<PAGE> 1
As Filed with the Securities and Exchange Commission on February 28, 1997
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ALLIED WASTE INDUSTRIES, INC.
(Exact name of co-registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 4953 88-0228636
(State or other jurisdiction of incorporation (Primary Standard Industrial Classification (I.R.S. Employer
or organization) Code Number) Identification Number)
</TABLE>
ALLIED WASTE NORTH AMERICA, INC.
(Exact name of co-registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 4953 86-0843596
(State or other jurisdiction of incorporation (Primary Standard Industrial Classification (I.R.S. Employer
or organization) Code Number) Identification Number)
</TABLE>
15880 North Greenway-Hayden Loop, Suite 100
Scottsdale, Arizona 85260
(602) 423-2946
(Address, including Zip Code, and Telephone Number, including Area Code, of
Registrants' Principal Executive Offices)
Roger A. Ramsey
Chief Executive Officer
Allied Waste Industries, Inc.
15880 North Greenway-Hayden Loop, Suite 100
Scottsdale, Arizona 85260
(602) 423-2946
(Name, Address, including Zip Code, and Telephone Number, including Area Code,
of Agent for Service)
with a copy to:
Robert G. Reedy
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002-2764
(713) 226-0600
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment, please check the following box. [X]
If any of the securities being registered on this form are to be
offered in connection with the termination of a holding company and there is
compliance with General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
=================================================================================================================================
Proposed maximum Proposed maximum
Title of class of securities Amount to be aggregate price aggregate offering Amount of
to be registered registered per unit (1) per unit (1) registration fee
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10 1/4% Senior Subordinated Notes Due 2006 $525,000,000 100% $525,000,000 $181,035
- ---------------------------------------------------------------------------------------------------------------------------------
Guarantees of 10 1/4% Senior Subordinated
Notes Due 2006 -- -- -- None (2)
=================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the registration
fee in accordance with Rule 457(f)(2) under the Securities Act of
1933.
(2) No fee required pursuant to Rule 457(h).
The registrants hereby amend this registration statement on such date or dates
as may be necessary to delay its effective date until the registrants shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION IN FORM S-4 LOCATION IN PROSPECTUS
- ----------------------------------- ----------------------
<S> <C>
1. Forepart of Registration Statement and Outside Front
Cover Page of Prospectus................................ Outside Front Cover Page of Prospectus; Cover Page of the
Registration Statement
2. Inside Front and Outside Back Cover Pages of
Prospectus.............................................. Inside Front Cover Page; Outside Back Cover Page
3. Risk Factors, Ratio of Earnings to Fixed Charges and
Other Information....................................... Prospectus Summary; Risk Factors; The Company
4. Terms of the Transaction................................ Prospectus Summary; The Exchange Offer; Certain Federal
Income Tax Consequences of the Exchange Offer;
Description of the Exchange Notes; Certain Federal Income
Tax Consequences of an Investment in the Exchange Notes;
Plan of Distribution
5. Pro Forma Financial Information......................... Not Applicable
6. Material Contracts with the Company Being
Acquired................................................ Not Applicable
7. Additional Information Required for Reoffering by
Persons and Parties Deemed to be Underwriters........... Not Applicable
8. Interests of Named Experts and Counsel.................. Legal Matters
9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities.......... Not Applicable
10. Information With Respect to S-3 Registrants............. Not Applicable
11. Incorporation of Certain Information by Reference....... Not Applicable
12. Information With Respect to S-2 or S-3 Registrants...... Available Information; Prospectus Summary; The
Company
13. Incorporation of Certain Information by Reference....... Available Information
14. Information With Respect to Registrants Other Than
S-3 or S-2 Registrants.................................. Not Applicable
15. Information With Respect to S-3 Companies............... Not Applicable
16. Information With Respect to S-2 or S-3 Companies........ Not Applicable
17. Information With Respect to Companies Other Than
S-2 or S-3 Companies.................................... Not Applicable
18. Information if Proxies, Consents or Authorizations
are to be Solicited..................................... Not Applicable
19. Information if Proxies, Consents or Authorizations
are not to be Solicited, or in an Exchange Offer........ Not Applicable
</TABLE>
<PAGE> 3
PROSPECTUS
ALLIED WASTE NORTH AMERICA, INC.
OFFER TO EXCHANGE ALL OF ITS OUTSTANDING 10 1/4% SENIOR SUBORDINATED NOTES DUE
2006 FOR 10 1/4% SENIOR SUBORDINATED NOTES DUE 2006 WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,1997,
UNLESS EXTENDED.
Allied Waste North America, Inc., a Delaware corporation (the "Company"),
hereby offers (the "Exchange Offer"), upon the terms and subject to the
conditions set forth in this Prospectus and the accompanying Letter of
Transmittal (the "Letter of Transmittal") relating to the Exchange Offer, to
exchange $1,000 principal amount of its 10 1/4% Senior Subordinated Notes Due
2006 (the "Exchange Notes"), which will be registered under the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement
of which this Prospectus is a part, for $1,000 principal amount of its
outstanding 10 1/4% Senior Subordinated Notes Due 2006 (the "Notes"), of which
an aggregate of $525,000,000 in principal amount is outstanding as of the date
of this Prospectus. The form and terms of the Exchange Notes are identical in
all material respects to the form and terms of the Notes.
