without notice of any
lien, charge, claim, security interest, other encumbrance or
defect in title. The certificates for the Shares are in valid
and sufficient form.
(d) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State
of Delaware with full power (corporate and other) and authority
to own, lease and operate its properties and to conduct its
business as presently conducted and as described in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto), and is duly registered and qualified to
conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or
qualification, except where the failure to so register or
qualify would not have a material adverse effect on the
condition (financial or other), business, prospects,
properties, net worth or results of operations of the Company
and the Subsidiaries (as defined in subsection 6(e) hereof)
taken as a whole.
(e) Except for the subsidiaries set forth in Exhibit
21 to the Registration Statement, the Company does not own an
interest in or control, directly or indirectly, any other
corporation, partnership, joint venture, association, trust or
other business organization. Each of the subsidiaries set
forth on Exhibit 21 to the Registration Statement
(collectively, the "Subsidiaries") is a corporation duly
organized, validly existing and in good standing under the laws
of their respective jurisdictions of incorporation with full
power (corporate and other) and authority to own, lease and
operate its properties and to conduct its business as presently
conducted and as described in the Registration Statement and
the Prospectus (and any amendment or supplement thereto), and
is duly registered and qualified to conduct its business and is
in good standing in each other jurisdiction or place where the
nature of its properties or the conduct of its business
requires such registration or qualification, except where the
failure to so register or qualify would not have a material
adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole. All of the
outstanding shares of capital stock of each Subsidiary have
been duly authorized and validly issued, are fully paid and
nonassessable, and (except as indicated on Exhibit 21 to the
Registration Statement) are owned by the Company directly or
indirectly through one of the other Subsidiaries, free and
clear of any lien, charge, claim, equity, security interest or
other encumbrance.
(f) There are no legal or governmental actions,
suits or proceedings pending or threatened, against the Company
or any Subsidiary, or to which the Company or any Subsidiary,
or to which any of their respective properties, is subject,
that are required to be described in the Registration Statement
or the Prospectus (or any amendment or supplement thereto) but
which are not described as required. Except as described in
the Prospectus, there is no action, suit, inquiry, proceeding,
or investigation by or before any court or governmental or
other regulatory or administrative agency or commission pending
or threatened, against or involving the Company or any
Subsidiary, which might individually or in the aggregate
prevent or adversely affect the transactions contemplated by
this Agreement or result in a material adverse change in the
condition (financial or otherwise), properties, prospects,
business, net worth or results of operations of the Company and
the Subsidiaries taken as a whole, nor is there any basis for
any such action, suit, inquiry, proceeding, or investigation.
There are no agreements, contracts, indentures, leases or other
instruments that are required to be disclosed in the
Registration Statement or the Prospectus (or any amendment or
supplement thereto) or to be filed as an exhibit to the
Registration Statement that are not disclosed or filed as
required by the Act. All such contracts to which the Company
or any Subsidiary is a party have been duly authorized,
executed and delivered by the Company or such Subsidiary,
constitute valid and legally binding agreements of the Company
or such Subsidiary and are enforceable against the Company or
such Subsidiary in accordance with the terms thereof, and
neither the Company nor any Subsidiary any other party, is in
breach of or default under any of such contracts, other than a
breach or default that would not reasonably be expected to have
a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth, or results
of operations of the Company and its Subsidiaries taken as a
whole.
(g) Neither the Company nor any Subsidiary is in
violation of its certificate or articles of incorporation,
bylaws, or other organizational documents, or in material
violation of any law, ordinance, administrative or governmental
rule or regulation applicable to the Company or any Subsidiary
or of any decree of any court or governmental agency or body
having jurisdiction over the Company or any Subsidiary, or in
default in any material respect, except as disclosed in the
Registration Statement or Prospectus, in the performance of any
obligation, agreement or condition contained in (i) any bond,
debenture, note or any other evidence of indebtedness, or (ii)
any other agreement to which the Company or any of the
Subsidiaries is a party or by which any of them or their
respective properties may be bound, other than a default that
would not reasonably be expected to have a material adverse
effect on the condition (financial or other), business,
prospects, properties, net worth, or results of operations of
the Company and its Subsidiaries taken as a whole; and there
does not exist any state of facts which constitutes an event of
default on the part of the Company or any Subsidiary as defined
in such documents or which, with notice or lapse of time or
both, would constitute such an event of default, other than an
event of default that would not reasonably be expected to have
a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth, or results
of operations of the Company and its Subsidiaries taken as a
whole.
(h) The execution and delivery of this Agreement and
the performance by the Company of its obligations under this
Agreement have been duly and validly authorized by the Company,
and this Agreement has been duly executed and delivered by the
Company and constitutes the valid and legally binding agreement
of the Company, enforceable against the Company in accordance
with its terms.
(i) None of the offer, issuance, sale or delivery of
the Shares, the execution, delivery or performance of this
Agreement by the Company, the compliance by the Company with
all provisions hereof, or the consummation by the Company of
the transactions contemplated hereby, including the
distribution of the Shares by the Underwriters (i) requires any
consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body,
administrative agency or other governmental body, or official
(except such as may be required for the registration of the
Shares under the Act and compliance with the securities laws of
any state or the bylaws and rules of the NASD, all of which
will be, or have been, effected in accordance with this
Agreement), (ii) conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, the
certificate or articles of incorporation, bylaws, or other
organizational documents, of the Company or any Subsidiary, or
any agreement, indenture, lease or other instrument to which
the Company or any Subsidiary is a party or by which any of
them or any of their respective properties may be bound, (iii)
violates any statute, law, regulation, ruling, filing,
judgment, injunction, order or decree applicable to the
Company, any Subsidiary or any of their respective properties,
or (iv) results in the creation or imposition of any lien,
claim, charge, security interest or other encumbrance upon any
property or assets of the Company or any Subsidiary.
(j) Except as set forth in the Registration
Statement or the Prospectus, the Company does not have
outstanding and at the Closing Date (and the Additional Closing
Date, if applicable) will not have outstanding any options to
purchase, or any warrants to subscribe for, or any securities
or obligations convertible into, or any contracts or
commitments to issue or sell, any Common Shares or any such
warrants or convertible securities or obligations. No holder
of securities of the Company has rights to the registration of
any securities of the Company because of the filing of the
Registration Statement that have not been satisfied or
heretofore waived in writing, if required.
(k) To the best knowledge of the Company, Arthur
Andersen LLP, KPMG Peat Marwick LLP and Darrell T.
Schvaneveldt, the certified public accountants who have audited
the financial statements filed as part of the Registration
Statement and the Prospectus (or any amendment or supplement
thereto) are independent public accountants as required by the
Act.
(l) The financial statements, including the pro
forma financial statements, together with related schedules and
notes, included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present
fairly the consolidated financial position, results of
operations, shareholders' equity and cash flows of the Company
and the Subsidiaries on the basis stated in the Registration
Statement at the respective dates or for the respective periods
to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in the
Registration Statement and Prospectus (and any amendment or
supplement thereto) is accurately presented and prepared on a
basis consistent with such financial statements and the books
and records of the Company. No other financial statements or
schedules are required to be included in the Registration
Statement.
