SHARE AND OPTION REPURCHASE AGREEMENT
This Share Repurchase Agreement has been made on February 18, 1997 (the
"date hereof") among: WMX Technologies, Inc. ("WMX"); WMI Urban Services, Inc.
("WMUS"); and ServiceMaster Limited Partnership ("ServiceMaster") and
ServiceMaster Management Corporation.
Background
A. ServiceMaster is a limited partnership whose limited partner shares are
publicly traded on the New York Stock Exchange.
B. WMUS owns 27,160,715 outstanding shares of limited partnership interest
in ServiceMaster (the "WM Shares") and also owns an option to purchase an
additional 1,875,000 ServiceMaster shares under the terms of an Option Agreement
with ServiceMaster dated December 31, 1995 (the "WM Option"). The WM Shares and
the WM Option are sometimes referred to collectively herein as the "WM
Ownership Interest".
C. WMX and WMUS have requested that ServiceMaster repurchase the WM Shares
and the WM Option and ServiceMaster has agreed to do so on the terms prescribed
in this Agreement.
Agreement
The parties hereby agree as follows:
1. Agreement to Sell.
1.1 WMUS hereby agrees to sell the WM Shares and the WM Option to
ServiceMaster on the terms specified in this Agreement.
1.2 WMX hereby warrants to ServiceMaster that:
(a) WMUS owns all 27,160,715 WM Shares outstanding on the date hereof and
the WM Option free of any adverse interest of any kind and has the right and
power to convey the WM Shares and the WM Option to ServiceMaster on the terms
prescribed by this Agreement free of any adverse interest.
(b) WMX owns all of the outstanding capital stock issued by WMUS and no
other person has the right to acquire any ownership interest in WMUS.
(c) WMUS' execution, delivery and performance of this Agreement has been
duly
authorized by WMUS' Board of Directors and by WMX in WMX's capacity as the
owner of all of WMUS's outstanding capital stock. No other approval of any
kind is required of WMX or WMUS in order to provide WMUS with the right and
power to execute, deliver and perform this Agreement. This Agreement has
been duly executed and delivered by WMUS and is binding upon WMUS in
accordance with its terms.
(d) WMX' execution, delivery and performance of this Agreement has been
duly authorized by WMX's Board of Directors. No other approval of any kind
is required of WMX or WMUS in order to provide WMX with the right and power
to execute, deliver and perform this Agreement. This Agreement has been
duly executed and delivered by WMX and is binding upon WMX in accordance
with its terms.
(e) The execution, delivery and performance of this Agreement by WMUS and
WMX will not breach any agreement or obligation to which WMX, WMUS or any
other WMX affiliate is a party or by which it is bound.
1.3 Self Reliance
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(a) WMX and WMUS hereby acknowledge that WMX has had a long
relationship with ServiceMaster and is familiar with
ServiceMaster's situation and affairs. In reliance upon the
warranty in 1.3(b) below, (i) WMX and WMUS hereby acknowledge and
agree that they have previously taken all actions and made all
inquiries which they deem necessary to understand the value of
the ServiceMaster Ownership Interest and (ii) hereby release
ServiceMaster and all of ServiceMaster's affiliates from any
obligation ServiceMaster or any of its affiliates might otherwise
have had to disclose information (including material information)
relevant to the value of the WM Ownership Interest, the sale of
the WM Ownership Interest pursuant to this Agreement, or any
other right or obligation arising under or by reason of this
Agreement.
(b) ServiceMaster warrants that none of ServiceMaster's senior
executive officers (meaning ServiceMaster's Chairman, President
and Chief Executive Officer, Chief Financial Officer and General
Counsel) is aware of any materially favorable undisclosed
information affecting ServiceMaster. For purposes of this
warranty, information shall be deemed to have been disclosed if,
prior to the execution of this Agreement, such information was
disclosed to the Board of Directors or the Executive Committee of
ServiceMaster Management Corporation or was otherwise disclosed
in writing to a senior officer of WMX or was publicly disclosed
by
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ServiceMaster. Information not included in this warranty is the
outcome of the pending tender offer for the stock of Barefoot
Inc. or the announcement of the transactions contemplated by this
Agreement. This warranty shall survive the closing.
2. Agreement To Purchase.
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2.1 ServiceMaster hereby agrees to purchase the WM Shares and the WM
Option at the price and on the other terms specified in this Agreement.
2.2 ServiceMaster and ServiceMaster Management Corporation hereby warrant
to WMX and WMUS that:
(a) ServiceMaster Management Corporation is ServiceMaster's Managing
General Partner and has the authority to execute and deliver this Agreement
on behalf of ServiceMaster and to cause ServiceMaster to repurchase the WM
Shares and the WM Option and perform all other obligations arising under or
by reason of this Agreement.