Interest on the Exchange Notes will be payable semi-annually on June 1 and
December 1 of each year, commencing June 1, 1997. The Exchange Notes will mature
on December 1, 2006 and will not be subject to redemption at the option of the
Company except as follows. The Exchange Notes will be redeemable at the option
of the Company, in whole or in part, at any time on or after December 1, 2001 at
the redemption prices set forth herein plus accrued and unpaid interest to the
date of redemption. Prior to December 1, 2001, the Exchange Notes will be
subject to redemption, at the option of the Company, in whole or in part, at any
time, at a redemption price equal to the greater of (i) 100% of their principal
amount or (ii) the sum of the present values of the remaining scheduled payments
of principal and interest thereon discounted to maturity on a semi-annual basis
at the Treasury Yield (as defined herein) plus 75 basis points, plus in each
case accrued and unpaid interest to the date of redemption. Up to 33 1/3% in
aggregate principal amount of Exchange Notes originally issued will be
redeemable at the option of the Company at any time or times prior to December
1, 1999 from the net proceeds of one or more Public Offerings (as defined
herein), at a redemption price of 110.25% of the principal amount thereof, plus
accrued and unpaid interest to the date of redemption. Up to $100 million in
aggregate principal amount of Exchange Notes will be redeemable at the option of
the Company out of proceeds of Asset Dispositions (as defined herein) at any
time or times on or before June 28, 1997, at a redemption price of 110.25% of
the principal amount thereof, plus accrued and unpaid interest to the date of
redemption. Upon a Change of Control, holders of the Exchange Notes may require
the Company to purchase all or a portion of the Exchange Notes at a purchase
price equal to 101% of the principal amount thereof, plus accrued and unpaid
interest to the date of purchase. See "Description of the Exchange Notes."
The Exchange Notes will be senior subordinated unsecured obligations of
the Company and will be unconditionally guaranteed on a senior subordinated
basis by Allied Waste Industries, Inc. ("Allied"), a Delaware corporation and
the sole stockholder of the Company, and all of the Restricted Subsidiaries of
the Company other than Allied Insurance (as defined herein). The Senior
Subordinated Guarantee of Allied Parent will be guaranteed on a senior
subordinated basis by Allied Waste Finance (Canada) Ltd., a Canadian corporation
and a wholly-owned subsidiary of Allied ("Allied Finance"). The Senior
Subordinated Guarantee of Allied Finance will be secured by a second priority
lien on a 7% Debenture and a Zero Coupon Debenture issued by Allied Waste
Holdings (Canada) Ltd., a Canadian corporation and a wholly-owned subsidiary of
the Company. The Exchange Notes and the Senior Subordinated Guarantees will be
subordinated in right of payment to all existing and future Senior Debt of the
Company and the Guarantors, respectively, will rank pari passu in right of
payment with all unsecured senior subordinated indebtedness of the Company and
the Guarantors, respectively, and will rank senior in right of payment to any
future indebtedness of the Company and the Guarantors, respectively, that may be
subordinated thereto. The Senior Subordinated Guarantees may be subject to
certain legal limitations under certain circumstances. See "Risk Factors --
Fraudulent Conveyance" and "-- Substantially All Operations at Subsidiary Level;
Structural Subordination."
The Company will accept for exchange any and all validly tendered Notes on
or prior to 5:00 p.m., New York City time, on _______________, 1997, unless
extended (if and as extended, the "Expiration Date"). Tenders of Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date. See "The Exchange Offer."
The Exchange Notes are being offered hereunder in order to satisfy certain
obligations of the Company contained in the Registration Rights Agreement (as
defined herein). Based on interpretations by the staff of the Securities and
Exchange Commission (the "Commission") set forth in no-action letters issued to
third parties, the Company believes the Exchange Notes issued pursuant to the
Exchange Offer in exchange for Notes may be offered for resale, resold and
otherwise transferred by any holder thereof (other than broker-dealers, as set
forth below, and any such holder that is an "affiliate" of the Company or Allied
within the meaning of Rule 405 under the Securities Act) without compliance with
the registration and prospectus delivery requirements of the Securities Act,
provided that such Exchange Notes are acquired in the ordinary course of such
holder's business and that such holder has no arrangement or understanding with
any person to participate in the distribution of such Exchange Notes. Any holder
who tenders in the Exchange Offer with the intention to participate, or for the
purpose of participating, in a distribution of the Exchange Notes or who is an
affiliate of the Company or Allied may not rely upon such interpretations by the
staff of the Commission and, in the absence of an exemption therefrom, must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any secondary resale transaction. Holders of
Notes wishing to accept the Exchange Offer must represent to the Company in the
Letter of Transmittal that such conditions have been met.
Each broker-dealer (other than an affiliate of the Company or Allied) that
receives Exchange Notes for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Notes where such Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 90 days after the Expiration Date, it will make
this Prospectus available to any broker-dealer for use in connection with any
such resale. See "Plan of Distribution." Any broker-dealer who is an affiliate
of the Company or Allied may not rely on such no-action letters and must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction.
The Company will not receive any proceeds from this Exchange Offer. No
dealer-manager is being used in connection with this Exchange Offer.
SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BEFORE TENDERING NOTES IN THE EXCHANGE OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
<PAGE> 4
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on
Form S-4 (No 333-_______), including any amendments thereto, under the
Securities Act, with respect to the Exchange Note offered hereby (the
"Registration Statement"). This Prospectus does not contain all the information
set forth in the Registration Statements and the exhibits and schedules thereto.
For further information with respect to the Company and the Exchange Note,
reference is made to the Registration Statement and the exhibits and schedules
filed as a part thereof. Statements made in this Prospectus as to the contents
of any contract or any other document referred to are not necessarily complete,
and, in each instance, reference is made to the copy of such contract or
document filed as an exhibit to the Registration Statement. Each such statement
is qualified in all respects by reference to such exhibit. The Registration
Statement, including exhibits and schedules thereto, is on file at the offices
of the Commission and may be inspected without charge. Copies of such material
may be obtained from the Public Reference Section of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Allied is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. The Company is also subject to the requirements of the Exchange Act,
but is not required to file separate reports, proxy statements or other
information with the Commission as long as certain information regarding the
Company is contained in Allied's reports on Forms 10-K and 10-Q. Such
information is contained in Allied's Annual Report on Form 10-K attached hereto
as Appendix A. The Registration Statement (with exhibits), as well as such
reports, proxy statements and other information, can be inspected and copied at
the public reference facilities maintained by the Commission at its principal
offices at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, its
regional offices at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60601 and 7 World Trade Center, 13th Floor, New York,
New York 10007, and at its site on the World Wide Web at http://www.sec.gov.
