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) DECEMBER 5, 1996
ALLIED WASTE INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-19285 88-0228636
(Commission File Number) (IRS Employer Identification No.)
7201 EAST CAMELBACK ROAD, SUITE 375
SCOTTSDALE, ARIZONA 85251
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (602) 423-2946
NOT APPLICABLE
(Former name or former address, if changed since last report)
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Item 5. Other Events
On December 5, 1996, Allied Waste North America, Inc. ("Allied North
America"), a wholly-owned subsidiary of Allied Waste Industries, Inc.
("Allied"), completed the private offering (the "Offering") of $525 million
principal amount of its 10.25% Senior Subordinated Notes due 2006 (the
"Notes") for consideration of $525 million. The net proceeds (the "Proceeds")
of the Offering were deposited into a Collateral Account with First Bank N.A.
acting as trustee pursuant to a Collateral Agreement. The Proceeds will be
released to Allied North America if certain conditions are met on or before
March 5, 1997. Such conditions include, among other things, (i) the closing
of the proposed acquisition of the solid waste business of Laidlaw Inc. (the
"Acquisition") by Allied North America and (ii) the closing of a new bank
credit facility (the "New Bank Facility") by Allied North America. Upon
release of the Proceeds to Allied North America, the Proceeds, together with
certain borrowings under the New Bank Facility, will be used to finance the
Acquisition.
The Offering was privately made by Goldman, Sachs & Co., Citicorp Securities,
Inc., CS First Boston Corporation, and Jefferies and Company, Inc. to (i) U.S.
qualified institutional buyers, as that term is used in Rule 144A under the
Securities Act of 1933 (the "Securities Act"), (ii) U.S. accredited investors,
as that term is used in Regulation D under the Securities Act, and (iii)
persons outside the United States, as that term is used in Regulation S under
the Securities Act.
Allied North America also entered into an Exchange and Registration Rights
Agreement with the holders of the Notes in which Allied North America agrees,
among other things, that, within 60 days of the release of the Proceeds from
the Collateral Account, it will file with the Securities and Exchange
Commission a registration statement under the Securities Act that registers an
exchange offer (the "Exchange Offer") by Allied North America that covers all
the outstanding Notes. The Exchange Offer will provide that Allied will
exchange the Notes for senior subordinated notes with substantially identical
terms that will have been registered under the Securities Act.
Item 7. Exhibits
2.1 Note Purchase Agreement
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant, Allied Waste Industries, Inc., has caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
ALLIED WASTE INDUSTRIES, INC.
By: /s/PETER S. HATHAWAY
Peter S. Hathaway
Vice President, Treasurer and
Chief Accounting Officer
(Principal Accounting Officer)
Date: December 20, 1996
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Allied Waste North America, Inc.
10.25% Senior Subordinated Notes due 2006
unconditionally guaranteed as to
the payment of principal, premium, if any,
and interest by
Allied Waste Industries, Inc.,
Allied Waste Holdings (Canada) Ltd.
and the other Guarantors named herein
Purchase Agreement
November 25, 1996
Goldman, Sachs & Co.,
Citicorp Securities, Inc.
CS First Boston Corporation
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Allied Waste North America, Inc., a Delaware corporation (formerly known
as Allied Holding (United States), Inc., a Delaware corporation) (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Purchasers named in Schedule I hereto (the "Purchasers")
an aggregate of $525,000,000 principal amount of the 10.25% Senior
Subordinated Notes due 2006 specified above (the "Notes"). The Notes will be
unconditionally guaranteed on a senior subordinated basis as to the payment of
principal, premium, if any, and interest, jointly and severally, by Allied
Waste Industries, Inc., a Delaware corporation ("Allied Parent", and such
guarantee by Allied Parent, the "Parent Guarantee"), by Allied Waste Holdings
(Canada) Ltd., a Canadian corporation ("Allied Canada"), and by each of the
other subsidiaries of the Company that are named in Schedule II hereto (Allied
Canada and such other subsidiaries together the "Subsidiary Guarantors" and
such guarantees by the Subsidiary Guarantors, the "Subsidiary Guarantees"). As
used herein, the term "Guarantors" shall mean Allied Parent together with the
Subsidiary Guarantors, and the term "Guarantees" shall mean the Parent
Guarantee, together with the Subsidiary Guarantees. Upon the occurrence of
the Acquisition Closing (as defined herein) Allied Parent's obligations under
the Parent Guarantee will be further guaranteed (the "Allied Finance
Guarantee") by Allied Waste Finance (Canada) Ltd., a Canadian corporation
("Allied Finance"), and the Allied Finance Guarantee will be secured on a
senior subordinated basis by substantially all of the properties and assets of
Allied Finance. The Notes and the Guarantees are hereinafter collectively
called the "Securities". Concurrently with the issuance of the Notes, the
Company will enter into a Senior Subordinated Collateral Agreement (the
"Collateral Agreement"), dated as of the Time of Delivery (as defined below),
with the Trustee (as defined below). Allied Parent, the Company and Allied
Canada have entered into a Stock Purchase Agreement, dated as of September 17,
1996 (the "Stock Purchase Agreement"), with the Laidlaw Parties (as defined in
the Stock Purchase Agreement), pursuant to which the Company and Allied Canada
will acquire (the "Acquisition") the Acquired Subsidiaries (as defined in the
Stock Purchase Agreement) from the Laidlaw Sellers (as defined in the Stock
Purchase Agreement). The Stock Purchase Agreement, together with each of the
other agreements referred to in the Stock Purchase Agreement, are collectively
referred to herein as the "Acquisition Documents". As used herein, the term
"Subsidiaries" shall mean (i) on the date hereof, the direct and indirect
subsidiaries of Allied Parent, excluding the Company, and (ii) at the Time of
Delivery, the direct and indirect subsidiaries of the Company (which term
shall be deemed to include the Acquired Subsidiaries from and after, and after
giving effect to, the Acquisition). Capitalized terms used, but not defined
herein shall have the meanings attributed to them in the Stock Purchase
Agreement.
1. Each of the Company, Allied Finance and the Guarantors, jointly and
severally, represents and warrants to, and agrees with, each of the Purchasers
(such representations, warranties and agreements made with respect to any of
the Laidlaw Parties or the Acquired Subsidiaries, being made to the Company's,
Allied Finance's and each of the Guarantors' best knowledge) that:
(a) A preliminary offering circular, dated November 5, 1996 (the
"Preliminary Offering Circular") and an offering circular, dated November
25, 1996 (the "Offering Circular") have been prepared in connection with
the offering of the Securities. Any reference to the Preliminary Offering
Circular or the Offering Circular shall be deemed to refer to and include
the international supplement thereto. The Exchange Act Reports (as defined
below), when they were or are filed with the Commission, conformed or will
conform in all material respects to the applicable requirements of the
Exchange Act and the applicable rules and regulations of the Commission
thereunder. The Preliminary Offering Circular, the Offering Circular and
any amendments or supplements thereto did not and will not, as of their
respective dates, and the Exchange Act Reports did not and will not, as of
their respective filing dates, contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by a Purchaser through Goldman, Sachs & Co. expressly for use therein.