(m) Except as set forth in the Registration
Statement and the Prospectus (or any amendment or supplement
thereto), subsequent to the respective dates as of which such
information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), (i) the
Company and the Subsidiaries have not incurred any material
liabilities or obligations, indirect, direct or contingent, or
entered into any transaction which is not in the ordinary
course of business or which could result in a material
reduction in the future earnings of the Company and the
Subsidiaries, (ii) the Company and the Subsidiaries have not
sustained any material loss or interference with their
respective businesses or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered
by insurance, (iii) the Company has not paid or declared any
dividends or other distributions with respect to its capital
stock and the Company and the Subsidiaries are not in default
in the payment of principal or interest on any outstanding debt
obligations, (iv) there has not been any change in the capital
stock of the Company or any Subsidiary (other than upon the
sale of the Shares and upon the exercise of options and
warrants described in the Prospectus) or any material change in
the indebtedness of the Company and the Subsidiaries (other
than in the ordinary course of business), and (v) there has not
been any material adverse change, or any development involving
or which would be expected to involve a potential future
material adverse change, in the condition (financial or
otherwise), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries.
(n) The Company and each Subsidiary has good and
marketable title to all property (real and personal) described
in the Prospectus as being owned by it or otherwise necessary
for the conduct of its business, free and clear of all liens,
claims, charges, security interests or other encumbrances
except (i) such as are described in the Prospectus or (ii) such
as would not have a material adverse effect on the condition
(financial or other), business, prospects, properties, net
worth or results of operations of the Company and the
Subsidiaries taken as a whole. The property (real and
personal) held under lease by the Company or the Subsidiaries
is held under valid, subsisting and enforceable leases, with
only such exceptions as in the aggregate would not have a
material adverse effect on the condition (financial or other),
business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a
whole.
(o) The Company has not distributed and will not
distribute any offering material in connection with the
offering and sale of the Shares other than the Prepricing
Prospectus, the Prospectus, or other offering material, if any,
as permitted by the Act.
(p) The Company has not taken, and will not take,
directly or indirectly, any action which constituted, or any
action designed, or which might reasonably be expected to cause
or result in or constitute, under the Act or otherwise,
stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares or
otherwise.
(q) The Company is not an "investment company", an
"affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended.
(r) The Company and each Subsidiary has all permits,
licenses, franchises, approvals, consents and authorizations of
governmental or regulatory authorities, including authorization
given by consent order, agreed order, consent decree, letter
approval, consent of conduct, formal or informal regulatory
interpretation, policy document, guidance document, internal
agency memorandum or any and all similar approvals or
authorizations (each, a "Permit", and collectively "Permits")
as are necessary to own its properties and to conduct its
business in the manner described in the Prospectus, subject to
such qualifications as may be described in the Prospectus, with
only such exceptions as in the aggregate would not have a
material adverse effect on the condition (financial or other),
business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a
whole; the Company and each Subsidiary has fulfilled and
performed all of its obligations with respect to each such
Permit and no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination of any
such Permit or result in any other material impairment of the
rights of the holder of any such Permit, subject in each case
to such qualification as may be described in the Prospectus,
with only such exceptions as in the aggregate would not have a
material adverse effect on the condition (financial or other),
business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a
whole; and, the Prospectus sets forth an accurate and complete
description of the restrictions related to such Permits.
(s) The Company and the Subsidiaries have complied
and will comply in all material respects with wage and hour
determinations issued by the U.S. Department of Labor under the
Service Contract Act of 1965 and the Fair Labor Standards Act
in paying its employees' salaries, fringe benefits, and other
compensation for the performance of work or other duties in
connection with contracts with the federal government. The
Company and the Subsidiaries have complied and will comply in
all material respects with the terms of all certifications and
representations made to the federal government in connection
with the submission of any bid or proposal or any contract.
The Company and the Subsidiaries have complied and will comply
in all material respects with their obligations under their
agreements and contracts with the federal government and
agencies thereof.
(t) The Company and the Subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in
accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted
only in accordance with management's general or specific
authorizations, and (iv) the recorded accountability for assets
is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(u) Neither the Company nor any Subsidiary has,
directly or indirectly, at any time during the past five years
(i) made any unlawful contribution to any candidate for
political office, or failed to disclose fully any contribution
in violation of law, or (ii) made any payment to any federal,
state, local or foreign governmental official, or other person
charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States
or any jurisdiction thereof or applicable foreign
jurisdictions.
(v) The Company and the Subsidiaries have obtained
all Permits required under federal, state, local and foreign
statutes, ordinances and other laws relating to pollution or
protection of the environment, including laws relating to
emissions, discharges, releases, or threatened releases of
pollutants, contaminants, chemicals, or industrial, hazardous,
or toxic materials or wastes into the environment (including,
without limitation, ambient air, surface water, ground water,
land surface, or subsurface strata) or otherwise relating to
the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, hazardous, or toxic
materials or wastes, or any regulation, rule, code, plan,
order, decree, judgment, injunction, notice, or demand letter
issued, entered, promulgated, or approved thereunder
("Environmental Laws"). The Company and the Subsidiaries are
in material compliance with all terms and conditions of all
required Permits, and with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules, and timetables contained in the Environmental Laws
other than as set forth in the Prospectus. There is no pending
or threatened civil or criminal litigation, notice of
violation, or administrative proceeding relating in any way to
the Environmental Laws (including but not limited to notices,
demand letters, or claims under the Resource Conservation and
Recovery Act of 1976, as amended ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), the Emergency Planning and Community
Right to Know Act of 1986, as amended ("EPCRA"), the Clean Air
Act, as amended ("CAA"), or the Clean Water Act, as amended
("CWA") and similar federal, state, local, or foreign laws)
involving the Company or the Subsidiaries other than as set
forth in the Prospectus. To the best of the Company's
knowledge after due inquiry, there have not been and there are
not any past, present, or foreseeable future events,
conditions, circumstances, activities, practices, incidents,
actions, or plans which may interfere with or prevent continued
compliance, in all material respects, with Environmental Laws,
or which may give rise to any material common law or legal
liability, or otherwise form the basis of any material claim,
action, demand, suit, proceeding, hearing, study, or
investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge, release, or
threatened release into the environment, of any pollutant,
contaminant, chemical, or industrial, hazardous, or toxic
material or waste, including, without limitation, any liability
arising, or any claim, action, demand, suit, proceeding,
hearing, study, or investigation which may be brought, under
RCRA, CERCLA, EPCRA, CAA, CWA or similar federal, foreign,
state or local laws other than as set forth in the Prospectus.
(w) The Company and the Subsidiaries own and have
full right, title and interest in and to, or have valid
licenses to use, each material trade name, trademark or service
mark under which the Company or any Subsidiary conducts its
business, and the Company and the Subsidiaries have created no
lien or encumbrance on, or granted any right or license with
respect to, any such trade name, trademark or service mark;
there is no claim pending against the Company or any Subsidiary
with respect to any trade name, trademark or service mark and
neither the Company nor any Subsidiary has received notice that
any trade name, trademark or service mark which it uses or has
used in the conduct of its business infringes upon or conflicts
with the rights of any third party.
(x) All offers and sales by the Company and the
Subsidiaries of their securities prior to the date hereof were
made in compliance with the Act and all other applicable
federal and state laws or regulations.
(y) The Shares have been duly authorized for trading
on the Nasdaq National Market subject to notice of issuance.