Copies of such material can also be obtained at prescribed rates from the Public
Reference Section of the Commission at its principal office at Judiciary Plaza,
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Allied's common stock
is listed on the National Market tier of the Nasdaq Stock Market ("Nasdaq") and
material filed by Allied can be inspected at the offices of Nasdaq at 1735 K
Street, N.W., Washington, D.C. 20006.
A copy of Allied's Annual Report on Form 10-K for the year ended
December 31, 1996 is provided with this Prospectus as Appendix A and is
incorporated herein by reference. All other reports filed pursuant to Section
13(a) or 15(d) of the Exchange Act since December 31, 1996 are also incorporated
by reference.
2
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information appearing elsewhere in
this Prospectus. Unless the context requires otherwise, all references in this
Prospectus to (i) "Allied" are to Allied Waste Industries, Inc. and (ii) the
"Company" are to Allied Waste North America, Inc., the issuer of the Exchange
Notes and a wholly-owned subsidiary of Allied , and its direct and indirect
subsidiaries.
THE COMPANY
The Company is the fourth largest solid waste management company in the
United States, by revenues. The Company is a vertically-integrated,
non-hazardous solid waste management company providing collection, recycling and
disposal services. The Company serves approximately 1.8 million customers in 22
states. The Company currently conducts its operations through 33 transfer
stations, 23 recycling facilities and 46 landfills.
The Company was organized in November, 1996, when Allied contributed
substantially all of its operations to the Company. In December, 1996, the
Company acquired (the "Laidlaw Acquisition") all of the non-hazardous solid
waste management operations of Laidlaw Inc. ("Laidlaw"). In March 1997, the
Company sold (the "Canadian Sale") substantially all of its operations in Canada
to USA Waste Services, Inc. ("USA Waste"). The information set forth in this
Prospectus gives effect to the Canadian Sale. See "Recent Developments."
ALLIED
Allied is the sole stockholder of the Company. Substantially all the
operations of Allied are conducted through the Company.
BUSINESS STRATEGY
The Company's strategy is to build a vertically-integrated solid waste
management company with a strong presence in select markets. The Company plans
to implement this strategy by establishing a market presence generally based on
its landfills, increasing volume in its markets through "tuck-in" acquisitions
of collection companies, marketing to new customers, providing a high level of
customer service, competitively pricing its services based on the particular
circumstances of each market, and continuing to control costs and reduce
corporate overhead as a percentage of revenues. Management believes that its
strategy to build vertically-integrated operations will provide the Company with
competitive advantages in its targeted regional markets.
THE NOTE OFFERING
The Notes ..............................The Notes were sold by the Company
on December 5, 1996, and were
subsequently resold to qualified
institutional buyers pursuant to Rule
144A under the Securities Act, to
institutional investors that are
accredited investors in a manner exempt
from registration under the Securities
Act and to certain persons in
transactions outside the United States
in reliance on Regulation S under the
Securities Act (the "Note Offering").
Registration Rights
Agreement ............................In connection with the Note Offering,
the Company entered into the
Registration Rights Agreement, which
grants holders ("Holders") of the Notes
certain exchange and registration
rights. The Exchange Offer is intended
to satisfy such exchange and
registration rights, which generally
terminate upon the consummation of the
Exchange Offer.
THE EXCHANGE OFFER
Securities Offered .....................$525,000,000 aggregate principal amount
of 10 1/4% Senior Subordinated Notes due
December 1, 2006.
3
<PAGE> 6
The Exchange Offer.................... $1,000 principal amount of the Exchange
Notes in exchange for each $1,000
principal amount of Notes. As of the
date hereof, $525,000,000 aggregate
principal amount of Notes are
outstanding. The Company will issue the
Exchange Notes to holders on or promptly
after the Expiration Date.
Based on an interpretation by the staff
of the SEC set forth in no-action
letters issued to third parties, the
Company believes that Exchange Notes
issued pursuant to the Exchange Offer in
exchange for Notes may be offered for
resale, resold and otherwise transferred
by any Holder thereof (other than any
such Holder which is an "affiliate" of
the Company within the meaning of Rule
405 under the Securities Act) without
compliance with the registration and
prospectus delivery provisions of the
Securities Act, provided that such
Exchange Notes are acquired in the
ordinary course of such Holder's
business and that such Holder does not
intend to participate and has no
arrangement or understanding with any
person to participate in the
distribution of such Exchange Notes.
Each broker-dealer that receives
Exchange Notes for its own account
pursuant to the Exchange Offer must
acknowledge that it will deliver a
prospectus in connection with any resale
of such Exchange Notes. The Letters of
Transmittal state that by so
acknowledging and by delivering a
prospectus, a broker-dealer will not be
deemed to admit that it is an
"underwriter" within the meaning of the
Securities Act. This Prospectus, as it
may be amended or supplemented from time
to time, may be used by a broker-dealer
in connection with resales of Exchange
Notes received in exchange for Notes
where such Notes were acquired by such
broker-dealer as a result of
market-making activities or other
trading activities. The Company has
agreed that for a period of 90 days
after the Expiration Date, it will make
this Prospectus available to any
broker-dealer for use in connection with
any such resale.
Any Holder who tenders in the Exchange
Offer with the intention to participate,
or for the purpose of participating, in
a distribution of the Exchange Notes
could not rely on the position of the
staff of the SEC enunciated in Exxon
Capital Holdings Corporation (available
April 13, 1989), Morgan Stanley & Co.,
Inc. (available June 5, 1991) or similar
no-action letters and, in the absence of
an exemption therefrom, must comply with
the registration and prospectus delivery
requirements of the Securities Act in
connection with the resale of the
Exchange Notes. Failure to comply with
such requirements in such instance may
result in such Holder incurring
liability under the Securities Act for
which the Holder is not indemnified by
the Company.