"Exchange Act Reports" means Allied Parent's Annual Report on Form 10-K for
its most recently ended fiscal year and all subsequent documents filed by
Allied Parent with the United States Securities and Exchange Commission
(the "Commission") pursuant to Section 13(a), 13(c) or 15(d) of the United
States Securities Exchange Act of 1934, as amended (the "Exchange Act");
(b) Other than as set forth in the Offering Circular, none of
the Company, Allied Finance, the Guarantors or the Acquired Subsidiaries
has sustained since September 30, 1996 any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, in each case which would have a
material adverse effect on the condition (financial or other), business,
properties, prospects, net worth or results of operations of the Company,
Allied Finance and the Subsidiaries, taken as a whole (a "Material Adverse
Effect"), either before or after giving effect to the Acquisition; and,
since the respective dates as of which information is given in the Offering
Circular and otherwise than as set forth or contemplated in the Offering
Circular, there has not been any change in the consolidated capital stock
or long-term debt of the Company, Allied Finance, the Guarantors or the
Acquired Subsidiaries, any change having a Material Adverse Effect or any
development involving a prospective change reasonably likely to result in a
Material Adverse Effect, in each case either before or after giving effect
to the Acquisition;
(c) The Company, Allied Finance and the Guarantors have, and,
after giving effect to the Acquisition, the Company, Allied Finance, the
Guarantors and the Acquired Subsidiaries will have, good and indefeasible
title to all real property and good and indefeasible title to all personal
property owned by them, in each case free of all liens, encumbrances and
defects except such as are described in the Offering Circular or would not
have a Material Adverse Effect, either before or after giving effect to the
Acquisition, and do not interfere with the use made and proposed to be made
of such property by the Company, Allied Finance, the Guarantors and the
Acquired Subsidiaries; and any real property and buildings held under lease
by the Company, Allied Finance and the Guarantors and any real property and
buildings to be held under lease by the Company, Allied Finance, the
Guarantors and the Acquired Subsidiaries after giving effect to the
Acquisition are held, and will be held, by them under valid and enforceable
leases with such exceptions as are not material and do not interfere with
the use made and proposed to be made of such property and buildings by the
Company, the Guarantors and the Acquired Subsidiaries;
(d) Each of the Company, Allied Finance, the Guarantors and the
Acquired Subsidiaries has been duly incorporated and is validly existing,
and, after giving effect to the Acquisition, will be validly existing, as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering Circular,
and has been duly qualified as a foreign corporation for the transaction of
business and is in good standing, and, after giving effect to the
Acquisition, will be in good standing, under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business
so as to require such qualification, except where the failure to be so
qualified in any such jurisdiction would not have a Material Adverse
Effect;
(e) The Company and Allied Parent have an authorized
capitalization as set forth in the Offering Circular, and all of the issued
shares of capital stock of the Company and Allied Parent have been duly and
validly authorized and issued and are fully paid and non-assessable; and
all of the issued shares of capital stock of each Subsidiary have been duly
and validly authorized and issued, are fully paid and non-assessable; all
of the issued shares of capital stock of the Company and of each
Subsidiary, are owned directly or indirectly by Allied Parent, free of all
liens, encumbrances, equities or claims, except as otherwise disclosed in
the Offering Circular and for two liens which do not have a Material
Adverse Effect, either before or after giving effect to the Acquisition; at
the Time of Delivery (as defined herein), (i) all of the issued shares of
capital stock of the Company will be owned directly by Allied Parent, (ii)
all of the issued shares of capital stock of each Subsidiary (with the
exception of Allied Finance) will be owned directly or indirectly by the
Company and (iii) all of the issued shares of capital stock of Allied
Finance will be owned directly by Allied Parent, in each case free of
liens, encumbrances, equities or claims except as otherwise disclosed in
the Offering Circular and, in the case of (ii) above, for two liens which
do not have a Material Adverse Effect either before or after giving effect
to the Acquisition; and, on the date of the Indenture (as defined below),
Allied Canada and each other Subsidiary of the Company will be a
"Restricted Subsidiary" within the meaning of the Indenture;
(f) The Notes have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered by the Company and will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the indenture to be dated as of December 1, 1996 (the
"Indenture") among the Company, the Guarantors and First Bank National
Association, as trustee (the "Trustee"), under which they are to be issued,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
fraudulent conveyance or other similar laws relating to the enforcement of
creditors' rights and general principles of equity (regardless of whether
such enforceability is considered in a proceeding in law or at equity),
which will be substantially in the form previously delivered to you; the
Guarantees have been duly authorized and, when the Notes have been issued
and delivered pursuant to this Agreement with the Guarantees endorsed
thereon, will have been duly executed, issued and delivered and will
constitute valid and legally binding joint and several obligations of each
of the Guarantors entitled to the benefits provided by the Indenture,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
fraudulent conveyance or other similar laws relating to the enforcement of
creditors' rights and general principles of equity (regardless of whether
such enforceability is considered in a proceeding in law or at equity); the
Indenture has been duly authorized and, when executed and delivered by the
Company, Allied Finance, the Guarantors and the Trustee, the Indenture will
constitute a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, fraudulent conveyance or other similar laws
relating to the enforcement of creditors' rights and general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in law or at equity); the Indenture, when executed and delivered
by the Company, the Guarantors and the Trustee, will be in a form which
meets the requirements for qualification under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"); and the Securities and the
Indenture will conform in all material respects to the descriptions thereof
in the Offering Circular and will be in substantially the form of the draft
of November 25, 1996;
(g) The Exchange and Registration Rights Agreement among the
Company, Allied Parent and the Purchasers to be dated as of December 5,
1996 (the "Registration Rights Agreement"), which shall be substantially in
the form of the draft of November 25, 1996, has been duly authorized, and,
when executed and delivered by the Company and Allied Parent (assuming due
authorization, execution and delivery by the Purchasers), will constitute a
valid and legally binding agreement of the Company and Allied Parent
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, fraudulent conveyance or other similar
laws relating to the enforcement of creditors' rights and general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in law or at equity), and will conform in all
material respects to the description thereof in the Offering Circular;
(h) The senior credit facility (the "Senior Credit Facility")
established pursuant to the Commitment Letter (as defined in the Stock
Purchase Agreement) has been duly and validly authorized by the Company,
Allied Finance and the Guarantors and, when duly executed and delivered by
the Company, Allied Finance and the Guarantors, will be a valid and legally
binding obligation of the Company, Allied Finance and the Guarantors,
enforceable against the Company, Allied Finance and the Guarantors in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, fraudulent conveyance or other similar laws
relating to the enforcement of creditors' rights and general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in law or at equity), and will conform in all material respects
to the description thereof in the Offering Circular;
(i) The Stock Purchase Agreement has been duly and validly
authorized, executed and delivered by Allied Parent, the Company, the
Guarantors and the Laidlaw Parties party thereto and constitutes a valid
and legally binding obligation of Allied Parent, the Company, the
Guarantors and the Laidlaw Parties party thereto, enforceable against
Allied Parent, the Company, the Guarantors and the Laidlaw Parties party
thereto in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditor's rights and to general
principles of equity; and the Stock Purchase Agreement conforms in all
material respects to the description thereof in the Offering Circular;
(j) Each of the other Acquisition Documents has been duly and
validly authorized by the parties thereto and, when duly executed and
delivered by the parties thereto, will be a valid and legally binding
obligation of the parties thereto, enforceable against the parties thereto
in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, fraudulent conveyance or other similar laws
relating to the enforcement of creditors' rights and general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in law or at equity); and each of the other Acquisition
Documents conforms in all material respects to the description thereof in
the Offering Circular;
(k) The Collateral Agreement, which shall be substantially in
the form of the draft of November 25, 1996 has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, moratorium, fraudulent
conveyance or other similar laws relating to the enforcement of creditors'
rights and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in law or at equity); the
Collateral (as defined in the Collateral Agreement) has not been pledged to
any person other than the Trustee;
(l) Each of the Allied Canada Debentures has been duly
authorized and, when issued and delivered upon the closing of the
Acquisition (the "Acquisition Closing"), will have been duly authorized,
executed, issued and delivered and will constitute a valid and legally
binding obligation of Allied Canada, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, moratorium,
fraudulent conveyance or other similar laws relating to the enforcement of
creditors' rights and general principles of equity (regardless of whether
such enforceability is considered in a proceeding in law or at equity); and
each of the Allied Canada Debentures will conform to the forms attached as
Exhibits A-1 and A-2 of the Stock Purchase Agreement, as the case may be;
(m) Each of the Allied Finance Debentures has been duly
authorized and, when issued and delivered in accordance with the Debenture
Exchange Agreement, will have been duly authorized, executed, issued and
delivered and will constitute a valid and legally binding obligation of
Allied Finance, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, fraudulent conveyance
or other similar laws relating to the enforcement of creditors' rights and
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in law or at equity); and each of the Allied
Finance Debentures will conform to the forms attached as Exhibits B-1 and
B-2 of the Stock Purchase Agreement, as the case may be;
(n) The Debenture Exchange Agreement to be entered into between
Allied Finance and Laidlaw at the Acquisition Closing in the form set forth
as Exhibit M to the Stock Purchase Agreement has been duly authorized and,
when executed and delivered upon the Acquisition Closing, will have been
duly authorized, executed and delivered and will constitute a valid and
legally binding obligation of Allied Finance and Laidlaw, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, fraudulent conveyance or other similar laws
relating to the enforcement of creditors' rights and general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in law or at equity);
(o) The Pledge Agreement to be entered into between Allied
Finance and the Trustee (the "Pledge Agreement" and, together with the
Debenture Exchange Agreement, the "Allied Finance Guarantee Documents") has
been duly authorized and, when executed and delivered upon the Acquisition
Closing, will have been duly authorized, executed and delivered, will
constitute a valid and legally binding obligation of Allied Finance,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, fraudulent conveyance or other similar
laws relating to the enforcement of creditors' rights and general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in law or at equity), and will conform in all
material respects to the description thereof in the Offering Circular;
(p) Upon the consummation of the transactions contemplated by
the Debenture Exchange Agreement simultaneously with the Acquisition
Closing, each of the Allied Canada Debentures will be owned solely by