(b) ServiceMaster's execution, delivery and performance of this Agreement
has been duly authorized by the Board of Directors of ServiceMaster
Management Corporation. No other approval of any kind is required in order
to provide ServiceMaster with the right and power to execute, deliver and
perform this Agreement. This Agreement has been duly executed and delivered
by ServiceMaster Management Corporation in its capacity as ServiceMaster's
Managing General Partner and is binding upon ServiceMaster in accordance
with its terms.
(c) The execution, delivery and performance of this Agreement by
ServiceMaster will not breach any agreement or obligation to which
ServiceMaster or any other ServiceMaster affiliate is a party or by which
it is bound except that it will be necessary to obtain waivers or
amendments of covenants under financing agreements to which ServiceMaster
and its affiliates are parties.
3. Purchase Price.
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3.1 The purchase price for the WM Shares and the WM Option shall be
$625,978,141. ServiceMaster shall pay the purchase price to WMUS on the closing
date in the manner prescribed in part 4.
4. Closing.
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4.1 Unless the closing date is extended by ServiceMaster as provided in
section 4.2, the purchase and sale of the WM Shares and the WM Option shall
consummate on April 1, 1997
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(the "closing date") at 10 AM Chicago time in the Chicago offices of Xxxxxxxx &
Xxxxx. The actions necessary to accomplish such consummation are herein
collectively called the closing. Upon consummation of the closing, and if the
closing occurs on or before April 14, 1997, ServiceMaster shall not allocate any
item of income, gain, loss, deduction or credit for tax purposes to WMUS,
regardless of when WMUS ceases to be a record holder of the ServiceMaster
Shares.
4.2 ServiceMaster may, at its election, extend the closing date to a date
not later than April 14, 1997 for the purpose of attempting to complete the
actions described in the first sentence of section 5.3. If ServiceMaster elects
to extend the closing date pursuant to this section 4.2, ServiceMaster will: (a)
give WMX written notice of such election by not later than March 25, 1997 and
(b) unless this Agreement is terminated as provided in section 5.3, pay WMX at
the closing, in addition to the payment of the purchase price, an amount equal
to the purchase price multiplied by the number of days in April 1997 preceding
the closing date and multiplied by the fraction 0.06/365.
4.3 At the closing, WMUS shall deliver to ServiceMaster: (i) one or more
certificates representing the WM Shares together with executed conveyance
instruments executed by WMUS in customary form for the transfer of corporate
shares and which will be sufficient to convey to ServiceMaster upon delivery
ownership of the WM Shares free of any adverse interest and (ii) a duly executed
assignment of the WM Option.
4.4 At the closing, ServiceMaster shall cause the purchase price to be
transmitted in immediately available funds by wire to WMUS at such account as
WMUS shall reasonably designate. The amount payable by ServiceMaster under the
preceding sentence shall constitute full payment for the WM Shares and for the
WM Option.
4.5 At the closing, if the person who is then WMX's representative on the
Board of Directors of ServiceMaster Management Corporation is Xxxxxxx X. Xxxxxx,
he shall not be required to resign and Xx. Xxxxxx shall remain a director of
ServiceMaster Management Corporation for his full elected term. If any other
person is WMX's representative on the Board of Directors of ServiceMaster
Management Corporation, such person shall resign at the closing.
4.6 Each party shall furnish to the other at and after the closing such
additional instruments as the other party may reasonably request to evidence or
accomplish any of the actions prescribed by this Agreement.
5. Related Agreements
------------------
5.1 WMX hereby commits to cause WMUS to perform every obligation of WMUS
arising under or by reason of this agreement and hereby unconditionally and
irrevocably commits to ServiceMaster that WMUS will completely perform such
obligations.
5.2 The Business Development Agreement made as of December 31, 1995
between WMX and ServiceMaster shall continue in full force and effect and shall
not be affected or
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impaired to any extent by the consummation of the purchase and sale contemplated
by this Agreement. WMX hereby acknowledges that ServiceMaster shall not in the
future be required to provide services under the Business Development Agreement
at a level beyond the services provided prior to 1997 under that Agreement which
WMX hereby acknowledges to be sufficient and satisfactory in every respect. WMX
hereby irrevocably agrees to made every payment specified in the Business
Development Agreement at the time specified in the Business Development
Agreement and hereby waives any present or future fact or circumstance which
might otherwise excuse WMX from making any such payment in full and at the time
so specified.