Expiration Date ...................... 5:00 p.m., New York City time, on ,
1997, unless the Exchange Offer is
extended, in which case the term
"Expiration Date" means the latest date
and time to which the Exchange Offer is
extended.
Interest on the Exchange Notes
and the Notes ...................... The Exchange Notes will bear interest
from December 5, 1996, the date of
issuance of the Notes that are tendered
in exchange for the Exchange Notes (or
the most recent Interest Payment Date
(as defined below in the Summary of
Terms of Exchange Notes) to which
interest on such Notes has been paid).
Accordingly, Holders of Notes that are
accepted for exchange will not receive
interest on the Notes that is accrued
but unpaid at the time of tender, but
such interest will be payable on the
first Interest Payment Date after the
Expiration Date.
Conditions to the
Exchange Offer ................... The Exchange Offer is subject to certain
customary conditions, which may be
waived by the Company.
4
<PAGE> 7
Procedures for
Tendering Notes .....................Each Holder of Notes wishing to accept
the Exchange Offer must complete, sign
and date the relevant accompanying
Letter of Transmittal, or a facsimile
thereof, in accordance with the
instructions contained herein and
therein, and mail or otherwise deliver
such Letter of Transmittal, or such
facsimile, together with the Notes and
any other required documentation to the
Exchange Agent at the address set forth
in the Letter of Transmittal. By
executing the Letter of Transmittal,
each Holder will represent to the
Company that, among other things, the
Holder or the person receiving such
Exchange Notes, whether or not such
person is the Holder, is acquiring the
Exchange Notes in the ordinary course of
business and that neither the Holder nor
any such other person has any
arrangement or understanding with any
person to participate in the
distribution of such Exchange Notes. In
lieu of physical delivery of the
certificates representing Notes,
tendering Holders may transfer Notes
pursuant to the procedure for book-entry
transfer as set forth under "The
Exchange Offer -- Procedures for
Tendering."
Special Procedures for
Beneficial Owners ....................Any beneficial owner whose Notes are
registered in the name of a broker,
dealer, commercial bank, trust company
or other nominee and who wishes to
tender should contact such registered
Holder promptly and instruct such
registered Holder to tender on such
beneficial owner's behalf. If such
beneficial owner wishes to tender on
such owner's own behalf, such beneficial
owner must, prior to completing and
executing the Letter of Transmittal and
delivering its Notes, either make
appropriate arrangements to register
ownership of the Notes in such
beneficial owner's name or obtain a
properly completed bond power from the
registered holder. The transfer of
registered ownership may take
considerable time.
Guaranteed Delivery
Procedures ...........................Holders of Notes who wish to tender
their Notes and whose Notes are not
immediately available or who cannot
deliver their Notes, the Letter of
Transmittal or any other documents
required by the Letter of Transmittal to
the Exchange Agent (or comply with the
procedures for book-entry transfer)
prior to the Expiration Date must tender
their Notes according to the guaranteed
delivery procedures set forth in "The
"Exchange Offer -- Guaranteed Delivery
Procedures."
Withdrawal Rights ......................Tenders may be withdrawn at any time
prior to 5:00 p.m., New York City time,
on the Expiration Date pursuant to the
procedures described under "The Exchange
Offer -- Withdrawals of Tenders."
Acceptance of Notes and
Delivery of Exchange
Notes ...............................The Company will accept for exchange any
and all Notes that are properly tendered
in the Exchange Offer prior to 5:00
p.m., New York City time, on the
Expiration Date. The Exchange Notes
issued pursuant to the Exchange Offer
will be delivered promptly following the
Expiration Date.
Federal Income Tax
Consequences of the
Exchange Offer .......................The issuance of the Exchange Notes to
Holders of the Notes pursuant to the
terms set forth in this Prospectus will
not constitute an exchange for federal
income tax purposes. Consequently, no
gain or loss would be recognized by
Holders of the Notes upon receipt of the
Exchange Notes. See "Certain Federal
Income Tax Consequences of the Exchange
Offer."
Effect on Holders of
Notes ..............................As a result of the making of this
Exchange Offer, the Company will have
fulfilled certain of its obligations
under the Registration Rights Agreement,
and Holders of Notes who do
5
<PAGE> 8
not tender their Notes will generally
not have any further registration rights
under the Registration Rights Agreement
or otherwise. Such Holders will continue
to hold the untendered Notes and will be
entitled to all the rights and subject
to all the limitations applicable
thereto under the Indentures, except to
the extent such rights or limitations,
by their terms, terminate or cease to
have further effectiveness as a result
of the Exchange Offer. All untendered
Notes will continue to be subject to
certain restrictions on transfer.
Accordingly, if any Notes are tendered
and accepted in the Exchange Offer, the
trading market for the untendered Notes
could be adversely affected.
Exchange Agent ....................... First Trust National Association (the
"Exchange Agent").
THE EXCHANGE NOTES
Maturity Date ........................ December 1, 2006.
Interest Payment Dates ............... June 1 and December 1 of each year,
commencing June 1, 1997.
Optional Redemption .................. Except as set forth below, the Exchange
Notes will not be redeemable prior to
December 1, 2001. On or after such date,
the Exchange Notes will be subject to
redemption, at the option of the
Company, in whole or in part, at any
time prior to maturity, at the
redemption prices set forth herein, plus
accrued and unpaid interest (if any) to
the date of redemption.
Prior to December 1, 2001, the Exchange
Notes will be subject to redemption, at
the option of the Company, in whole or
in part, at any time, at a redemption
price equal to the greater of (i) 100%
of their principal amount or (ii) the
sum of the present values of the
remaining scheduled payments of
principal and interest thereon
discounted to maturity on a semiannual
basis at the Treasury Yield (as defined
herein) plus 75 basis points, plus in
each case accrued and unpaid interest
(if any) to the date of redemption.