Allied Finance, and no liens, encumbrances, equities or claims will exist
upon the Allied Canada Debentures (and no right or option to acquire the
same will exist in favor of any other person or entity), except for the
lien and security interest for the benefit of the holders of the Debt (as
defined in the Indenture) issued under the Senior Credit Facility and the
lien and security interest in favor of the Trustee for the benefit of the
Holders of the Securities to be created pursuant to the Pledge Agreement,
which lien and security interest in favor of the Trustee will constitute a
valid, continuing, second priority perfected lien and security interest in
and to all of the Allied Canada Debentures; and the Allied Finance
Guarantee Documents will conform in all material respects to the
descriptions thereof in the Offering Circular;
(q) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations G, T, U, and X of the Board of Governors of the
Federal Reserve System;
(r) Prior to the date hereof, none of the Company, Allied
Finance, the Guarantors or their affiliates has taken any action which is
designed to or which has constituted or which might have been expected to
cause or result in stabilization or manipulation of the price of any
security of the Company in connection with the offering of the Securities;
(s) The issue and sale of the Securities, the issue of the
Allied Canada Debentures and the Allied Finance Debentures, the execution
and delivery of this Agreement, the Indenture, the Securities, the Allied
Canada Debentures, the Allied Finance Debentures, the Registration Rights
Agreement, the Senior Credit Facility, the Acquisition Documents, the
Allied Finance Guarantee Documents and the Collateral Agreement
(collectively, the "Note Transaction Documents"), and the compliance by the
Company, Allied Finance, the Guarantors, the Laidlaw Parties and the
Acquired Subsidiaries with all of the provisions of the Securities, the
Allied Canada Debentures, the Allied Finance Debentures, this Agreement and
the other Note Transaction Documents and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a material breach or violation of any of the terms or provisions
of, or constitute a default in the performance or observation of or under,
any indenture, mortgage, deed of trust, sale/leaseback agreement, loan
agreement, lease or other agreement or instrument to which the Company,
Allied Finance, any of the Guarantors, any Laidlaw Party or any Acquired
Subsidiary is a party or by which the Company, Allied Finance, any
Guarantor, any Laidlaw Party or any Acquired Subsidiary is bound or to
which any of the property or assets of the Company, Allied Finance, any
Guarantor, any Laidlaw Party or any Acquired Subsidiary is subject, nor
will such action result in any violation by the Company, Allied Parent,
Allied Finance, Allied Canada, any Identified Guarantor (as defined
herein), any Laidlaw Party or any Acquired Subsidiary (collectively, the
"Covered Entities") of the provisions of the Certificate of Incorporation,
By-laws or other governing instrument, as the case may be, of any Covered
Entity, or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over any Covered Entity or
any of their properties); and nor will such action result in any violation
by Guarantors other than the Covered Entities (collectively, the "Non-
Covered Entities") of the provisions of the Certificate of Incorporation,
By-laws or other governing instrument, as the case may be, of any Non-
Covered Entity, or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over any Non-
Covered Entity or any of their properties, which violation could reasonably
be expected to have a Material Adverse Effect, either before or after
giving effect to the Acquisition; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Company, Allied Finance, the
Guarantors, the Acquired Subsidiaries or the Laidlaw Parties of the
transactions contemplated by this Agreement or the other Note Transaction
Documents, except for the filing of a registration statement by the
Company, Allied Finance, and the Guarantors with the Commission pursuant to
the United States Securities Act of 1933, as amended (the "Act") pursuant
to the Registration Rights Agreement and Section 5(l) hereof, the filing of
a notice on Form D by the Company with the Commission pursuant to
Section 5(h) hereof and such consents, approvals, authorizations,
registrations, notification or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Purchasers and those consents,
approvals, authorizations, orders, registrations or qualifications referred
to in the Stock Purchase Agreement or the schedules thereto;
(t) None of the Covered Entities is in violation of its
Certificate of Incorporation, By-laws or other governing instrument, as the
case may be; none of the Non-Covered Entities is in violation of its
Certificate of Incorporation, By-laws or other governing instrument, as the
case may be; and none of the Company, Allied Finance, the Guarantors or the
Acquired Subsidiaries is in default in the performance or observance of any
obligation, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to
which it is a party or by which it or any of its properties may be bound,
which default could reasonably be expected to have a Material Adverse
Effect, either before or after giving effect to the Acquisition;
(u) The statements set forth in the Offering Circular under the
caption "Description of the Notes", insofar as they purport to constitute a
summary of the terms of the Securities, and in the Offering Circular under
the captions "Risk Factors", "Management's Discussion and Analysis of
Financial Condition and Results of Operations", "Business and Properties",
"Certain Federal Income Tax Consequences" and "Offer and Resale", insofar
as they purport to describe the provisions of the laws and documents
referred to therein, provide a fair and complete summary and include all
material terms thereof;
(v) Other than as set forth in the Offering Circular, there are
no legal or governmental proceedings pending to which the Company, Allied
Finance, any Guarantor or any Acquired Subsidiary is a party or of which
any property of the Company, Allied Finance, any Guarantor, or any Acquired
Subsidiary is the subject which, if determined adversely to the Company,
Allied Finance, any Guarantor or any Acquired Subsidiary would individually
or in the aggregate have a Material Adverse Effect, either before or after
giving effect to the Acquisition; and, to the best of the Company's, Allied
Finance's and the Guarantors' knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others;
(w) When the Securities are issued and delivered pursuant to
this Agreement, none of the Securities will be of the same class (within
the meaning of Rule 144A under the Act) as securities which are listed on a
national securities exchange registered under Section 6 of the Exchange Act
or quoted in a U.S. automated inter-dealer quotation system;
(x) Allied Parent is subject to Section 13 or 15(d) of the
Exchange Act;
(y) None of the Company, Allied Finance or the Guarantors is or,
after giving effect to the offering and sale of the Securities and the
Acquisition, none of the Company, Allied Finance, the Guarantors or the
Acquired Subsidiaries will be, an "investment company", or an entity
"controlled" by an "investment company", as such terms are defined in the
United States Investment Company Act of 1940, as amended (the "Investment
Company Act");
(z) Neither the Company, Allied Finance, the Guarantors nor any
person acting on its or their behalf has offered or sold the Securities by
means of any general solicitation or general advertising within the meaning
of Rule 502(c) under the Act or, with respect to Securities sold outside
the United States to non-U.S. persons (as defined in Rule 902 under the
Act), by means of any directed selling efforts within the meaning of
Rule 902 under the Act and each of the Company, Allied Finance, the
Guarantors, any of its and their affiliates and any person acting on behalf
of any of them has complied with and will implement the "offering
restriction" within the meaning of such Rule 902; provided that no
representation or warranty is made pursuant to this paragraph as to any
activities of the Purchasers;
(aa) Within the preceding six months, neither the Company, nor
Allied Finance, nor any Guarantor nor any other person acting on behalf of
any of them has offered or sold to any person any Securities, or any
securities of the same or a similar class as the Securities, other than
Securities offered or sold to the Purchasers hereunder. The Company,
Allied Finance and the Guarantors will take reasonable precautions designed
to insure that any offer or sale, direct or indirect, in the United States
or to any U.S. person (as defined in Rule 902 under the Act) of any
Securities or any substantially similar security issued by the Company or
any of its subsidiaries, within six months subsequent to the date on which
the distribution of the Securities has been completed (as notified to the
Company by Goldman, Sachs & Co.), is made under restrictions and other
circumstances reasonably designed not to affect the status of the offer and
sale of the Securities in the United States and to U.S. persons
contemplated by this Agreement as transactions exempt from the registration
provisions of the Act;
(bb) None of the Company, the Acquired Subsidiaries or their
affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075, Florida
Statutes or has any assets located in Cuba;
(cc) Arthur Andersen LLP, who have certified certain consolidated
financial statements of Allied Parent and its subsidiaries, including the
Company, and Coopers & Lybrand, who have certified certain financial
statements of the Acquired Subsidiaries, are each independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(dd) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, either before or after giving effect to the
Acquisition, (i) each of the Company, Allied Finance, the Guarantors and
the Acquiring Subsidiaries has all certificates, consents, exemptions,
orders, permits, licenses, authorizations, or other approvals (each, an
"Authorization") of and from, and has made all declarations and filings
with, all Federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, necessary
or required to engage in the business currently conducted by it in the
manner described in the Offering Circular, (ii) all such Authorizations are
valid and in full force and effect, and (iii) each of the Company, Allied
Finance, the Guarantors and the Acquired Subsidiaries is in compliance in
all material respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities and governing bodies having jurisdiction with respect thereto;
and
(ee) Except as set forth in the Offering Circular, neither the
Company, nor Allied Finance, nor any of the Guarantors nor the Acquired
Subsidiaries, has violated any applicable existing Federal, State, local or
international laws and regulations relating to protection of human health
or the environment or imposing liability or standards of conduct concerning
any Hazardous material ("Environmental Laws"), lacks any permits, licenses
or other approvals required of it under applicable Environmental Laws or is
violating any term or condition of any such permit, license or approval,
except for such instances of noncompliance which, either singly or in the
aggregate, would not have a Material Adverse Effect, either before or after
giving effect to the Acquisition. The term "Hazardous Material" means
(i) any "hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (ii) any
"hazardous waste" as defined by the Resource Conservation and Recovery Act
of 1976, as amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl, and (v) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance
regulated under or within the meaning of any other law relating to
protection of human health or the environment or imposing liability or
standards of conduct concerning any such chemical material, waste or
substance. In the course of its business, each of the Company, Allied
Finance, the Guarantors and the Acquired Subsidiaries, conducts a periodic
review of the effect of Environmental Laws on its business, operations and
properties in the course of which it identifies and evaluates associated
costs and liabilities.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 97.0 of the principal amount thereof, plus accrued interest, if any,
from December 5, 1996 to the Time of Delivery hereunder, the principal amount
of Notes set forth opposite the name of such Purchaser in Schedule I hereto,
each of which will have duly endorsed thereon the Guarantee of each Guarantor,
and the Guarantors agree to issue their Guarantees accordingly.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company as
set forth in Annex I to this Agreement and as follows:
(a) It will offer and sell the Securities only to: (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Act in transactions meeting the requirements of
Rule 144A, (ii) institutions which it reasonably believes are "accredited
investors" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Act
("Institutional Accredited Investors") or (iii) upon the terms and conditions
set forth in Annex I to this Agreement;
(b) It is an Institutional Accredited Investor; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Act, and it will comply with the provisions
of Annex I to this Agreement.