(z) All federal, foreign, state and local tax
returns required to be filed by or on behalf of the Company or
any Subsidiary with respect to all periods ended prior to the
date of this Agreement have been filed (or are the subject of a
valid extension) with the appropriate federal, foreign, state
and local authorities and all such tax returns, as filed, are
accurate in all material respects. All federal, foreign, state
and local taxes (including estimated tax payments) required to
be shown on all such tax returns or claimed to be due from or
with respect to the business of the Company or any Subsidiary
have been paid or reflected as a liability on the financial
statements of the Company and the Subsidiaries for appropriate
periods, except for those taxes or claims therefor which are
being contested by the Company in good faith and for which
appropriate reserves are reflected in the Company's financial
statements. All deficiencies asserted as a result of any
federal, foreign, state or local tax audits have been paid or
finally settled and no issue has been raised in any such audit
which, by application of the same or similar principles,
reasonably could be expected to result in a proposed deficiency
for any other period not so audited. No state of facts exists
or has existed which would constitute grounds for the
assessment of any tax liability with respect to the periods
which have not been audited by appropriate federal, foreign,
state or local authorities. There are no outstanding
agreements or waivers extending the statutory period of
limitation applicable to any federal, foreign, state or local
tax return for any period. On the Closing Date, and Additional
Closing Date, if any, all stock transfer and other taxes which
are required to be paid in connection with the sale of the
shares to be sold by the Company to the Underwriters will have
been fully paid by the Company and all laws imposing such taxes
will have been complied with.
(aa) Except as set forth in the Prospectus, there
are no transactions with affiliates, as defined in Rule 405
promulgated under the Act, which are required by the Act to be
disclosed in the Registration Statement.
7. Representations and Warranties of the Selling
Shareholders. Each of the Selling Shareholders hereby
severally represents and warrants to each Underwriter on the
date hereof (except as otherwise set forth herein), and shall
be deemed to severally represent and warrant to each
Underwriter on the Closing Date and the Additional Closing
Date, that:
(a) All consents, approvals, authorizations and
orders necessary for the execution and delivery by such Selling
Shareholder of this Agreement, the Power of Attorney (the
"Power of Attorney") and the Custody Agreement (the "Custody
Agreement") referred to in the last paragraph of this Section
7, and for the sale and delivery of the Shares to be sold by
such Selling Shareholder, have been obtained; and such Selling
Shareholder has full right, power and authority to enter into
this Agreement, the Power of Attorney and the Custody
Agreement, and to sell, assign, transfer and deliver the Shares
to be sold by such Selling Shareholder.
(b) This Agreement, the Power of Attorney and the
Custody Agreement have been duly authorized, executed and
delivered by or on behalf of each of the Selling Shareholders
and constitute valid and legally binding agreements of each
such Selling Shareholder enforceable in accordance with their
respective terms, except as may be limited by bankruptcy,
insolvency, reorganization or other laws of general application
relating to or affecting enforcement of creditors' rights
generally or the availability of equitable remedies, regardless
of whether such enforcement is considered in a proceeding in
equity or at law. The performance of this Agreement, the Power
of Attorney and the Custody Agreement and the consummation of
the transactions contemplated herein and therein will not
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, voting trust agreement,
note agreement, lease or other agreement or instrument to which
such Selling Shareholder is a party or by which such Selling
Shareholder or such Selling Shareholder's properties are bound,
or under any order, rule or regulation of any court or
governmental agency or body applicable to such Selling
Shareholder or the business or property of such Selling
Shareholder.
(c) Such Selling Shareholder has, and immediately
prior to the Closing Date will have, good and valid title to
the Shares to be sold by such Selling Shareholder hereunder,
free and clear of all liens, encumbrances, equities,
shareholder agreements, voting trusts or claims of any nature
whatsoever, and, upon delivery of such Shares and payment
therefor pursuant hereto, good and valid title to such Shares,
free and clear of all liens, encumbrances, equities,
shareholder agreements, voting trusts or claims of any nature
whatsoever (other than those arising by or through the
Underwriters), will pass to the several Underwriters.
(d) Except as contemplated by this Agreement, such
Selling Shareholder will not directly or indirectly, assign,
transfer, offer, sell, hypothecate, or otherwise dispose of any
Common Shares (or securities convertible into or exchangeable
for or any rights to purchase or acquire Common Shares), and
will not in any way reduce his, her or its risk of ownership or
investment in any Common Shares, prior to the expiration of 120
days from the date that the Prospectus is first filed pursuant
to Rule 424(b) under the Act, without your prior written
consent.
(e) Such Selling Shareholder has not taken, and will
not take, directly or indirectly, any action which constituted,
or any action designed, or which might reasonably be expected
to cause or result in or constitute, under the Act or
otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares or otherwise.
(f) No consent, approval, authorization or order of,
or any filing or declaration with, any court or governmental
agency or body has been or is required for the consummation by
the Selling Shareholder of the transactions on his part
contemplated in this Agreement, the Power of Attorney or the
Custody Agreement, except such as have been duly obtained under
the Act and such as may be required under state securities laws
or the bylaws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Shares to
be sold by the Selling Shareholder.
(g) Such Selling Shareholder is familiar with the
Registration Statement, the Prepricing Prospectus and the
Prospectus and has no knowledge of any material fact or
condition not set forth in the Registration Statement, the
Prepricing Prospectus or the Prospectus which has adversely
affected, or may adversely affect, the condition (financial or
otherwise), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries taken
as a whole, and the sale of the Shares proposed to be sold by
such Selling Shareholder is not prompted by any such knowledge.
(h) All information with respect to such Selling
Shareholder contained in the Registration Statement, the
Prepricing Prospectus and the Prospectus (as amended or
supplemented, if the Company shall have filed with the
Commission any amendment or supplement thereto) complied and
will comply in all material respects with all applicable
provisions of the Act, contains and will contain all statements
required to be stated therein in accordance with the Act, and
does not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading.
(i) Such Selling Shareholder has no actual knowledge
that the representations and warranties of the Company
contained in Section 6 hereof are not true and correct.
(j) The Selling Shareholder has not distributed and
will not distribute any offering material in connection with
the offering and sale of the Shares other than the Prepricing
Prospectus, the Prospectus or other offering material, if any,
as permitted by the Act.
(k) On the Closing Date, and Additional Closing
Date, if any, all stock transfer and other taxes (other than
income taxes) which are required to be paid in connection with
the sale and transfer of the Shares to be sold by the Selling
Shareholder will have been fully paid for by such Selling
Shareholder and all laws imposing such taxes will have been
fully complied with.