At any time, or from time to time, prior
to December 1, 1999, up to 33 1/3% in
aggregate principal amount of Exchange
Notes originally issued will be
redeemable, at the option of the
Company, from the net proceeds of one or
more Public Offerings as defined herein
at a redemption price equal to 110.25%
of the principal amount thereof, plus
accrued and unpaid interest (if any) to
the date of redemption. At any time, or
from time to time, on or before June 28,
1997, up to $100 million in aggregate
principal amount of the Exchange Notes
will be redeemable, at the option of the
Company, from the net proceeds of Asset
Dispositions (as defined herein) at a
redemption price equal to 110.25% of the
principal amount thereof, plus accrued
and unpaid interest (if any) to the date
of redemption. See "Description of the
Exchange Notes -- Optional Redemption."
Change of Control .................... Upon the occurrence of a Change of
Control, each holder of the Exchange
Notes may require the Company to
repurchase the Exchange Notes held by
such holder at 101% of the principal
amount thereof plus accrued and unpaid
interest (if any) to the date of
repurchase. See "Description of the
Exchange Notes -- Repurchase at the
Option of Holders -- Change of Control."
Guarantees, Security Therefor
and Ranking Thereof .................. The Exchange Notes will be fully and
unconditionally guaranteed (the "Parent
Guarantee") on a senior subordinated
basis by Allied. Allied's obligations
under such Parent Guarantee will be
fully and unconditionally guaranteed on
a senior subordinated basis by Allied
Finance (the "Allied Finance
Guarantee"). The Exchange Notes will
also be fully and unconditionally
guaranteed by the existing Restricted
Subsidiaries (as defined herein) of the
Company other than Allied Insurance (as
defined herein) and Med Track (as
defined herein) and the Company will
covenant to cause any future Restricted
Subsidiaries to fully and
unconditionally guarantee the Exchange
Notes, in each case jointly and
severally on a senior subordinated basis
and subject to limitations intended to
prevent such guarantees
6
<PAGE> 9
from constituting a fraudulent
conveyance under applicable law (the
"Subsidiary Guarantees"); (the
Subsidiary Guarantees, Parent Guarantee
and Allied Finance Guarantee are
collectively referred to as the "Senior
Subordinated Guarantees"); and (Allied,
Allied Finance and the Restricted
Subsidiaries, other than Allied
Insurance and Med Track, are
collectively referred to as the
"Guarantors").
The Senior Subordinated Guarantees will
be senior subordinated obligations of
the Guarantors and will be subordinate
in right of payment to the prior payment
in full of all Senior Debt of the
Guarantors to substantially the same
extent as the Exchange Notes are
subordinated to Senior Debt of the
Company.
The Senior Subordinated Guarantees will
be unsecured, except that the Allied
Finance Guarantee will be secured on a
senior subordinated basis by a second
priority lien on the Allied Canada
Debentures.
Ranking .............................. The Exchange Notes will be unsecured and
will rank junior in right of payment to
all existing and future Senior Debt of
the Company. The Exchange Notes will
rank pari passu in right of payment with
all existing and future senior
subordinated Debt of the Company and
senior to any other subordinated Debt of
the Company issued after the Exchange
Offering. See "Description of the
Exchange Notes-- Subordination."
At December 31, 1996, there was
approximately $ million of Senior Debt
of the Company and the Subsidiary
Guarantors outstanding. While the
indenture under which the Exchange Notes
will be issued (the "Indenture") will
limit, subject to certain financial
tests, the amount of additional Debt
that the Company and its Restricted
Subsidiaries can incur, the Indenture
will not restrict the amount of
otherwise permissible indebtedness that
may be incurred as Senior Debt. See
"Description of the Exchange Notes --
Certain Covenants -- Limitation on
Consolidated Debt."
The Exchange Notes will be effectively
subordinated to all existing and future
Debt of Allied Insurance, Med Track and
of the Company's subsidiaries that are
Unrestricted Subsidiaries, and thus not
Subsidiary Guarantors, and would be so
subordinated to all existing and future
Debt of the Subsidiary Guarantors if the
Subsidiary Guarantees were avoided or
subordinated in favor of the Subsidiary
Guarantors' other creditors. See "Risk
Factors -- Subordination; Ranking of
Exchange Notes and Guarantees as
Unsecured Obligations," "--
Substantially All Operations at
Subsidiary Level; Structural
Subordination" and "-- Fraudulent
Conveyance."
Restrictive Covenants................. The Indenture will restrict, among other
things, the ability of the Company and
its Restricted Subsidiaries, (i) to
incur additional Debt, (ii) to pay
dividends and make other distributions,
(iii) to have restrictions on the
ability of any Restricted Subsidiary to
make dividends or other payments to the
Company or any other Restricted
Subsidiary, (iv) to sell assets and to
use the proceeds of asset sales; (v) to
pledge assets, (vi) to sell a minority
interest in a Restricted Subsidiary,
(vii) to merge or consolidate with or
transfer all or substantially all of its
assets to, or to acquire the stock or
assets of, another entity or (viii) to
engage in certain transactions with
affiliates. All of these restrictions,
however, are subject to a number of
important qualifications. See
"Description of the Exchange Notes--
Certain Covenants."
Form and Denomination ................ The Exchange Notes will be fully
registered as to principal and interest
in minimum denominations of $1,000 and
integral multiples thereof. The Exchange
Notes will be initially issued in the
form of one or more global notes and
deposited with a custodian for and
registered in the name of a nominee of
The Depository Trust Company. Exchange
Notes will not be issued in
certificated, fully registered form,
except in the circumstances provided for
in the Indenture. See "Description of
Exchange Notes -- Form, Denomination,
Transfer, Exchange and Book-Entry,
Delivery and Form."