4. (a) Except as set forth in the next paragraph, the Securities to be
purchased by each Purchaser hereunder will be represented by one or more
definitive global Securities in book-entry form, which will be deposited by or
on behalf of the Company with The Depository Trust Company ("DTC") or its
designated custodian. The Company will deliver the Securities to Goldman,
Sachs & Co., for the account of each Purchaser, against deposit by or on
behalf of such Purchaser, pursuant to the Collateral Agreement, of U.S.
Government Obligations (as defined in the Collateral Agreement) representing
such Purchaser's percentage of the net proceeds from the Notes Issuance (as
defined in the Collateral Agreement).
Such Securities, if any, as Goldman, Sachs & Co. may request upon at
least forty-eight hours' prior notice to the Company (such request to include
the authorized denominations and the names in which they are to be
registered), shall be delivered in definitive certificated form, by or on
behalf of the Company to Goldman, Sachs & Co. for the account of certain of
the Purchasers, against deposit by or on behalf of such Purchaser, pursuant to
the Collateral Agreement, of U.S. Government Obligations representing such
Purchaser's percentage of the net proceeds from the Notes Issuance.
The Company will cause the certificates representing the global
Securities to be deposited in book-entry form to be made available to Goldman,
Sachs & Co. for checking at least twenty-four hours prior to the Time of
Delivery (as defined below) at the office of DTC or its designated custodian
(the "Designated Office"). The Company will cause the certificates
representing the Securities in definitive certificated form to be made
available for checking and packaging at least twenty-four hours prior to the
Time of Delivery at the office of Goldman, Sachs & Co., 85 Broad Street, New
York, New York 10004. The time and date of such delivery and payment shall be
9:30 a.m., New York City time, on December 5, 1996 or such other time and date
as Goldman, Sachs & Co. and the Company may agree upon in writing. Such time
and date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross- receipt for the Securities and any additional documents requested by
the Purchasers pursuant to Section 7(l) hereof, will be delivered at such time
and date at the offices of Sullivan & Cromwell, 125 Broad Street, New York,
New York 10004 (the "Closing Location"), and the Securities will be delivered
in the case of book-entry Securities, at the Designated Office and in the case
of definitive certificated Securities, at the office of Goldman, Sachs & Co.,
85 Broad Street, New York, New York 10004, all at the Time of Delivery. A
meeting will be held at the Closing Location at 10:00 a.m., New York City
time, on the New York Business Day next preceding the Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to
the preceding sentence will be available for review by the parties hereto.
For the purposes of this Section 4, "New York Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law
or executive order to close.
5. Each of the Company, Allied Finance and the Guarantors, jointly and
severally, agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make
no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish
you with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Securities, provided that in connection therewith neither
the Company nor Allied Finance nor the Guarantors shall be required to qualify
as a foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement, to furnish the Purchasers with
four copies of the Offering Circular and each amendment or supplement thereto
signed by an authorized officer of the Company with the independent
accountants' report(s) in the Offering Circular, and any amendment or
supplement containing amendments to the financial statements covered by such
report(s), signed by the accountants, and from time to time, to furnish the
Purchasers with additional copies thereof in such quantities as you may from
time to time reasonably request; and if, at any time prior to the expiration
of nine months after the date of the Offering Circular, any event shall have
occurred as a result of which the Offering Circular as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Offering
Circular is delivered, not misleading, or, if for any other reason it shall be
necessary or desirable during such same period to amend or supplement the
Offering Circular, to notify you and upon your request to prepare and furnish
without charge to each Purchaser and to any dealer in securities as many
copies as you may from time to time reasonably request of an amended Offering
Circular or a supplement to the Offering Circular which will correct such
statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing
until the date six months after the Time of Delivery, not to offer, sell
contract to sell or otherwise dispose of, except as provided hereunder any
securities of the Company or any of its subsidiaries that are substantially
similar to the Notes or the Notes as guaranteed by any of the Guarantees or
that are convertible into or exchangeable for, or otherwise represent a right
to acquire, any such securities, except as provided hereunder or with your
prior written consent;
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company, Allied Finance or any of the
Guarantors is not subject to Section 13 or 15(d) of the Exchange Act, for the
benefit of holders from time to time of Securities, to furnish at its expense,
upon request, to holders of Securities and prospective purchasers of
securities information (the "Additional Issuer Information") satisfying the
requirements of subsection (d)(4)(i) of Rule 144A under the Act with respect
to the Securities;
(g) If requested by you at any time when any of the Securities are
outstanding, to use its best efforts to cause such Securities to be eligible
for the PORTAL market trading system of the National Association of Securities
Dealers, Inc.;
(h) To file with the Commission, not later than 15 days after the Time
of Delivery, five copies of a notice on Form D under the Act (one of which
will be manually signed by a person duly authorized by each of the Company,
Allied Finance and the Guarantors); to otherwise comply with the requirements
of Rule 503 under the Act; and to furnish promptly to you evidence of each
such required timely filing (including a copy thereof);
(i) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (excluding exhibits, but
including a consolidated balance sheet and consolidated statements of income,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the date of the Offering
Circular), consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail;
(j) During a period of five years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to security holders of the Company, Allied
Finance or Allied Parent (or the stockholders of any other Guarantor having a
class of equity securities registered under Section 12 of the Exchange Act),
and to deliver to you (i) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission or any
securities exchange on which the Securities or any class of securities of the
Company or Allied Parent is listed; and (ii) such additional information
concerning the business and financial condition of the Company, Allied Finance
or any Guarantor as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts
of the Company, Allied Finance or the relevant Guarantor and its subsidiaries
are consolidated in reports furnished to its stockholders generally or to the
Commission);
(k) During the period of three years after the Time of Delivery, the
Company, Allied Finance and the Guarantors will not, and will not permit any
of their "affiliates" (as defined in Rule 144 under the Act) to, resell any of
the Securities that have been reacquired by any of them except pursuant to an
effective registration statement under the Act;
(l) To execute and deliver the Registration Rights Agreement prior to
the Time of Delivery and, pursuant thereto, (i) to file and use its best
efforts to cause to be declared or become effective under the Act, on or prior
to 60 days after the closing of the Acquisition, a registration statement
under the Act providing for the registration of another series of debt
securities of the Company guaranteed by the Guarantors, with terms identical
to the Securities except for the absence of certain provisions for additional
interest (the "Exchange Securities"), and to effect the exchange of the
Securities for the Exchange Securities within 180 days after the closing of
the Acquisition, all in a manner which will permit persons who acquire the
Exchange Securities to resell the Exchange Securities pursuant to Section 4(1)
of the Act, or (ii) if prior to consummation of such exchange offer certain
existing Commission interpretations are changed such that the Exchange
Securities received by holders of Securities other than certain restricted
holders are not or would not be, upon receipt, transferable by each such
holder without restriction under the Securities Act, in lieu thereof, to file
and use its best efforts to cause to be declared or become effective under the
Act, as soon as possible but no later than 180 days after the closing of the
Acquisition, a "shelf" registration statement relating to the resale of the
Securities; and
(m) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Offering Circular
under the caption "Use of Proceeds".