In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and
Fiscal Responsibility Act of 1982 with respect to the
transactions herein contemplated, the Selling Shareholders
severally agree to deliver to you at least two days prior to
the Closing or, Additional Closing, if any, a properly
completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
Each of the Selling Shareholders represents and warrants
that certificates in negotiable form representing all of the
Shares to be sold by such Selling Shareholder have been placed
in custody under a Custody Agreement, in the form heretofore
furnished to you, duly executed and delivered by such Selling
Shareholder to the Company, as custodian (the "Custodian"), and
that such Selling Shareholder has duly executed and delivered a
Power of Attorney, in the form heretofore furnished to you,
appointing Jeffrey E. Levine and Carlos E. Aguero as such
Selling Shareholder's attorneys-in-fact (the "Attorneys-in-
Fact") with authority, acting individually or collectively, to
execute and deliver this Agreement on behalf of such Selling
Shareholder, to determine the purchase price to be paid by the
Underwriters to the Selling Shareholders as provided in Section
2 hereof, to authorize the delivery of the Shares to be sold by
such Selling Shareholder or otherwise to act on behalf of such
Selling Shareholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement. Each
of the Selling Shareholders specifically agrees that the Shares
represented by the certificates held in custody for such
Selling Shareholders under the Custody Agreement are subject to
the interest of the Underwriters hereunder, and that the
arrangements made by such Selling Shareholder for such custody,
and the appointment by such Selling Shareholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent
irrevocable. Each of the Selling Shareholders specifically
agrees that the obligations of such Selling Shareholders
hereunder shall not be terminated by operation of law, whether
by the death or incapacity of any individual Selling
Shareholder or, in the case of an estate or trust, by the death
or incapacity of any executor or trustee or the termination of
such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or
corporation, or by the occurrence of any other event. If any
individual Selling Shareholder or any executor or trustee
should die or become incapacitated, or if any such estate or
trust shall be terminated, or if any such partnership or
corporation should be dissolved, or if any other such event
should occur before the delivery of the Shares hereunder,
certificates representing the Shares shall be delivered by or
on behalf of the Selling Shareholders in accordance with the
terms and conditions of this Agreement and the Custody
Agreement, and actions taken by the Attorneys-in-Fact pursuant
to the Powers of Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not
occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice
of such death, incapacity, termination, dissolution or other
event.
8. Expenses. The Company and, unless otherwise paid by
the Company, the Selling Shareholders will pay or cause to be
paid (in such proportions as they may agree among themselves)
the following: (i) the fees, disbursements and expenses of the
Company's and Selling Shareholders' counsel and accountants in
connection with the registration of the Shares under the Act
and all other expenses in connection with the preparation,
printing and filing of the Registration Statement and the
Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof and of any Prepricing
Prospectus to the Underwriters and dealers, (ii) the printing
and delivery (including, without limitation, postage, air
freight charges and charges for counting and packaging) of such
copies of the Registration Statement, the Prospectus, each
Prepricing Prospectus, the Blue Sky memoranda, the Power of
Attorney, the Master Agreement Among Underwriters, this
Agreement, the Selected Dealer Agreement and all amendments or
supplements to any of them as may be reasonably requested for
use in connection with the offering and sale of the Shares,
(iii) all expenses in connection with the qualification of the
Shares for offering and sale under Blue Sky laws, including the
fees of the counsel for the Underwriters in connection
therewith, (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 Shares and the
reasonable fees and disbursements of the Underwriters' counsel
relating thereto, (v) the cost of preparing stock certificates,
(vi) the costs and charges of any transfer agent or registrar,
(vii) the cost of the tax stamps, if any, in connection with
the issuance and delivery of the Shares to the respective
Underwriters, (viii) all other fees, costs and expenses
referred to in Item 25 of the Registration Statement, and (ix)
all other costs and expenses incident to the performance of the
obligations of the Company and the Selling Shareholders
hereunder which are not otherwise specifically provided for in
this Section 8. Notwithstanding the foregoing, in the event
that the proposed offering is terminated for the reasons set
forth in subsection 5(i) hereof, the Company agrees to
reimburse the Underwriters as provided in subsection 5(i)
hereof.
9. Indemnification and Contribution. The Company and
the Selling Shareholders severally but not jointly agree to
indemnify and hold harmless you and each other Underwriter, the
directors, officers, employees and agents of each Underwriter,
and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading (except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon an
untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the Underwriter
Information) or arising out of or based upon any inaccuracy in
the representations and warranties of the Company or the
Selling Shareholders contained herein or any failure of the
Company or the Selling Shareholders to perform their respective
obligations hereunder or under law; provided, however, that
with respect to any untrue statement or omission made in any
Prepricing Prospectus, the indemnity agreement contained in
this Section 9 shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such
Underwriter) from whom the person asserting any such losses,
claims, damages or liabilities purchased the Shares concerned
if both (A) a copy of the Prospectus was not sent or given to
such person at or prior to the written confirmation of the sale
of such Shares to such person as required by the Act, and (B)
the untrue statement or omission in the Prepricing Prospectus
was corrected in the Prospectus. Notwithstanding anything in
this Section 9, in no event shall any Selling Shareholder's
obligation under this Section 9 exceed the total net proceeds
from the offering received by such Selling Shareholder (it
being agreed that the Company shall bear the balance).
In addition to its other obligations under this Section 9,
the Company and the Selling Shareholders agree that, as an
interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any inaccuracy in the
representations and warranties of the Company or the Selling
Shareholders herein or failure to perform their obligations
hereunder, all as set forth in this Section 9, they will
reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and
enforceability of the Company's or the Selling Shareholders'
obligation to reimburse each Underwriter for such expenses and
the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held
to have been improper, each Underwriter shall promptly return
it to the Company together with interest, compounded daily
determined on the basis of the base lending rate announced from
time to time by Chase Manhattan Bank, N.A. or any successor
entity (the "Prime Rate"). Any such interim reimbursement
payments which are not made to the Underwriters within 30 days
of a request for reimbursement shall bear interest at the Prime
Rate from the date of such request.
If any action or claim shall be brought against any
Underwriter or any person controlling any Underwriter in
respect of which indemnity may be sought against the Company or
the Selling Shareholders, such Underwriter or such controlling
person shall promptly notify in writing the party or parties
against whom indemnification is being sought (an "indemnifying
party", or if more than one, the "indemnifying parties"), and
such indemnifying party or indemnifying parties shall assume
the defense thereof, including the employment of counsel
reasonably acceptable to such Underwriter or such controlling
person and payment of all fees and expenses associated
therewith. Such Underwriter or any such controlling person
shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the Company
and the Selling Shareholders shall not be liable for the fees
and expenses of more than one counsel unless (i) the
indemnifying party or indemnifying parties have agreed in
writing to pay such fees and expenses, (ii) the indemnifying
party or indemnifying parties have failed to assume the defense
and employ counsel reasonably acceptable to the Underwriter or
such controlling person or (iii) the named parties to any such
action (including any impleaded parties) include both such
Underwriter or such controlling person and the indemnifying
party or indemnifying parties, and such Underwriter or such
controlling person shall have been advised by its counsel that
one or more legal defenses may be available to the Underwriter
which may not be available to the Company, or that
representation of such indemnified party and any indemnifying
party or indemnifying parties by the same counsel would be
inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing
interests between them (in which case the indemnifying party or
indemnifying parties shall not have the right to assume the
defense of such action on behalf of such Underwriter or such
controlling person (notwithstanding its (their) obligation to
bear the fees and expenses of such counsel)). The indemnifying
party or indemnifying parties shall not be liable for any
settlement of any such action effected without its or their, as
applicable, written consent, but if settled with such written
consent, or if there be a final judgment for the plaintiff in
any such action, the indemnifying party or indemnifying parties
agrees to indemnify and hold harmless any Underwriter and any
such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or
judgment, but in the case of a judgment only to the extent
stated in the immediately preceding paragraph.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement, and any person
who controls the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act and the Selling
Shareholders, to the same extent as the foregoing indemnity
from the Company and the Selling Shareholders to each
Underwriter, but only with respect to the Underwriter
Information. If any action or claim shall be brought or
asserted against the Company, any of its directors, any such
officers, or any such controlling person or the Selling
Shareholders based on the Registration Statement, the
Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto, and in respect of which indemnity may be
sought against any Underwriter pursuant to this paragraph, such
Underwriter shall have the rights and duties given to the
Company and the Selling Shareholders by the immediately
preceding paragraph (except that if the Company shall have
assumed the defense thereof such Underwriter shall not be
required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses
of such counsel shall be at such Underwriter's expense), and
the Company, its directors, any such officers, and any such
controlling persons and the Selling Shareholders shall have the
rights and duties given to the Underwriters by the immediately
preceding paragraph.