5.3 ServiceMaster agrees to use its diligent efforts to attempt to secure
promptly financing for the purchase contemplated hereby and any necessary
waivers and amendments that may be required for such purchase and related
financing under its existing credit facilities and agreements. If
ServiceMaster's Board shall conclude in its reasonable business judgment that
such financing waivers and amendments are not available to ServiceMaster or are
available to ServiceMaster on terms which the Board in its reasonable business
judgment concludes are materially adverse to ServiceMaster to warrant not going
forward with the purchase specified in this Agreement, then ServiceMaster shall
have the right to terminate this Agreement at any time prior to April 14, 1997
by providing written notice of such termination to WMX given by the close of
business on the second business day preceding the then applicable closing date.
If ServiceMaster shall provide such a notice of termination, then this Agreement
shall be deemed terminated and abandoned by both parties and no person shall
thereafter have any right or obligation under or by reason of this Agreement.
Annex A is hereby incorporated by reference.
5.4 The WM Option shall be canceled upon consummation of the purchase and
sale of the WM Shares and the WM Option and after such consummation neither WMX
nor any other person shall have any right to exercise the WM Option or any other
right under or by reason of the option agreement dated December 31, 1995.
6. Interpretation of This Agreement
--------------------------------
6.1 Additional Definitions. Each of the following terms has the meaning it
is given below whenever it is used in this agreement:
Affiliate. A person shall be deemed an "affiliate" of any other
person if such person shall, directly or through any number of
intermediaries, (a) control such other person, (b) be controlled by
such other person, or (c) be controlled by the same person(s) who
shall ultimately control such other person. For purposes of the
preceding sentence a particular person shall be deemed to control
another person if (i) the particular person is the director or
indirect owner of a majority of the ownership interest in the other
person or (ii) the particular person has the power (directly or
indirectly) to appoint or elect (either at one time or over time)
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(A) a majority of the members of the board of directors of the other
person or (B) the person or body having equivalent authority over the
other person. Notwithstanding the preceding provisions, non of an
organization's directors or employees shall be deemed an affiliate of
that organization for purposes of this Agreement. No ERISA Plan shall
be deemed to be an affiliate of WMX for purposes of this Agreement.
6.2 Severability. To the extent permitted by applicable law, each party
hereby waives any provision of any law or other governmental requirement which
would otherwise render any provision of this Agreement prohibited or
unenforceable in any respect. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be valid and enforceable
under applicable law, but if any provision of this Agreement shall be held to be
prohibited by or unenforceable under applicable law. (i) such provision shall be
applied to accomplish the objectives of the provision as originally written to
the fullest extent permitted by law and (ii) all other provisions of this
Agreement shall remain in full force and effect.
6.3 Complete Agreement. This document contains the complete agreement
between the parties relating in any way to the subject matter of this document
and supersedes any prior understandings, agreements or representations by or
among the parties, written or oral which may have related to such subject matter
in any way.
6.4 No Oral Commitments. No amendment, waiver, modification or termination
of this Agreement shall be effective or enforceable unless it is set forth in
writing and signed by the party against whom it is sought to be enforced. No
party hereto shall have the right to rely upon or enforce any representation,
warranty or agreement shall be set forth in a writing which shall have been
signed by the person to be held responsible for such representation, warranty or
agreement. No delay or omission in exercising any right hereunder shall
operate as a waiver of such right or of any other right. A waiver upon any one
occasion shall not be construed as a bar or waiver of any right or remedy on any
future occasion. All of the rights and remedies of the parties hereto whether
evidenced hereby or by any other agreement, instrument or paper or whether
granted by law, shall be cumulative and may be exercised singly or concurrently.
6.5 No Strict Construction. No rule of strict construction, rule resolving
ambiguities aganist the person who drafted the provision giving rise to such
ambiguities, or other such rule of interpretation shall be applied against
any party with respect to this Agreement.
6.6 Captions. The captions used in this agreement are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit, characterize or affect in any way of the provisions of this Agreement,
and all of the provisions of this Agreement shall be
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enforced and construed as if no captions had been used in this Agreement.
6.7 Counterparts. This Agreement shall become effective when at least one
copy of this Agreement shall have been signed by ServiceMaster and delivered to
WMX and at least one copy of this Agreement shall have been signed by WMX and
delivered to ServiceMaster. A particular party's signature on a copy of this
Agreement in the possession of any other unaffiliated party shall constitute an
acknowledgment by that particular party that the particular party has received
one or more copies of this agreement bearing the signatures of all other
parties. Two or more duplicate originals of this agreement may be signed by
the parties, and in such a case, each duplicate copy shall be deemed an original
but all of the copies together shall be deemed to constitute one and the same
agreement.
6.8. No Implied limitation. The word "including" whenever it is used in
this Agreement shall be interpreted to mean "including but not limited to". No
provision in this Agreement shall be construed to limit by implication the scope
otherwise indicated by any other provision in this Agreement.