6. The Company, Allied Finance and each of the Guarantors, jointly and
severally, covenants and agrees with the several Purchasers that the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the issue
of the Securities and all other expenses in connection with the preparation,
printing and filing of the Preliminary Offering Circular and the Offering
Circular and any amendments and supplements thereto and the mailing and
delivering of copies thereof to the Purchasers and dealers; (ii) the cost of
printing, word processing or otherwise producing any Agreement among
Purchasers, this Agreement, the Indenture, the Registration Rights Agreement,
the Collateral Agreement, the Blue Sky and Legal Investment Memoranda, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Purchasers in connection with such qualification and in connection with the
Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Securities; (v) the cost of preparing the
Securities; (vi) the fees and expenses of the Trustee and any agent of the
Trustee and the reasonable fees and disbursements of counsel for the Trustee
in connection with the Indenture, Allied Finance Guarantee Documents, the
Collateral Agreement and the Securities; (vii) any cost incurred in connection
with the designation of the Securities for trading in the PORTAL market; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in
this Section. It is understood, however, that, except as specifically
provided in this Section, and Sections 8 and 11 hereof, the Purchasers will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company, Allied Finance and the Guarantors herein are,
at and as of the Time of Delivery, true and correct, the condition that the
Company, Allied Finance and the Guarantors shall have performed all of its or
their obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) Sullivan & Cromwell, counsel for the Purchasers, shall have
furnished to you such opinion or opinions, dated the Time of Delivery, with
respect to the incorporation of the Company, the validity of the Indenture and
the Securities, the Registration Rights Agreement, the Offering Circular and
such other related matters as you may reasonably request, and such counsel
shall have received such papers and information as they may reasonably request
to enable them to pass upon such matters;
(b) Porter & Hedges, L.L.P., counsel for the Company and the
Guarantors, shall have furnished to you their written opinion, dated the Time
of Delivery, in form and substance, and with such assumptions and exceptions
as are, reasonably satisfactory to you, to the effect that:
(i) Allied Parent, the Company and each of the Guarantors
identified with an asterisk in Schedule II (Allied Parent and each such
other Guarantor, an "Identified Guarantor") has been duly incorporated and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to own
its properties and conduct its business as described in the Offering
Circular (such counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel previously furnished to you and
attached to such opinion, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such
opinions);
(ii) Each of the Company and Allied Parent has an authorized
capitalization as set forth in the Offering Circular as of the date set
forth therein, and all of the issued shares of capital stock of the Company
and Allied Parent have been duly and validly authorized and issued and are
fully paid and non-assessable;
(iii) The Company and each of the Identified Guarantors has
been duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel, and in respect of matters of fact upon
certificates of officers of the Company or the Guarantors, as the case may
be, provided that such counsel shall state that they believe that both you
and they are justified in relying upon such opinions and certificates);
(iv) All of the issued shares of capital stock of each of the
Identified Guarantors other than Allied Parent have been duly and validly
authorized and issued, are fully paid and non-assessable; (a) all of the
issued shares of capital stock of the Company are owned directly by Allied
Parent, (b) all of the issued shares of capital stock of each Subsidiary,
with the exception of Allied Finance, are owned directly or indirectly by
the Company and (c) all of the issued shares of capital stock of Allied
Finance are owned directly by Allied Parent, in each case free of liens,
encumbrances, equities or claims, except as otherwise disclosed in the
Offering Circular and, in the case of (b) above, for two liens which do not
have a Material Adverse Effect, either before or after giving effect to the
Acquisition (such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local counsel previously furnished to you
and attached to such opinion, and in respect of matters of fact upon
certificates of officers of the Company, Allied Parent or the Subsidiaries,
provided that such counsel shall state that they believe that both you and
they are justified in relying upon such opinions and certificates);
(v) The Company and each of the Identified Guarantors have good
and indefeasible title in fee simple to all real property owned by them, in
each case free of all liens, encumbrances and defects except such as are
described in the Offering Circular or such as would not have a Material
Adverse Effect, either before or after giving effect to the Acquisition,
and do not interfere with the use made and proposed to be made of such
property; and any real property and buildings held under lease by the
Company and each of the Identified Guarantors are held by them under valid
and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings (in giving the opinion in this clause, such counsel may state
that no examination of record titles for the purpose of such opinion has
been made, and that they are relying upon a general review of the titles of
the Company and each of the Identified Guarantors, upon opinions of local
counsel, and abstracts, reports and policies of title companies rendered or
issued at or subsequent to the time of acquisition of such property by the
Company and each of the Identified Guarantors, upon opinions of counsel to
the lessors of such property and, in respect of matters of fact, upon
certificates of officers of the Company and each of the Identified
Guarantors, provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions, abstracts,
reports, policies and certificates);
(vi) To the best of such counsel's knowledge and other than as
set forth in the Offering Circular, there are no legal or governmental
proceedings pending or threatened or contemplated by governmental
authorities or threatened by others to which the Company, Allied Finance or
any Guarantor is a party or of which any property of the Company, Allied
Finance or any Guarantor is the subject which, if determined adversely to
the Company, Allied Finance or any Guarantor, would individually or in the
aggregate, have a Material Adverse Effect, either before or after giving
effect to the Acquisition;
(vii) Assuming due authorization and execution by each of
Allied Canada and Allied Finance under Canadian law, this Agreement has been
duly authorized, executed and delivered by the Company, Allied Finance and
each of the Identified Guarantors;
(viii) The Notes have been duly authorized, executed,
authenticated, issued and delivered, the Guarantees have been duly
authorized, executed, issued and endorsed onto the Notes and the Notes
constitute valid and legally binding obligations of the Company and the
Guarantees constitute valid and legally binding joint and several
obligations of each of the Guarantors entitled to the benefits provided by
the Indenture subject, as to enforcement, to bankruptcy, insolvency,
moratorium, fraudulent conveyance or other similar laws relating to the
enforcement of creditors' rights and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
law or at equity); and the Securities and the Indenture conform to the
descriptions thereof in the Offering Circular;
(ix) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and Allied Parent and
(assuming due authorization, execution and delivery by the Purchasers)
constitutes a valid and legally binding obligation of the Company and Allied
Parent enforceable in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, moratorium, fraudulent conveyance or other similar
laws relating to the enforcement of creditors' rights and general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in law or at equity) (provided that such counsel
need express no opinion as to the validity or enforceability of any
indemnity or contribution provisions contemplated by Sections 2(a), 3(c)
and 6 thereof); and the Registration Rights Agreement conforms in all
material respects to the summary thereof in the Offering Circular;
(x) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, fraudulent conveyance
or other similar laws relating to the enforcement of creditors' rights and
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in law or at equity);
(xi) The Stock Purchase Agreement has been duly and validly
authorized, executed and delivered by Allied Parent, the Company, and the
other Guarantors party thereto, and constitutes a valid and legally binding
obligation of Allied Parent, the Company, and the other Guarantors party
thereto, enforceable against Allied Parent, the Company, and the other
Guarantors party thereto in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditor's rights and to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in law or at equity);
(xii) Each of the other Acquisition Documents has been duly and
validly authorized by Allied Parent, the Company, Allied Finance and the
other Guarantors party thereto and, when duly executed and delivered by
Allied Parent, the Company, Allied Finance and the Guarantors party
thereto, will be a valid and legally binding obligation of Allied Parent,
the Company, Allied Finance and the Guarantors party thereto, enforceable
against Allied Parent, the Company, Allied Finance and the Guarantors party
thereto in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, fraudulent conveyance or other similar
laws relating to the enforcement of creditors' rights and general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in law or at equity), it being understood that
the foregoing opinion expressed in this paragraph shall apply to any of the
companies mentioned in this paragraph in connection with any of the
Acquisition Documents only if it is a party to such Acquisition Document;
(xiii) The Collateral Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject, as
the enforcement, to bankruptcy, insolvency, moratorium, fraudulent
conveyance or other similar laws relating to the enforcement of creditors'
rights and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in law or at equity); the
provisions of the Collateral Agreement create in favor of the Trustee, on
behalf and for the benefit of the holders of the Notes, a valid, first
priority and perfected security interest in the Collateral ;
(xiv) Assuming the Pledge Agreement has been duly authorized by
Allied Finance under Canadian law, the Pledge Agreement has been duly
authorized and, assuming due execution under Canadian law, when executed
and delivered upon the Acquisition Closing (assuming no adverse changes in
applicable facts or law between the Time of Delivery and the Acquisition
Closing) will constitute a valid and legally binding obligation of Allied
Finance, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, fraudulent conveyance
or other similar laws relating to the enforcement of creditors' rights and
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in law or at equity), and the provisions of the
Pledge Agreement will create a valid, second priority and perfected
security interest in the Allied Canada Debentures in favor of the Trustee
on behalf and for the benefit of the holders of the Notes);
(xv) Assuming due authorization under Canadian law, each of the
Allied Canada Debentures has been duly authorized and, assuming due
execution under Canadian law, when duly executed, issued and delivered upon
the Acquisition Closing (assuming no adverse change in applicable facts or