In addition to its other obligations under this Section 9,
each Underwriter severally agrees that, as an interim measure
during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission,
described in this Section 9 which relates to Underwriter
Information, it will reimburse the Company (and, to the extent
applicable, each officer, director, controlling person or
Selling Shareholder) on a quarterly basis for all reasonable
legal or other expenses incurred in connection with
investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the
Company (and, to the extent applicable, each officer, director,
controlling person or Selling Shareholder) for such expenses
and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To
the extent that any such interim reimbursement payment is so
held to have been improper, the Company (and, to the extent
applicable, each officer, director, controlling person or
Selling Shareholder) shall promptly return it to the
Underwriters together with interest, compounded daily,
determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Company within
30 days of a request for reimbursement shall bear interest at
the Prime Rate from the date of such request.
If the indemnification provided for in this Section 9 is
unavailable or insufficient for any reason whatsoever to an
indemnified party under the first or fourth paragraph of this
Section 9 in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the
Company and the Selling Shareholders on the one hand and the
Underwriters on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the
Company and the Selling Shareholders on the one hand and the
Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by
the Company and the Selling Shareholders 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 (before
deducting expenses) received by the Company and the Selling
Shareholders bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus;
provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of
the relative benefits received by the Company and the Selling
Shareholders or the Underwriters from the offering of the
Shares shall include the net proceeds (before deducting
expenses) received by the Company and the Selling Shareholders,
and the underwriting discounts and commissions received by the
Underwriters, from the sale of such Additional Shares, in each
case computed on the basis of the respective amounts set forth
in the notes to the table on the cover page of the Prospectus.
The relative fault of the Company and the Selling Shareholders
on the one hand and the Underwriters on the other hand 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 and the Selling
Shareholders on the one hand or relates to Underwriter
Information on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contribution
pursuant to this Section 9 was determined by a pro rata
allocation (even if the Company and the Selling Shareholders on
the one hand and the Underwriters on the other hand were
treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable
considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages, liabilities and
expenses referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required
to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed to
the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 9 are
several in proportion to the respective numbers of Firm Shares
set forth opposite their names in Schedule I hereto (or such
numbers of Firm Shares increased as set forth in Section 11
hereof) and not joint.
Notwithstanding the second and fifth paragraphs of this
Section 9, any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification
or contribution under this Section 9 shall be paid by the
indemnifying party to the indemnified party as such losses,
claims, damages, liabilities or expenses accrue. The
indemnity, contribution and reimbursement agreements contained
in Section 9 and the representations and warranties of the
Company and the Selling Shareholders, respectively, set forth
in this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on
behalf of any Underwriter or any person controlling any
Underwriter, the Company, its directors or officers or any
person controlling the Company or the Selling Shareholders,
(ii) acceptance of any Shares and payment therefor hereunder
and (iii) any termination of this Agreement. A successor to
any Underwriter or any person controlling any Underwriter, or
to the Company, its directors or officers, or any person
controlling the Company or the Selling Shareholders, shall be
entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 9.
It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth
in the second and fifth paragraphs of this Section 9, including
the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by
arbitration conducted pursuant to the Code of Arbitration
Procedure of the NASD. Any such arbitration must be commenced
by service of a written demand for arbitration or written
notice of intention to arbitrate, therein electing the
arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to
said demand or notice is authorized to do so. Such an
arbitration would be limited to the operation of the interim
reimbursement provisions contained in the second and fifth
paragraphs of this Section 9, and would not resolve the
ultimate propriety or enforceability of the obligation to
reimburse expenses which is created by the provisions of the
second and fifth paragraphs of this Section 9.
10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares
hereunder are subject to the following conditions:
(a) If the Registration Statement is not already
effective, it shall have become effective not later than 9:30
a.m., New York City time, on the date hereof, or at such later
date and time as shall be consented to in writing by you, and
all filings required by Rules 424(b), 430A, and 462 under the
Act shall have been timely made.
(b) You shall be reasonably satisfied that since the
respective dates as of which information is given in the
Registration Statement and Prospectus, (i) there shall not have
been any change in the capital stock (other than pursuant to
the exercise of outstanding options and warrants described in
the Prospectus) of the Company or any Subsidiary or any
material change in the indebtedness (other than in the ordinary
course of business) of the Company or any Subsidiary, (ii)
except as described in the Registration Statement or the
Prospectus, no material verbal or written agreement or other
transaction shall have been entered into by the Company or any
Subsidiary, which is not in the ordinary course of business or
which would reasonably be expected to result in a material
reduction in the future earnings of the Company and the
Subsidiaries, (iii) no loss or damage (whether or not insured)
to the property of the Company or any Subsidiary shall have
been sustained which would reasonably be expected to have a
material adverse effect on the condition (financial or
otherwise), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries taken
as a whole, (iv) no legal or governmental action, suit or
proceeding affecting the Company or any Subsidiary which is
material to the Company and the Subsidiaries or which affects
or would reasonably be expected to affect the transactions
contemplated by this Agreement shall have been instituted or
threatened, and (v) there shall not have been any material
change in the condition (financial or otherwise), business,
prospects, management, net worth or results of operations of
the Company and the Subsidiaries which makes it impractical or
inadvisable in your judgment to proceed with the public
offering or purchase the Shares as contemplated hereby.
(c) You shall have received on the Closing Date (and
the Additional Closing Date, if any) an opinion of Shefsky
Froelich & Devine Ltd., as counsel for the Company and the
Selling Shareholders, dated the Closing Date, satisfactory to
you and your counsel.
(d) You shall have received on the Closing Date (and
the Additional Closing Date, if any) an opinion of Varnum,
Riddering, Schmidt & Howlett LLP, satisfactory to you and your
counsel.
(e) You shall have received on the Closing Date (and
the Additional Closing Date, if any) an opinion of Juan Jose
Lao Martin, satisfactory to you and your counsel.
(f) You shall have received on the Closing Date
(and the Additional Closing Date, if any) an opinion
satisfactory to you and your counsel of Mexican counsel
satisfactory to you and your counsel.
(g) You shall have received on the Closing Date an
opinion of McDermott, Will & Emery, as counsel for the
Underwriters, dated the Closing Date with respect to the
issuance and sale of the Shares, the Registration Statement and
other related matters as you may reasonably request and the
Company and its counsel shall have furnished to your counsel
such documents as they may reasonably request for the purpose
of enabling them to pass upon such matters.
(h) You shall have received letters addressed to you
and dated the date hereof and the Closing Date from Arthur
Andersen LLP, KPMG Peat Marwick LLP and Darrell T.
Schvaneveldt, independent certified public accountants,
substantially in the forms heretofore approved by you.