6.9 Miscellaneous Interpretive Rules. Whenever the context may require,
any pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa. Words such as "herein," "hereinafter,"
"hereof," "hereby," and "hereunder" shall, unless the context otherwise
requires, be construed to refer to this Agreement. Except as otherwise explicity
indicated, each reference to number of letter or a combination thereof used to
identify a portion of this Agreement shall be construed to refer to this
Agreement. Except as otherwise explicity indicated, each reference to number or
letter or a combination thereof used to identify a portion of this Agreement
shall be construed to refer to all provisions in this Agreement marked by such
number, letter or combination or by an identifier which begins with such number,
letter or combination.
6.10 No Circumvention.
(a) No affiliate of either party shall take any action which that
party is prohibited from taking under the terms of this
Agreement.
(b) No person shall be permitted to do indirectly by means of any
transaction or series of transactions, scheme, artifice, device
or contrivance, no matter how structured or labeled, anything
which such person may not do directly under this Agreement.
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7. Miscellaneous.
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7.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than Delaware.
7.2 Assignment. Except as otherwise provided herein, each party shall be
entitled to assign its rights under this Agreement to any other person but such
assignment shall not release the assignor of its obligation under this
Agreement (whether arising prior to or after such assignment). This Agreement
shall inure to the benefit of and be binding upon the successors in interest to
each party to this Agreement.
7.3 Consideration. Each of the parties hereby (i) acknowledges and
warrants to the other parties that such party intends and agrees to be bound by
every obligation which this Agreement purports to place upon such party and (ii)
covenants that such party will never assert (whether as a defense against any
injunction sought against it, as a defense to any claim brought against it or
otherwise) that any provision in this Agreement is not enforceable against such
party in accordance with its terms or that any provision in this Agreement is
not legal, valid, or binding in whole or in part.
7.4 Remedies.
(a) WMX hereby agrees that in the event WMX or any of its affiliates
fails to comply with any provision in this Agreement which by its
terms applies to WMX or any of its affiliates then: (i) money
damages and any other remedies which might be available to
ServiceMaster at law would be inadequate and (ii) ServiceMaster
shall be entitled to specific enforcement of such provision and
to injunctive relief to prevent any prospective violation of this
Agreement, and (iii) ServiceMaster shall not be required to post
any bond or other security in connection with any such specified
performance or other injunctive relief.
(b) ServiceMaster hereby agrees that in the event ServiceMaster or
any of its affiliates fails to comply with any provision in this
Agreement which by its terms applies to ServiceMaster or any of
its affiliates then: (i) money damages and any other remedies
which might be available to WMX at law would be inadequate and
(ii) WMX shall be entitled to specific enforcement of such
provision and to injunctive relief to prevent any prospective
violation of the Agreement, and (iii)
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WMX shall not be required to post any bond or other security in
connection with any such specified performance or other
injunctive relief.
(c) Each party to this agreement shall reimburse the other party for
all reasonable attorneys' fees and other costs which the other
party shall reasonably incur to enforce the other party's rights
under this Agreement.
7.5 Amendment of the Relationship Agreement. Effective automatically on
the consummation of the closing, Section 11.2(b) of the Relationship Agreement
between WMX, WMUS and ServiceMaster dated December 31, 1995 is hereby deleted.
7.6 Cross Indemnification on Commissions and Fees. Each party agrees to
indemnify and hold the other party harmless from and against any commissions,
finders fees, brokerage fees or the like which are based upon the transactions
contemplated by this Agreement and which are asserted against the indemnified
party on the basis of actions taken by the indemnifying party.
8. Effective Date.
8.1 This Agreement shall be effective on February 18, 1997.
* * * * *
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ANNEX A
In connection with ServiceMaster's right to terminate this Agreement under
Section 5.3, ServiceMaster commits to WMX to give WMX progress reports beginning
March 25, 1997 on the status of ServiceMaster's efforts as set forth in the
first sentence of Section 5.3 and if ServiceMaster should decide to terminate
this Agreement pursuant to Section 5.3, ServiceMaster will give WMX immediate
written notice of such decision.
Each party has executed this document at the place provided below in order
to evidence such party's agreement to be bound by all of its terms.
WMX TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
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Title: Senior Vice President
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WMI URBAN SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------
Name: X. X. Xxxx
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Title: Vice President
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SERVICEMASTER LIMITED PARTNERSHIP
By: ServiceMaster Management Corporation
As Managing General Partner
By: /s/ C. Xxxxxxx Xxxxxxx
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Name: C. Xxxxxxx Xxxxxxx
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Title: Chairman
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SERVICEMASTER MANAGEMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Senior Vice President
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SERVICEMASTER INCORPORATED OF DELAWARE
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
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Title: Vice President
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