laws between the Time of Delivery and the Acquisition Closing), will
constitute a valid and legally binding obligation of Allied Canada,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, fraudulent conveyance or other similar
laws relating to the enforcement of creditors' rights and general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in law or at equity);
(xvi) Assuming due authorization under Canadian law, each of
the Allied Finance Debentures has been duly authorized and, assuming due
execution under Canadian law, when duly executed, issued and delivered upon
the Acquisition Closing (assuming no adverse change in applicable facts or
laws between the Time of Delivery and the Acquisition Closing), will
constitute a valid and legally binding obligation of Allied Finance,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, fraudulent conveyance or other similar
laws relating to the enforcement of creditors' rights and general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in law or at equity);
(xvii) The issue and sale of the Securities, the execution and
delivery of the Note Transaction Documents, and the compliance by the
Company, Allied Finance and the Guarantors with all of the provisions of
the Securities, this Agreement and the other Note Transaction Documents and
the consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, sale/leaseback agreement, loan agreement, lease or other
agreement or instrument known to such counsel to which the Company, Allied
Finance or any Guarantor is a party or by which the Company, Allied Finance
or any Guarantor is bound or to which any of the property or assets of the
Company, Allied Finance or any Guarantor is subject, nor will such actions
result in any violation of the provisions of the Certificate of
Incorporation, By-laws or other governing instrument, as the case may be,
of Allied Parent, the Company or any Identified Guarantor or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any Identified Guarantor, or any of their
properties; and nor will such actions result in any violation of the
provisions of the Certificate of Incorporation, By-laws or other governing
instrument, as the case may be, of any Non-Covered Entity or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over any Non-Covered Entity, or any of their properties, which
violation could reasonably be expected to have a Material Adverse Effect,
either before or after giving effect to the Acquisition;
(xviii) To the best of such counsel's knowledge, no consent,
approval, authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Company, Allied Finance
or the Guarantors of the transactions contemplated by this Agreement or the
other Note Transaction Documents, except for the filing of a registration
statement by the Company, Allied Finance and the Guarantors with the
Commission as contemplated by Section 5(l) hereof, the filing of a notice
on Form D by the Company, Allied Finance and the Guarantors with the
Commission pursuant to Section 5(h) hereof and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Purchasers and those consents,
approvals, authorizations, orders, registrations or qualifications referred
to in the Stock Purchase Agreement or the schedules thereto;
(xix) To the best of such counsel's knowledge, none of the
Company or the Identified Guarantors is in violation of its Certificate of
Incorporation, By-laws or other governing instrument, as the case may be,
or in default in the performance or observance of any material obligation,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound;
(xx) The statements set forth in the Offering Circular under
the caption "Description of the Notes", insofar as they purport to constitute
a summary of the terms of the Securities, under the captions "Risk Factors",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", "Business and Properties", "Certain Federal Income Tax
Consequences" and "Offer and Resale", insofar as they purport to describe
the provisions of the laws and documents referred to therein, provide a
fair and complete summary and include all material terms thereof;
(xxi) No registration of the Securities under the Act, and no
qualification of an indenture under the United States Trust Indenture Act
of 1939 with respect thereto, is required for the offer and sale by the
Company and the offer and initial resale by the Purchasers of the
Securities in the manner contemplated by this Agreement;
(xxii) Such counsel have no reason to believe that the Offering
Circular and any further amendments or supplements thereto made by the
Company prior to the Time of Delivery (other than the financial statements
therein, as to which such counsel need express no opinion) contained as of
its date or contains as of the Time of Delivery an untrue statement of a
material fact or omitted or omits, as the case may be, to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(xxiii) Neither the Company nor Allied Finance nor any
Guarantor is an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the Investment Company Act.
The foregoing opinion of Porter & Hedges, L.L.P. may be limited to the
laws of the State of Texas, the General Corporation Law of the State of
Delaware and the Federal laws of the United States, and such counsel may
assume that the laws of the State of New York and the laws of the State of
Delaware (other than the General Corporation Law) which would apply to the
Note Transaction Documents governed by the laws of the State of New York or
the laws of the State of Delaware, as the case may be, are identical to the
laws of the State of Texas which would be applicable to the Note Transaction
Documents if such documents were governed by the laws of the State of Texas,
provided, that such counsel shall state that although they have not made any
independent investigation of the laws of the State of New York for purposes of
this Agreement, they have no reason to believe that the laws of the State of
New York which would apply to the Note Transaction Documents governed by New
York differ in any material respect from the provisions of the laws of the
State of Texas which would apply if such documents were governed under the
laws of the State of Texas. With respect to issues governed by the New York
Uniform Commercial Code, in its opinion expressed in paragraphs (xiii) and
(xiv), Porter & Hedges, L.L.P. may base such opinion solely upon a review by
such firm of a compilation of the New York Uniform Commercial Code published
in the Uniform Commercial Code Reporting Service, State UCC Variations Binder,
by Clark Boardman Callahan. In rendering any such opinion, such counsel may
rely, as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company, Allied Finance or the
Guarantors and public officials.
(c) Davies, Ward & Beck, Canadian counsel for the Company and the
Guarantors, shall have furnished to you their written opinion, dated the Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) Each of Allied Canada and Allied Finance has been duly
incorporated and is validly existing as a corporation in good standing
under the federal laws of Canada, with all necessary corporate power and
authority to own its properties and to execute and deliver and perform its
obligations under the Indenture and, in the case of Allied Canada, the
Guaranty to which it is a party; and all of the issued shares of capital
stock of each of Allied Canada and Allied Finance have been duly and
validly authorized and issued, are fully paid and non-assessable, and are
owned of record by Allied Parent in the case of Allied Finance and by the
Company in the case of Allied Canada;
(ii) Assuming due delivery under New York law, this Agreement
has been duly authorized, executed and delivered by each of Allied Canada and
Allied Finance;
(iii) The Guaranty of Allied Canada has been duly authorized,
executed and endorsed onto the Notes;
(iv) Assuming due delivery under New York law, the Indenture has
been duly authorized, executed and delivered by each of Allied Canada and
Allied Finance;
(v) Assuming due delivery under Delaware law, the Stock
Purchase Agreement has been duly authorized, executed and delivered by
Allied Canada;
(vi) Each of the other Acquisition Documents to which either
Allied Canada or Allied Finance is a party has been duly and validly
authorized by either Allied Canada or Allied Finance or both, as the case may
be, and, assuming due delivery under Delaware law, when duly executed and
delivered by either Allied Canada or Allied Finance or both, as the case may
be, will have been duly authorized, executed and delivered by either Allied
Canada or Allied Finance or both;
(vii) Each of the Allied Canada Debentures has been duly
authorized by Allied Canada and, assuming due delivery under Delaware law,
when duly executed and delivered upon the Acquisition Closing, will have been
duly authorized, executed and delivered by Allied Canada;
(viii) Each of the Allied Finance Debentures has been duly
authorized by Allied Finance and, assuming due delivery under Delaware law,
when duly executed and delivered in accordance with the Debenture Exchange
Agreement, will have been duly authorized, executed and delivered by Allied
Finance;
(ix) The Debenture Exchange Agreement has been duly authorized
by Allied Finance and, when executed and delivered by Allied Finance and by
Laidlaw upon the Acquisition Closing, will constitute a valid and legally
binding obligation of Allied Finance, enforceable against Allied Finance by
Laidlaw in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, fraudulent conveyance or other similar
laws relating to the enforcement of creditors' rights and general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in law or at equity); and the provisions of
Debenture Exchange Agreement (or any other ancillary document pursuant to
which the transfer described therein is to be effected) are sufficient to
transfer from Laidlaw to Allied Finance all right, title and interest of
Laidlaw in and to the Allied Canada Debentures;
(x) The Pledge Agreement has been duly authorized by Allied
Finance and, assuming due delivery under New York law, when executed and
delivered upon the Acquisition Closing, will have been duly authorized,
executed and delivered by Allied Finance;
(xi) If either the Pledge Agreement or the provisions thereof
concerning the grant of the security interest in favor of the Trustee for
the benefit of the Holders of the Securities were governed by the laws of
the Province of Ontario, such aforementioned provisions would be sufficient
to create a valid and effective security interest under the Personal
Property Security Act (Ontario) to and in favor of the Trustee for the
benefit of the Holders of the Securities in the interest of Allied Finance in
and to the Allied Canada Debentures;
(xii) A financing statement has been filed under the Personal
Property Security Act (Ontario) in respect of the security interest to be
created by the Pledge Agreement in the interest of Allied Finance in and to
the Allied Canada Debentures, and no further filing, recording or
registration in any office of public record maintained under the laws of
the Province of Ontario will be required in order to perfect such security
interest under the Personal Property Securities Act (Ontario), assuming
that the Personal Property Security Act (Ontario) would govern the
perfection of such security interest; no opinion is expressed herein with
respect to the need to amend or renew such filings, recordings or
registrations in the future; and
(xiii) The authorization, execution and delivery by each of
Allied Canada and Allied Finance of such of the Agreement, the Indenture, the
Guaranty (with respect only to Allied Canada), the Pledge Agreement, the
Stock Purchase Agreement, the Allied Canada Debentures as have been
authorized, executed and delivered by it, and the performance by it of its
obligations thereunder, do not (and will not in the case of the Debenture
Exchange Agreement, the Allied Canada Debentures and the Allied Finance
Debentures) result in a breach of (i) the Articles of Incorporation or by-
laws of such corporation, or (ii) any resolution of the directors (or any
committee of directors) or of the shareholder of such corporation.