(i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no
proceedings for that purpose shall be pending or, to the
knowledge of the Company, shall be threatened or contemplated
by the Commission at or prior to the Closing Date, (ii) no
order suspending the effectiveness of the Registration
Statement or the qualification or registration of the Shares
under the securities laws of any jurisdiction shall be in
effect and no proceeding for such purpose shall be pending or,
to the knowledge of the Company, threatened or contemplated by
the Commission or the authorities of any jurisdiction, (iii)
any request for additional information on the part of the staff
of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the
Commission or such authorities, (iv) after the date hereof no
amendment or supplement to the Registration Statement or the
Prospectus shall have been filed unless a copy thereof was
first submitted to you and you did not object thereto in good
faith, and (v) all of the representations and warranties of the
Company contained in this Agreement shall be true and correct
in all respects on and as of the date hereof and on and as of
the Closing Date as if made on and as of the Closing Date, and
you shall have received a certificate, dated the Closing Date
and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are
acceptable to you) to the effect set forth in this subsection
10(i) and subsection 10(j) hereof.
(j) The Company shall not have failed in any respect
at or prior to the Closing Date to have performed or complied
with any of its agreements herein contained and required to be
performed or complied with by it hereunder at or prior to the
Closing Date.
(k) You shall have received a certificate, dated on
and as of the Closing Date, by or on behalf of each of the
Selling Shareholders to the effect that as of such Closing Date
such Selling Shareholder's representations and warranties in
this Agreement are true and correct as if made on and as of
such Closing Date, and that such Selling Shareholder has
performed all such Selling Shareholder's obligations and
satisfied all the conditions on such Selling Shareholder's part
to be performed or satisfied at or prior to the Closing Date.
(l) The Company and the Selling Shareholders shall
have furnished or caused to have been furnished to you such
further certificates and documents as you shall have reasonably
requested.
(m) At or prior to the Closing Date, you shall have
received the written commitment of each of the Company's
officers and directors that they will not directly or
indirectly, assign, transfer, offer, sell, hypothecate, or
otherwise dispose of any Common Shares (or securities
convertible into or exchangeable for or any rights to purchase
or acquire Common Shares), and will not in any way reduce his
or her risk of ownership or investment in any Common Shares,
prior to the expiration of 120 days from the date that the
Prospectus is first filed pursuant to Rule 424(b) under the
Act, without your prior written consent.
All such opinions, certificates, letters and other
documents will be in compliance with the provisions hereof only
if they are reasonably satisfactory in form and substance to
you and your counsel.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on
and as of the Additional Closing Date of the conditions set
forth in this Section 10, except that, if the Additional
Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 10 shall be
dated as of the Additional Closing Date and the opinions called
for by this Section 10 shall be revised to reflect the sale of
Additional Shares.
If any of the conditions hereinabove provided for in this
Section 10 shall not have been satisfied when and as required
by this Agreement, this Agreement may be terminated by you by
notifying the Company of such termination in writing or by
telegram at or prior to such Closing Date, but you shall be
entitled to waive any of such conditions.
11. Effective Date of Agreement. This Agreement shall
become effective upon the later of (a) the execution and
delivery hereof by the parties hereto; (b) release of
notification of the effectiveness of the Registration Statement
by the Commission; and (c) if a post-effective amendment is
required to be filed pursuant to Rule 430A under the Act, the
effectiveness of such post-effective amendment.
If any one or more of the Underwriters shall fail or
refuse to purchase Firm Shares which it or they have agreed to
purchase hereunder, and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than 15% of the
aggregate number of the Firm Shares, each non-defaulting
Underwriter shall be obligated, severally, in the proportion
which the number of Firm Shares set forth opposite its name in
Schedule I hereto bears to the aggregate number of Firm Shares
set forth opposite the names of all non-defaulting Underwriters
or in such other proportion as you may specify in the Master
Agreement Among Underwriters, to purchase the Firm Shares which
such defaulting Underwriter or Underwriters agreed, but failed
or refused to purchase. If any Underwriter or Underwriters
shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs
is more than 15% of the aggregate number of Firm Shares and
arrangements satisfactory to you, the Company and the Selling
Shareholders for the purchase of such Firm Shares are not made
within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting
Underwriter, the Company or the Selling Shareholders. In any
such case which does not result in termination of this
Agreement, either you or the Company and the Selling
Shareholders shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of
any such default of any such Underwriter under this Agreement.
12. Termination of Agreement. This Agreement shall be
subject to termination in your absolute discretion, without
liability on the part of any Underwriter to the Company or the
Selling Shareholders by notice to the Company and the Selling
Shareholders, if prior to the Closing Date or the Additional
Closing Date (if different from the Closing Date and then only
as to the Additional Shares), as the case may be, in your sole
judgment, (i) trading in the Common Shares shall have been
suspended by the Commission or the Nasdaq National Market, (ii)
trading in securities generally on the New York Stock Exchange,
or Nasdaq National Market shall have been suspended or
materially limited, or minimum or maximum prices shall have
been generally established on such exchange or market, or
additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon
trading in securities generally by any such exchange or market
or by order of the Commission or any court or other
governmental authority, (iii) a general moratorium on
commercial banking activities shall have been declared by
either federal or New York State authorities or (iv) there
shall have occurred any outbreak or escalation of hostilities
or other international or domestic calamity, crisis or change
in political, financial or economic conditions or other
material event the effect of which on the financial markets of
the United States is such as to make it, in your judgment,
impracticable or inadvisable to market the Shares or to enforce
contracts for the sale of the Shares. Notice of such
cancellation shall be promptly given to the Company and its
counsel by telegraph, telecopy or telephone and shall be
subsequently confirmed by letter.
13. Miscellaneous. Except as otherwise provided in
Sections 5 and 12 hereof, notice given pursuant to any of the
provisions of this Agreement shall be in writing and shall be
delivered (i) if to the Company or Selling Shareholders, to the
office of the Company at Continental Waste Industries, Inc., 67
Walnut Avenue, Suite 103, Clark, New Jersey, 07066, Attention:
Carlos E. Agero, with a copy to Shefsky Froelich & Devine
Ltd., 444 North Michigan Avenue, Suite 2500, Chicago, Illinois,
60611, Attention: Michael J. Choate, or (ii) if to you, as
Representatives of the Underwriters, to Raymond James &
Associates, Inc., 880 Carillon Parkway, St. Petersburg, Florida
33716, Attention: Thomas W. Mullins, with a copy to McDermott,
Will & Emery, 227 West Monroe Street, Suite 5500, Chicago,
Illinois 60606, Attention: Thomas J. Murphy.
This Agreement has been and is made solely for the benefit
of the several Underwriters, the Company, its directors and
officers, and the other controlling persons referred to in
Section 9 hereof, the Selling Shareholders and their respective
successors and assigns, to the extent provided herein, and no
other person shall acquire or have any right under or by virtue
of this Agreement. Neither of the terms "successor" and
"successors and assigns" as used in this Agreement shall
include a purchaser from you of any of the Shares in his status
as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Illinois without reference to choice of law principles
thereunder.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
This Agreement shall be effective when, but only when, at
least one counterpart hereof shall have been executed on behalf
of each party hereto.
The Company, the Selling Shareholders and the Underwriters
each hereby irrevocably waive any right they may have to a
trial by jury in respect to any claim based upon or arising out
of this Agreement or the transactions contemplated hereby.
* * * * *
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Selling Shareholders and the
several Underwriters.
Very truly yours,
CONTINENTAL WASTE
INDUSTRIES, INC.