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<PAGE> 10
Registration Rights ....................Under current interpretations of
applicable law by the staff of the
Commission, holders of Exchange Notes
will be permitted to resell such
securities into the public market
without further registration or delivery
of a prospectus, except that any such
holder who is a broker or dealer would
be required to deliver a copy of this
prospectus in connection with any such
resale. The Company has agreed to keep
such prospectus current so as to enable
brokers and dealers to effect this
resales for a period of 90 days
following completion of the Exchange
Offer. Certain holders who participate
in the Exchange Offer will not be
permitted to rely on the interpretation
of the Commission staff. For a
discussion of the requirements that must
be met in order to rely on the
interpretation, see "Description of the
Exchange Notes -- Registration Rights."
Pursuant to an Exchange and Registration
Rights Agreement (the "Registration
Rights Agreement") between the Company
and the Purchasers, in the event the
interpretation of the Commission staff
does not permit the Company to effect
the Exchange Offer and under certain
other circumstances, the Company would
use its best efforts to cause to become
effective a "shelf" registration
statement (the "Shelf Registration
Statement") with respect to the resale
of the Exchange Notes (a "Shelf
Registration") and to keep such Shelf
Registration Statement effective until
the third anniversary of the
effectiveness of the Shelf Registration
Statement. In such event, Holders who
registered their Exchange Notes would be
permitted to resell their Exchange Notes
into the public market, but only if they
delivered a copy of the prospectus
included in the Shelf Registration
Statement in connection with such
resales.
In the event that (i) the Company has
not filed the Shelf Registration
Statement on or before the date on which
such registration statement is required
to be filed pursuant to the Registration
Rights Agreement, or (ii) such Shelf
Registration Statement has not become
effective or been declared effective by
the Commission on or before the date on
which such registration statement is
required to become or be declared
effective pursuant to the Registration
Rights Agreement, or (iii) the Exchange
Offer has not been completed within 45
days after or (iv) the Registration
Statement or any Shelf Registration
Statement required under the
Registration Rights Agreement is filed
and declared effective but shall
thereafter either be withdrawn by the
Company or shall become subject to an
effective stop order issued pursuant to
Section 8(d) of the Securities Act
suspending the effectiveness of such
registration statement (except as
specifically permitted in the
Registration Rights Agreement) without
being succeeded immediately by an
additional registration statement filed
and declared effective (each such event
referred to in clauses (i) through (iv),
a "Registration Default" and each period
during which a Registration Default has
occurred and is continuing, a
"Registration Default Period"), then, as
liquidated damages for such Registration
Default, special interest ("Special
Interest"), in addition to the base
interest that would otherwise accrue on
the Exchange Notes, shall accrue at a
per annum rate of 0.25% for the first 90
days of the Registration Default Period,
at a per annum rate of 0.50% for the
second 90 days of the Registration
Default Period, at a per annum rate of
0.75% for the third 90 days of the
Registration Default Period and at a per
annum rate of 1.0% thereafter for the
remaining portion of the Registration
Default Period. See "Description of the
Exchange Notes -- Registration Rights."
For additional information regarding the Exchange Notes, see "Certain
Federal Income Tax Consequences" and "Description of the Exchange Notes."
RISK FACTORS
Holders of Notes should consider carefully all of the information set
forth in this Prospectus and, in particular, the information set forth under
"Risk Factors" before making any decision regarding tendering their Notes
pursuant to the Exchange Offer and receiving Exchange Notes.
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<PAGE> 11
RISK FACTORS
In addition to the other information in this Prospectus the following
factors should be considered carefully in evaluating an investment in the
Exchange Notes offered by this Prospectus, including information under
"Disclosure Regarding Forward Looking Statements."
SUBSTANTIAL LEVERAGE; ABILITY TO SERVICE DEBT
The Company has substantial indebtedness with significant debt service
requirements and is highly leveraged. At December 31, 1996, the Company's
consolidated long-term debt are approximately $_____ million and stockholders'
equity are approximately $_____ million. The degree to which the Company is
leveraged has important consequences, including the following: (i) the ability
of the Company to obtain additional financing in the future, whether for working
capital, capital expenditures, acquisitions or other purposes, may be impaired,
(ii) a substantial portion of the Company's cash flow from operations is
required to be dedicated to the payment of principal and interest on its debt,
thereby reducing funds available to the Company for other purposes, (iii) the
Company's flexibility in planning for or reacting to changes in market
conditions may be limited, (iv) the Company may be more vulnerable in the event
of a downturn in its business, and (v) to the extent of the Company's
outstanding debt under its Senior Credit Facility at variable rates that have
not been hedged, the Company will be vulnerable to increases in interest rates.
At December 31, 1996, approximately $_____ million in aggregate borrowings were
outstanding under the Senior Credit Facility (as defined herein) and available
borrowings thereunder were approximately $_____ million. All borrowings under
the Senior Credit Facility will mature during the years 2002 through 2005. The
Company intends to use approximately $500 million of the proceeds of the
Canadian Sale to reduce its outstanding indebtedness under the Senior Credit
Facility. See "Recent Developments."
The ability of the Company to meet its debt service obligations,
including with respect to the Exchange Notes, will depend on the future
operating performance and financial results of the Company, which will be
subject in part to factors beyond the control of the Company. Although the
Company believes that its cash flow will be adequate to meet its interest
payments, there can be no assurance that the Company will continue to generate
earnings in the future sufficient to cover its fixed charges. If the Company is
unable to generate earnings in the future sufficient to cover its fixed charges
and is unable to borrow sufficient funds under either the Senior Credit Facility
or from other sources, it may be required to refinance all or a portion of its
existing debt or to sell all or a portion of its assets. There can be no
assurance that a refinancing would be possible, nor can there be any assurance
as to the timing of any asset sales or the proceeds which the Company could
realize therefrom. In addition, the terms of certain of its debt restrict the
Company's ability to sell assets and the Company's use of the proceeds
therefrom.
Allied derives substantially all its revenues from the operations of the
Company. It is unlikely that Allied would be able to meet its obligations under
the Parent Guarantee if the Company were unable to meet its debt service
obligations with respect to the Exchange Notes.