Such counsel shall state, that such counsel has conducted or
caused to be conducted searches or inquiries against Allied Canada and
Allied Finance under the statutes and at the offices of public record set
out below, the results of which searches and inquiries were current to or
performed on, as the case may be, the applicable dates set forth in
Schedule A to such counsel's opinion;
(a) in the public records of the Registrar of the Ontario Court
(General Division) in Bankruptcy and at the offices of the
Official Receiver in Toronto, Ontario and at the office of the
Superintendent of Bankruptcy in Hull, Quebec for proposals or
assignments in bankruptcy under the Bankruptcy and Insolvency Act
(Canada);
(b) under the Bank Act (Canada); and
(c) for registrations under the Personal Property Security Act
(Ontario).
Such counsel shall further state that no undischarged
registrations or entries were discovered as a result of such searches or
inquiries which gave notice of any lien or encumbrance against or a
security interest in the assets of any of Allied Canada or Allied Finance,
except as set out in the afore-mentioned Schedule A. With respect to
clause (c) above, such counsel shall note that such counsel has in the past
determined that the records maintained under the Personal Property Security
Act (Ontario) contain errors and omissions which may affect the accuracy or
completeness of results of searches conducted thereunder.
The foregoing opinion of Davies, Ward and Beck may be limited
to the laws of the Province of Ontario and the Federal laws of Canada.
(d) Ivan R. Cairns, Senior Vice-President and General Counsel for
the Laidlaw Parties, shall have furnished to you his written opinion, dated
the Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) Each of the Acquired Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation, with corporate power and
authority to own its properties and conduct its business as described in the
Offering Circular (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel, provided that such
counsel shall state that they believe that both you and they are justified in
relying upon such opinions);
(ii) Each of the Acquired Subsidiaries has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Laidlaw Parties or the Acquired
Subsidiaries, provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions and
certificates);
(iii) All of the issued shares of capital stock of each
Acquired Subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable, and (except as otherwise set forth in the
Offering Circular) are owned directly or indirectly by the Laidlaw Sellers,
free and clear of all liens, encumbrances, equities or claims (such counsel
being entitled to rely in respect of the opinion in this clause upon opinions
of local counsel and in respect of matters of fact upon certificates of
officers of the Laidlaw Parties or the Acquired Subsidiaries, provided that
such counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates);
(iv) No actions, suits or proceedings are pending or, to
the knowledge of such counsel, threatened which challenge the validity of the
Stock Purchase Agreement or any action required to be taken by any of the
Laidlaw Parties or any Acquired Subsidiary pursuant to the Stock Purchase
Agreement;
(v) The Stock Purchase Agreement has been duly and validly
authorized, executed and delivered by the Laidlaw Parties party thereto and
constitutes a valid and legally binding obligation of the Laidlaw Parties
party thereto, enforceable against the Laidlaw Parties party thereto in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditor's rights and to general principles of equity;
(vi) When each of the other Acquisition Documents has been
duly and validly authorized, executed and delivered by the Laidlaw Parties
party thereto, each such Acquisition Document will be the valid and legally
binding obligation of the Laidlaw Parties party thereto, enforceable
against the Laidlaw Parties party thereto in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditor's
rights and to general principles of equity;
(vii) The execution and delivery of the Acquisition
Documents, and the compliance by the Laidlaw Parties and the Acquired
Subsidiaries with all of the provisions of the Acquisition Documents and the
consummation of the transactions therein contemplated will not conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement, lease or other agreement or
instrument known to such counsel to which any Acquired Subsidiary is a party
or by which any Acquired Subsidiary is bound or to which any of the property
or assets of any Acquired Subsidiary is subject, nor will such actions result
in any violation of the provisions of the Certificate of Incorporation, By-
laws or other governing instrument, as the case may be, of any Laidlaw Party
or any Acquired Subsidiary or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over any Laidlaw
Party or any Acquired Subsidiary, or any of their properties;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body having jurisdiction over any Laidlaw Party or any Acquired Subsidiary, or
any of their properties is required for the consummation by the Laidlaw
Parties or the Acquired Subsidiaries of the transactions contemplated by the
Acquisition Documents, except for those consents, approvals, authorizations,
orders, registrations or qualifications referred to in the Stock Purchase
Agreement or the schedules thereto;
(ix) None of the Acquired Subsidiaries is in violation of
its Certificate of Incorporation, By-laws or other governing instrument, as
the case may be, or in default in the performance or observance of any
material obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties may
be bound; and
(x) When the Allied Finance Debentures are issued in the
forms set forth as Exhibits B-1 and B-2 of the Stock Purchase Agreement, the
subordination provisions in such Allied Finance Debentures will be binding
and enforceable upon the Laidlaw Parties as holders of such Allied Finance
Debentures, and the rights of the Laidlaw Parties under the Allied Finance
Debentures will have been effectively subordinated to the rights of the
holders of the Securities to the extent set forth in the Allied Finance
Debentures in such forms.
(e) On the date of the Offering Circular, prior to the execution of this
Agreement, and also at the Time of Delivery, Arthur Andersen LLP shall have
furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex II(a) hereto (subject only to delivery by the
Purchasers to Arthur Andersen LLP of a letter substantially in the form of
Annex III(a) hereto);
(f) On the date of the Offering Circular, prior to the execution
of this Agreement, and also at the Time of Delivery, Coopers & Lybrand
shall have furnished to you a letter or letters, dated the respective
dates of delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex II(b) hereto (subject only to delivery by the
Purchasers to Coopers & Lybrand of a letter substantially in the form of Annex
III(b) hereto);
(g) (i) None of the Company, Allied Finance, the Guarantors, their
subsidiaries and the Acquired Subsidiaries shall have sustained since
the date of the latest unaudited financial statements included in the Offering
Circular any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise than
as set forth or contemplated in the Offering Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular
there shall not have been any change in the capital stock or long-term debt of
the Company, Allied Finance, the Guarantors or the Acquired Subsidiaries or
any change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, stockholders' equity or
results of operations of the Company, Allied Finance, the Guarantors or the
Acquired Subsidiaries otherwise than as set forth or contemplated in the
Offering Circular, the effect of which, in any such case described in Clause
(i) or (ii), is in the judgment of the Purchasers so material and adverse as
to make it impracticable or inadvisable to proceed with the offering or the
delivery of the Securities on the terms and in the manner contemplated in this
Agreement and in the Offering Circular;
(h) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's or Allied Parent's debt securities
by any "nationally recognized statistical rating organization", as
that term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act, and (ii) no such organization shall have publicly announced that it
has under surveillance or review, with possible negative implications, its
rating of any of the Company's or Allied Parent's debt securities;
(i) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on the National
Association of Securities Dealers Automated Quotations National Market
("NASDAQ"); (ii) a suspension or material limitation in trading in Allied
Parent's securities on NASDAQ; (iii) a general moratorium on commercial
banking activities declared by either United States or Canadian Federal,
Canadian Provincial or New York State authorities; (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this Clause (iv) in the judgment of the Purchasers makes it
impracticable or inadvisable to proceed with the offering or the delivery of
the Securities on the terms and in the manner contemplated in this Agreement
and in the Offering Circular; or (v) the occurrence of any material adverse
change in the existing, financial, political or economic conditions in the
United States or elsewhere which, in the judgment of the Purchasers, would
materially and adversely affect the financial markets or the markets for the
Securities and other debt securities;
(j) The Securities have been designated for trading on the PORTAL market;
(k) The Company shall have entered into the Collateral Agreement
and you shall have received executed counterparts thereof; and the
Company shall have caused Credit Suisse to issue an irrevocable letter of
credit in favor of the Trustee for the account of the Company and Allied
Parent, as co-obligors, in the amount set forth in the Offering Circular;
(l) At the Time of Delivery, Emcon Environmental Services, Inc. shall
have furnished to you environmental assessment reports, dated as of the
Time of Delivery and addressed to you, in form and substance reasonably
satisfactory to you;
(m) At the Time of Delivery (as defined herein), (i) all of the issued
shares of capital stock of the Company will be owned directly by Allied
Parent, (ii) all of the issued shares of capital stock of each Subsidiary
(with the exception of Allied Finance) will be owned directly by the Company,
and (iii) all of the issued shares of capital stock of Allied Finance will be
owned directly by Allied Parent, in each case free of liens, encumbrances,
equities or claims except as is otherwise disclosed in the Offering Circular
and, in the case of (ii) above, for two liens which do not have a Material
Adverse Effect, either before or after giving effect to the Acquisition;
(n) There shall not have occurred any change or proposed change in
the United States and Canadian law that would reasonably be expected to
adversely affect the economic consequences, including the tax treatment, that
Allied or any of its subsidiaries contemplate deriving from the Acquisition;
and
(o) The Company shall have furnished or caused to be furnished to
you at the Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and warranties
of the Company, Allied Finance and the Guarantors herein at and as of such
Time of Delivery, as to the performance by the Company and the Guarantors of
all of their obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsection (g) of this Section and as
to such other matters as you may reasonably request.