By: /s/ Jeffrey E. Levine
Name: Jeffrey E. Levine
Title: Senior Vice President
& General Counsel
SELLING SHAREHOLDERS
By: /s/ Jeffrey E. Levine
Name: Jeffrey E. Levine
Title: Senior Vice President
& General Counsel
As Attorney-in-Fact acting
on behalf of each of the
Selling Shareholders named
in Schedule II hereto.
CONFIRMED as of the date first above
mentioned, on behalf of itself and the
other several Underwriters named in
Schedule I hereto.
RAYMOND JAMES & ASSOCIATES, INC.
By: /s/ Thomas W. Mullins
Name: Thomas W. Mullins
Title: Vice President
FIRST ANALYSIS SECURITIES CORPORATION
By: /s/ Steven F. Bouck
Name: Steven F. Bouck
Title: Executive Vice President
NATWEST SECURITIES LIMITED
By: /s/ Timothy Williams
Name: Timothy Williams
Title: Director
SCHEDULE I
Number
of
Name Shares
Raymond James & Associates, Inc.. . . . . . . . . . . . . . . . 466,843
First Analysis Securities Corporation . . . . . . . . . . . . . 466,843
NatWest Securities Limited. . . . . . . . . . . . . . . . . . 466,843
Bear, Stearns & Co. Inc. .. . . . . . . . . . . . . . . . . . . 44,000
Alex. Brown & Sons Incorporated . . . . . . . . . . . . . . . . 44,000
Deutsche Morgan Grenfell/C. J. Lawrence Inc.. . . . . . . . . . 44,000
Donaldson, Lufkin & Jenrette Securities Corporation.. . . . . . 44,000
Merrill Lynch Capital Markets . . . . . . . . . . . . . . . . . 44,000
William Blair & Company . . . . . . . . . . . . . . . . . . . . 33,000
J.C. Bradford & Co. . . . . . . . . . . . . . . . . . . . . . . 33,000
The Chicago Corporation . . . . . . . . . . . . . . . . . . . . 33,000
McDonald & Company Securities, Inc. . . . . . . . . . . . . . . 33,000
Morgan Keegan & Company, Inc. . . . . . . . . . . . . . . . . . 33,000
Piper Jaffray Inc.. . . . . . . . . . . . . . . . . . . . . . . 33,000
Rauscher Pierce Refsnes, Inc. . . . . . . . . . . . . . . . . . 33,000
Southwest Securities, Inc. . . . . . . . . . . . . . . . . . . 33,000
Cleary Gull Reiland & McDevitt Inc. . . . . . . . . . . . . . . 22,000
GS2 Securities, Inc. . . . . . . . . . . . . . . . . . . . . . 22,000
Pennsylvania Merchant Group Ltd. . . . . . . . . . . . . . . . 22,000
Rodman & Renshaw, Inc. . . . . . . . . . . . . . . . . . . . . 22,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,972,529
SCHEDULE II
I. FIRM SHARES
Number
of Firm
Selling Shareholders Shares
Environmental Venture Fund Limited Partnership. . . 94,660
Apex Investment Fund, L.P.. . . . . . . . . . . . . 59,620
The Productivity Fund Limited Partnership . . . . . 45,720
Jerome Case.. . . . . . . . . . . . . . . . . . . . . 733
Michael Coble.. . . . . . . . . . . . . . . . . . . . 567
Robert Coble. . . . . . . . . . . . . . . . . . . . . 400
Robert Coble & Amy Coble (as joint tenants).. . . . . 167
Thomas Coble. . . . . . . . . . . . . . . . . . . . . 5,033
Thomas Coble & Barbara Coble (as joint tenants) . . . 3,333
Catherine Dassow. . . . . . . . . . . . . . . . . . . 400
Tommy Drewery.. . . . . . . . . . . . . . . . . . . . 148
Gregory Gibson. . . . . . . . . . . . . . . . . . . 40,862
Richard Ginsberg. . . . . . . . . . . . . . . . . . 9,700
Victoria Halloran.. . . . . . . . . . . . . . . . . 803
JJB Hilliard WL Lyons, Inc. . . . . . . . . . . . . . 383
Roger McDonald. . . . . . . . . . . . . . . . . . . . 3,000
George Plews. . . . . . . . . . . . . . . . . . . . . 7,000
Total . . . . . . . . . . . . . . . . . . . . . . . 272,529
II. ADDITIONAL SHARES
Number
of
Additional
Selling Shareholders Shares
Michael J. Drury. . . . . . . . . . . . . . . . . . 10,223
Joel Stone. . . . . . . . . . . . . . . . . . . . . 10,000
Total . . . . . . . . . . . . . . . . . . . . . . . 20,223
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment")
is made as of October 5, 1995, by and among LaSalle National
Bank, a national banking association with its principal offices
located in Chicago, Illinois, as agent for the Lenders hereunder
(the "Agent"), various financial institutions which are, or may
become, signatories or parties hereto (individually, a "Lender"
and collectively, the "Lenders"), and Continental Waste
Industries, Inc., a Delaware corporation ("CWI"), together with
its Subsidiaries, which currently consist of Barker Brothers,
Inc., a Tennessee corporation, Barker Brothers Waste, Inc., a
Tennessee corporation, Berrien County Landfill, Inc., a Michigan
corporation, Bluegrass Recycling & Transfer Company, a Kentucky
corporation, Commercial Waste Disposal, Inc., a Kentucky
corporation, Covington Waste, Inc., a Tennessee corporation, CWI
of Illinois, Inc., an Illinois corporation, CWI of Missouri,
Inc., a Missouri corporation, CWI Venture, Inc., a New Jersey
corporation, FLL, Inc., a Michigan corporation, G.E.M.
Environmental Management, Inc., a Delaware corporation, Gila Bend
Regional Landfill, Inc., an Arizona corporation, Greenfield
Environmental Development Corp., a Delaware corporation, Jamax
Corporation, an Indiana corporation, Karat Corp., a New Jersey
corporation, Midwest Material Management, Inc., an Indiana
corporation, Northwest Tennessee Disposal Corporation, a
Tennessee corporation, Prichard Landfill Corporation, a West
Virginia corporation, Sandy Hollow Landfill Corp., a West
Virginia corporation, Sanifill, Inc., a Tennessee corporation,
Southern Illinois Regional Landfill, Inc., an Illinois
corporation, South Trans, Inc., a New Jersey corporation,
Springfield Environmental, Inc., a Delaware corporation,
Springfield Environmental, Inc., an Indiana corporation, Triple G
Landfills, Inc., an Indiana corporation, United Refuse Co., Inc.,
an Indiana corporation, Victory Environmental Services, Inc., a
Delaware corporation, Victory Waste Incorporated, a California
corporation, WPP Continental de Costa Rica S.A., a Costa Rican
corporation, WPP Services, Inc., an Ohio corporation, ASCO
Sanitation, Inc., a Mississippi corporation, Gilliam Transfer,
Inc., a Missouri corporation, Anderson Refuse Co., Inc., an
Indiana corporation, Terre Haute Recycling, Inc., an Indiana
corporation, and CWI Mexican Ventures, S.A. de C.V., a Mexican
corporation (individually, CWI and any of said other corporations
may be referred to herein as a "Borrower," and collectively are
sometimes referred to as the "Borrowers").