If for any reason, including a shortfall in anticipated operating
results or proceeds from asset sales, the Company were unable to meet its debt
service obligations, it would be in default under the terms of certain of its
debt. In the event of such a default, the holders of such debt could elect to
declare all of such debt immediately due and payable, including accrued and
unpaid interest, and to terminate their commitments (if any) with respect to
funding obligations under such debt. In addition, such holders could proceed
against any collateral which, in the case of certain debt, consists of the
capital stock of the Company's subsidiaries and substantially all of the assets
of the Company. Any default with respect to any of the Company's debt could
result in a default under other debt or result in the bankruptcy of the Company.
INTEGRATION OF LSW SUBSIDIARIES
In December 1996, the Company acquired the solid waste management
business (the "LSW Subsidiaries") of Laidlaw. The LSW Subsidiaries represented a
substantial increase in the scope of the Company's business. The LSW
Subsidiaries' revenues for the year ended August 31, 1996 were approximately
$501 million, giving effect to the Canadian Sale, and the revenues generated by
the operations of the Company during the year ended December 31, 1995 were
approximately $218 million. Successful integration of the LSW Subsidiaries will
depend primarily on the Company's ability to manage the LSW Subsidiaries'
operations and to eliminate redundancies and excess costs. There can be no
assurance that the Company will
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<PAGE> 12
successfully integrate the LSW Subsidiaries and any failure or any inability to
do so may have a material adverse effect on the Company's results of operations
and financial condition. In addition, the Company expects to realize certain
financial benefits and operational efficiencies as a result of the Laidlaw
Acquisition. Realization and timing of such financial benefits and operational
efficiencies could be affected by a number of factors beyond the Company's
control, such as general economic conditions, increased operating costs, the
response of competitors or customers and regulatory developments. There can be
no assurance that the Company will achieve all or any portion of the expected
financial benefits and operational efficiencies.
The integration and consolidation of the LSW Subsidiaries will require
substantial management time and financial and other resources. While the Company
believes that it has sufficient financial and management resources to accomplish
the rationalization and integration of the LSW Subsidiaries, there can be no
assurances in this regard or that the Company will not experience difficulties
with customers, personnel or operations.
CAPITAL REQUIREMENTS AND LIMITED WORKING CAPITAL
After consummation of the Laidlaw Acquisition and the Canadian Sale, the
Company intends to fund its cash needs through cash flow from operations and
borrowings under the Senior Credit Facility. Because of the capital intensive
nature of the solid waste industry, the Company may use amounts in excess of the
cash generated from operations to retire and service debt, fund acquisitions,
landfill development and capital expenditures. The Company also intends to enter
into master equipment lease facilities relating to the financing of the
acquisition of trucks and containers. A substantial portion of the Company's
available cash will be required to be applied to service the indebtedness
incurred to finance the Laidlaw Acquisition, which is expected to include
approximately $140 million in annual principal and interest payments (after
giving effect to the payment of $500 million on the Senior Credit Facility after
the Canadian Sale). During calendar year 1997 (after giving effect to the
Canadian Sale), the Company also expects to spend approximately $130 million for
capital, closure and post-closure, and remediation expenditures and expects to
provide approximately $221.6 million in financial assurance obligations related
to its landfill operations. Amounts expended on capital expenditures and
financial assurance obligations will increase as a result of any acquisitions or
expansions of the Company's operations. As a result of these capital
requirements, the Company may periodically have low levels of working capital or
be required to finance working capital deficits.
Further regulatory action by federal, state and local governments could
accelerate expenditures for closure and post-closure monitoring and obligate the
Company to spend sums in addition to those presently reserved for such purposes.
These factors, together with the other factors discussed above, could
substantially increase the Company's operating costs and impair the Company's
ability to invest in its facilities.
The Company's ability to make scheduled payments of principal of, or to
pay interest on, or to refinance its indebtedness (including the Exchange Notes)
depends on its future performance, which, to a certain extent, is subject to
general economic, financial, competitive, legislative, regulatory and other
factors beyond its control. One of the primary factors impacting the Company's
future performance will be its ability to integrate the assets acquired in the
Laidlaw Acquisition after the Canadian Sale, and to reduce redundancies and
excess costs. These operations are significantly larger than the Company's
previous operations and represent a substantial increase in the scope of the
Company's business. Based upon the current level of operations and anticipated
growth, management of the Company believes that available cash flow, together
with available borrowing under the Senior Credit Facility and other sources of
liquidity, will be adequate to meet the Company's anticipated future
requirements for working capital, letters-of-credit, capital expenditures and
scheduled payments of principal of, and interest on debt incurred under the
Senior Credit Facility, and interest on the Notes. However, the principal
payments at maturity on the Notes may require refinancing. In addition, the
Company may consider the divestiture of certain of its assets to retire its debt
under the Senior Credit Facility. There can be no assurance that the Company's
business will generate sufficient cash flow from operations or that future
financings will be available in an amount sufficient to enable the Company to
service its indebtedness, including the Notes, or to make necessary capital
expenditures, or that any refinancing would be available on commercially
reasonable terms or at all. Additionally, depending on the timing, amount and
structure of any future acquisitions and the availability of funds under the
acquisition facility under the Senior Credit Facility, the Company may need to
raise additional capital to fund the acquisition and integration of additional
solid waste businesses. There can be no assurance that the Company will be able
to secure such additional funding on favorable terms, if at all.