8. (a) The Company, Allied Finance and the Guarantors, jointly and
severally, will indemnify and hold harmless each Purchaser against any losses,
claims, damages or liabilities, joint or several, to which such Purchaser may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Circular or the Offering Circular, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary to
make the statements therein not misleading, and will reimburse each Purchaser
for any legal or other expenses reasonably incurred by such Purchaser in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that neither the Company nor Allied
Finance nor the Guarantors shall be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Offering Circular or the Offering Circular or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Purchaser through Goldman, Sachs &
Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company, Allied
Finance and the Guarantors against any losses, claims, damages or liabilities
to which the Company, Allied Finance or the Guarantors may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Offering Circular or the Offering Circular, or any amendment
or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Offering Circular or the Offering
Circular or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Purchaser
through Goldman, Sachs & Co. expressly for use therein; and will reimburse the
Company, Allied Finance and the Guarantors for any legal or other expenses
reasonably incurred by the Company, Allied Finance and the Guarantors in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder (whether or
not the indemnified party is an actual or potential party to such action
orclaim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out
of such action or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company, Allied Finance and the
Guarantors on the one hand and the Purchasers on the other from the offering
of the Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company, Allied
Finance and the Guarantors on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by
the Company, Allied Finance and the Guarantors on the one hand and
thePurchasers 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 bear to the total underwriting discounts and commissions received
by the Purchasers, in each case as set forth in the Offering Circular. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, Allied Finance or the Guarantors on the one hand or
the Purchasers on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, Allied Finance, the Guarantors and the Purchasers
agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation (even if the
Purchasers were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d), no
Purchaser shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities purchased by it and
distributed to investors were offered to investors exceeds the amount of any
damages which such Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. The
Purchasers' obligations in this subsection (d) to contribute are several in
proportion to their respective purchase obligations and not joint.
(e) The obligations of the Company, Allied Finance and the Guarantors
under this Section 8 shall be in addition to any liability which the Company,
Allied Finance and the Guarantors may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Act; and the obligations of the Purchasers
under this Section 8 shall be in addition to any liability which the
respective Purchasers may otherwise have and shall extend, upon the same
termsand conditions, to each officer and director of the Company, Allied
Finance or the Guarantors and to each person, if any, who controls the
Company, Allied Finance or the Guarantors within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder, the non-defaulting
Purchaser may in its discretion arrange for the non-defaulting Purchaser or
another party or other parties to purchase such Securities on the terms
contained herein. If within thirty-six hours after such default by any
purchaser the non- defaulting Purchaser does not arrange for the purchase of
such Securities, then the Company, Allied Finance and the Guarantors shall be
entitled to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to the non-defaulting Purchaser to
purchase such Securities on such terms. In the event that, within the
respective prescribed periods, the non- defaulting Purchaser notifies the
Company that the non-defaulting Purchaser has so arranged for the purchase of
such Securities, or the Company notifies the non- defaulting Purchaser that it
has so arranged for the purchase of such Securities, the non-defaulting
Purchaser or the Company shall have the right to postpone the Time of Delivery
for a period of not more than seven days, in order to effect whatever changes
may thereby be made necessary in the Offering Circular, or in any other
documents or arrangements, and the Company, Allied Finance and the Guarantors
agree to prepare promptly any amendments to the Offering Circular which in the
opinion of the non-defaulting Purchaser may thereby be made necessary. The
term "Purchaser" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser by the non-defaulting Purchaser, the
Company, Allied Finance and the Guarantors as provided in subsection (a)
above, the aggregate principal amount of such Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
all the Securities, then the Company shall have the right to require the non-
defaulting Purchaser to purchase the principal amount of Securities which such
Purchaser agreed to purchase hereunder and, in addition, to require the non-
defaulting Purchaser to purchase the Securities of such defaulting Purchaser
for which such arrangements have not been made; but nothing herein shall
relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser by the non-defaulting Purchaser, the
Company, Allied Finance and the Guarantors as provided in subsection (a)
above, the aggregate principal amount of Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of all the Securities,
or if the Company shall not exercise the right described in subsection (b)
above to require the non-defaulting Purchaser to purchase Securities of a
defaulting Purchaser, then this Agreement shall thereupon terminate, without
liability on the part of the non-defaulting Purchaser, the Company, Allied
Finance or the Guarantors, except for the expenses to be borne by the Company,
Allied Finance, the Guarantors and the Purchasers as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Purchaser from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, Allied Finance, the Guarantors and the
several Purchasers, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Purchaser or any controlling person of
any Purchaser, the Company, Allied Finance or the Guarantors, or any officer
or director or controlling person of the Company, Allied Finance or the
Guarantors, and shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company, Allied Finance nor the Guarantors shall then be under any
liability to any Purchaser except as provided in Sections 6 and 8 hereof; but,
if for any other reason, the Securities are not delivered by or on behalf of
the Company, Allied Finance and the Guarantors as provided herein, the
Company, Allied Finance and the Guarantors, jointly and severally, will
reimburse the Purchasers through you for all reasonable out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Purchasers in making preparations for the purchase,
sale and delivery of the Securities, but neither the Company, Allied Finance
nor the Guarantors shall then be under any further liability to any Purchaser
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to any of the Purchasers shall be delivered or sent by mail,
telex or facsimile transmission to you in care of Goldman, Sachs & Co., 85
Broad Street, New York, New York 10004, Attention: Registration Department;
and if to the Company, Allied Finance or any Guarantor shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company
set forth in the Offering Circular, Attention: Secretary; provided, however,
that any notice to a Purchaser pursuant to Section 8(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Purchaser
at its address set forth in its Purchasers' Questionnaire, or telex
constituting such Questionnaire, which address will be supplied to the Company
by you upon request. Any such statements, requests, notices or agreements
shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Company, Allied Finance, each of the
Guarantors and, to the extent provided in Sections 8 and 10 hereof, the
officers and directors of the Company, Allied Finance or any Guarantor and
each person who controls the Company, Allied Finance, any Guarantor or any
Purchaser, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Securities from any
Purchaser shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one
and the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Purchasers,
the Company, Allied Finance and the Guarantors. It is understood that your
acceptance of this letter on behalf of each of the Purchasers is pursuant to
the authority set forth in a form of Agreement among Purchasers, the form of
which shall be submitted to the Company for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
ALLIED WASTE NORTH AMERICA,
INC.
By: /s/ Roger A. Ramsey
Name: Roger A. Ramsey
Title: Chief Executive Officer
By: /s/ Henry L. Hirvela
Name: Henry L. Hirvela
Title: Vice President and CFO
ALLIED WASTE INDUSTRIES, INC.,
as Guarantor
By: /s/ Roger A. Ramsey
Name: Roger A. Ramsey
Title: Chief Executive Officer
By: /s/ Henry L. Hirvela
Name: Henry L. Hirvela
Title: Vice President and CFO
ALLIED WASTE HOLDINGS (CANADA)
LTD.
as Guarantor
By: /s/ Steven M. Helm
Name: Steven M. Helm
Title: Secretary and Treasurer
ALLIED WASTE FINANCE (CANADA)
LTD.
By: /s/ Steven M. Helm
Name: Steven M. Helm
Title: Secretary and Treasurer
HENRY L. HIRVELA
As Executive Vice President of
each of the Subsidiary Guarantors,
other than Allied Canada, listed in
Schedule II hereto
By: /s/ Henry L. Hirvela
Name: Henry L. Hirvela
Title: Executive Vice President
Accepted as of the date hereof:
Goldman, Sachs & Co.
Citicorp Securities, Inc.
CS First Boston Corporation
By: /s/ Goldman, Sachs & Co.
(Goldman, Sachs & Co.) On behalf of each of the Purchasers