WITNESSETH:
WHEREAS, the Borrowers and the Lenders have previously
entered into that certain Credit Agreement dated as of March 28,
1995, as amended by a First Amendment to Credit Agreement dated
June 6, 1995 (as so amended, the "Credit Agreement," with terms
used but not otherwise defined herein being used with the same
meanings as therein defined), whereunder Lenders have made
certain Loans to Borrowers;
WHEREAS, CWI proposes to acquire 85% of the outstanding
common stock of NationsWaste, Inc. for an aggregate purchase
price of approximately $5,000,000 (the "Acquisition");
WHEREAS, the Borrowers have requested certain modifications
to the Credit Agreement and the Lenders are willing to agree to
such modifications upon the terms and conditions set forth
herein:
NOW, THEREFORE, for and in consideration of the foregoing
premises and of the mutual agreements, promises and covenants
contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Loan Documents. The Credit Agreement and all of the
Loan Documents are hereby amended such that all references
therein to the Credit Agreement or any other Loan Documents are
hereby deemed to include this Amendment and the amendments to the
Credit Agreement and the Loan Documents contained herein.
2. Section 8.B.3. Mergers and Acquisitions. Subsection (4)
of Section 8.B.3 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
"(4) The consideration for all such acquisitions may not
exceed a total of $10,000,000 with respect to acquisitions made
during any one Fiscal Year (it being understood that any "unused"
amount of the amount permitted with respect to any one Fiscal
Year shall not carry over to any subsequent Fiscal Year), or
$20,000,000 in the aggregate; provided however, that in the event
the Acquisition is consummated on or prior to December 31, 1995,
(i) said $10,000,000 limit shall be increased to $15,000,000 for
the Fiscal Year ended December 31, 1995, and (ii) said
$20,000,000 limit shall be increased to $25,000,000. In the
event the Acquisition is not consummated on or prior to December
31, 1995, said limits shall remain at $10,000,000 and $20,000,000
respectively. For purposes of this Section, 'consideration'
means the total purchase price (including cash expended, Debt
incurred, and liabilities incurred or assumed) paid or to be
paid, but in any event does not include any portion of the
purchase price paid or payable in the form of common stock or
Subordinated Debt of CWI or out of the proceeds of any public
offering of the common stock of CWI, and 'Acquisition' means the
acquisition by CWI of 85% of the outstanding common stock of
NationsWaste, Inc.;"
3. Section 8.B.3. Mergers and Acquisitions. The following
subsection (6) hereby is added to Section 8.B.3 of the Credit
Agreement:
"(6) The acquisition must have received the prior written
approval of the board of directors or other equivalent governing
body of the Person to be acquired."
4. Section 8.B.2. Capital Expenditures. Section 8.B.2(b)
of the Credit Agreement is hereby deleted in its entirety and
replaced with the following:
"(b) The Borrowers shall not make Capital Expenditures in
excess of Sixteen Million Dollars ($16,000,000) in the aggregate
during any one Fiscal Year, it being understood that the amount
of any Capital Expenditures permitted to be made during any one
Fiscal Year, but not so made, shall not carry over to any
subsequent Fiscal Year; provided however, that this Section
8.B.2(b) shall not prohibit the Borrowers from acquiring assets
in accordance with all of the terms and provisions of Section
8.B.3 of the Credit Agreement; and provided further that
notwithstanding the foregoing, Borrowers shall not make any
Capital Expenditures in excess of Two Million Five Hundred
Thousand Dollars ($2,500,000) in the aggregate during any one
Fiscal Year with respect to greenfield landfill projects
(unpermitted sites)."
5. Conditions.
5.A. Delivery of Documents as Conditions Precedent. The
delivery of each of the following documents, each of which shall
be satisfactory to the Agent in substance and form, by on or
behalf of the Borrowers to the Agent shall constitute separate
and distinct conditions precedent to the effectiveness of this
Amendment:
5.A.1. A copy of this Amendment duly executed by Borrowers.
5.A.2. In form and substance satisfactory to the Agent, any
other documents which the Agent may reasonably request from or to
be delivered by the Borrowers from time to time to effect the
intent of this Amendment and the Loan Documents.
5.B. Delivery of Acquisition Documents. Within 30 days
of the closing of the Acquisition, Borrowers shall deliver to
Lenders any and all information regarding the Acquisition as the
Lenders reasonably may request, including but not limited to a
business description, historical financial statements with
footnotes, interim financial statements, tipping fee and tonnage
information, financial projections and assumptions.
6. Representations; Warranties; Covenants. To induce
the Agent and the Lenders to execute this Amendment, the
Borrowers jointly and severally represent and warrant that, as of
the date hereof:
(i) the representations and warranties set forth in
the Credit Agreement, including, without
limitation, those set forth in Section 7
thereof, and in the Loan Documents to which any
Borrower is a party, are true and correct;
(ii) the covenants and agreements set forth in the
Credit Agreement, including, without limitation,
those set forth in Section 8 thereof as amended
hereby, and in the other Loan Documents to which
any Borrower is a party, are not currently being
breached and are inviolate;
(iii) no Default or Event of Default currently exists
under the Credit Agreement or any Loan Documents
and is continuing; and
(iv) the Borrowers have taken all corporate action
necessary to enter into and authorize the
execution and delivery of this Amendment and the
other Loan Documents to be executed and
delivered hereunder.
7. Reimbursement for Costs. As further inducement for the
Agent and the Lenders to execute this Agreement, the Borrowers
agree to reimburse the Agent for any costs of expenses any such
party may incur in connection with the negotiation and drafting
of this Amendment, including all attorneys' fees.
8. Governing Law; Successors and Assigns. This Amendment
has been executed, deliverd and accepted in and shall be deemed
to have been made under and shall be governed by and construed in
accordance with the internal laws of the State of Illinois
without regard to its conflict of law rules. This Amendment
shall be binding upon Borrowers and their respective successors
and assigns and shall inure to the benefit of Agent, the Lenders
and their respective successors and assigns; provided, however,
that Borrowers shall not have the right to assign their rights or
interests hereunder or under the Credit Agreement without the
prior written consent of Agent.
9. Release. Borrowers, for and on behalf of their
successors and assigns, hereby release, forever discharge and
agree to hold harmless Agent and each Lender, and their
respective succesors and assigns, from any and all claims,
actions or causes of action heretofore arising in any manner
under, purusant to or with respect to the Credit Agreement or the
Loan Documents or Agent's or any Lender's administration or
actions under, pursuant to or with respect to the Credit
Agreement or the Loan Documents and from any suit or proceeding
relating to the foregoing at any time against Agent or any
Lender.
10. Amendment; Ratification; No Waiver. The Credit
Agreement and the other Loan Documents to which any Borrower is a
party are hereby amended in all other respects to give effect to
the foregoing amendments and agreements and, as so amended, shall
remain in full force and effect and shall continue to constitute
the valid and binding obligations of the Borrowers enforceable in
accordance with their respective terms. This Amendment shall not
be deemed to consitute or shall not be construed as a waiver of
any rights, remedies, collateral or other security of or granted
to the Bank under the foregoing or of any Event of Default or
other default or breach which has occurred and is continuing
thereunder as of the date hereof.
11. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall be deemed an original
hereof and all of which together shall constitute one and the
same document.
IN WITNESS WHEREOF, the Borrowers, the Agent and the Lenders
have caused their respective officers, thereunto duly authorized,
to execute this Amendment as of the date first above written.
BORROWERS:
CONTINENTAL WASTE INDUSTRIES, INC.
By: /s/ Jeffrey E. Levine
Senior Vice President
BARKER BROTHERS, INC.
By: /s/ Jeffrey E. Levine
Vice President