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<PAGE> 13
LIMITED OPERATING HISTORY IN REGARD TO SIGNIFICANT ASSETS
The Company has a limited operating history with regard to a significant
portion of its operations. During 1996, the Company acquired 21 companies in
addition to the LSW Subsidiaries, which collectively comprised approximately
$_____ million or _____% of the Company's revenues in 1996 and approximately
$______ million or ____% of the Company's assets at December 31, 1996. The
financial position and results of operations of the Company will depend to a
large extent on the Company's ability to integrate these acquired operations
effectively and to realize expected financial benefits and operational
efficiencies. There can be no assurance that the Company's efforts to integrate
these acquired operations will be effective, or that expected financial benefits
and operational efficiencies will be realized. Failure to effectively integrate
acquired operations could have an adverse effect on the Company's future results
of operations. As the Company continues to pursue its acquisition strategy in
the future, its financial position and results of operations may fluctuate
significantly from period to period.
RISKS ASSOCIATED WITH THE COMPANY'S STRATEGY; POTENTIAL DIFFICULTY IN OBTAINING
SUITABLE LANDFILLS, COLLECTION OPERATIONS, TRANSFER STATIONS AND PERMITS
The Company's strategy depends on its ability to identify and acquire
appropriate landfills, collection operations and transfer stations. There can be
no assurance that the Company will be able to locate appropriate acquisition
candidates, that any identified candidates will be acquired or that acquired
operations will be integrated effectively or prove profitable. Completion of an
acquisition requires the expenditure of sizeable amounts of capital and the
competition among companies pursuing an acquisition strategy may increase
capital requirements. The Company could be forced to alter its strategy in the
future if such candidates become unavailable or too costly. In addition,
obtaining permits to operate non-hazardous waste landfills has become
increasingly difficult and expensive, often taking a number of years to obtain,
requiring numerous hearings and compliance with zoning, environmental and other
regulatory measures, and often being subject to resistance from citizen or other
groups. There can be no assurance that the Company will be successful in
obtaining the permits it requires, and an inability to receive such permits
could have an adverse effect on the Company's future results of operations. In
some areas, suitable land may be unavailable for new landfill sites. There can
be no assurance that the Company will be successful in obtaining new landfill
sites or expanding the permitted capacity of its current landfills once its
landfill capacity has been consumed. In such event, the Company could be forced
to dispose of collected waste at landfills operated by its competitors, which
could have an adverse effect on the Company's landfill revenues and collection
expenses.
RISK OF COMPETITION FROM OTHER COMPANIES AND MUNICIPALITIES; LANDFILL
ALTERNATIVES
The non-hazardous solid waste industry is led by four large national
waste management companies, one of which is the Company, and includes numerous
regional and local companies, all of which contribute to the high level of
competition that characterizes the industry. Some of these companies have
considerably greater financial and operational resources than the Company. In
addition, cities and counties that operate their own waste collection and
disposal facilities often enjoy the benefits of tax-exempt financing and may
control the disposal of waste collected within their jurisdictions.
Alternatives to landfill disposal, such as recycling and composting, are
increasingly being used, and incineration continues to be utilized in some
markets in which the Company operates. There has also been an increasing trend
at the state and local levels to mandate waste reduction at the source and to
prohibit the disposal of certain types of wastes, such as yard wastes, at
landfills. This trend may result in a reduction in the volume of waste going to
landfills in certain areas, which may affect the Company's ability to operate
its landfills at their full capacity and/or affect the prices that can be
charged for landfill disposal services. In addition, most of the states in which
the Company operates landfills have adopted plans or requirements that set goals
for specified percentages of certain solid waste items to be recycled. These
recycling goals will be phased in over the next few years.
LAIDLAW TAX INDEMNIFICATION
Laidlaw has disclosed to the Company the existence of a tax controversy
(the "Tax Controversy") in the amount of more than $385 million with the United
States Internal Revenue Service (the "IRS") involving the consolidated U.S.
federal income tax liability for the fiscal years 1986 through 1991 of the
members of an affiliated group of corporations (the "LTI U.S. Consolidated Tax
Group") within the meaning of Section 1504(c) of the Internal Revenue Code
("IRC"), of which Laidlaw Transportation, Inc. ("LTI") is the common parent
corporation (which includes LTI, those LSW Subsidiaries which are
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<PAGE> 14
incorporated in the U.S. (the "LSW U.S. Subsidiaries"), and other U.S.
subsidiaries of LTI which will not be acquired in the Laidlaw Acquisition). The
LTI U.S. Consolidated Tax Group has also received notice that fiscal years 1992,
1993 and 1994 will be examined regarding this issue. Under Treasury Regulations
promulgated under Section 1502 of the IRC, each member of the LTI U.S.
Consolidated Tax Group including each LSW U.S. Subsidiary, is or could be
severally liable for United States federal income tax liabilities of the entire
LTI U.S. Consolidated Tax Group, including all amounts at issue in the Tax
Controversy which are ultimately determined to be owed.
The Company has obtained an indemnity from Laidlaw and LTI (the "Laidlaw
Sellers") which covers the amounts at issue in the Tax Controversy for which any
LSW U.S. Subsidiary may ultimately be found liable. Further, the Laidlaw Sellers
and the Company have entered into an agreement (the "Setoff Agreement"), under
which the Laidlaw Sellers will agree that if the Tax Controversy results in any
damage, liability or expense to any LSW U.S. Subsidiary, and if the Laidlaw
Sellers fail to indemnify the Company against all such damages, liabilities or
expenses within 30 days of a demand for indemnification, then the Company may
set off the amount of all such damages, liabilities and expenses against all
amounts then owed by the Company under certain of the Company's debt held by
Laidlaw (the "Laidlaw Debt").
Other than to the extent contemplated in the Setoff Agreement, the
obligation of the Laidlaw Sellers to indemnify the Company in respect of amounts
at issue in the Tax Controversy is a general, unsecured obligation of the
Laidlaw Sellers. The ability of the Laidlaw Sellers to pay and fulfill such
indemnification obligation, to the extent it exceeds any amounts then owing to
Laidlaw under the Laidlaw Debt, will depend on the financial condition of the
Laidlaw Sellers at the time of any required performance of such obligation, as
to which the Company has no assurance.
LACK OF PUBLIC MARKET FOR THE EXCHANGE NOTES; RESTRICTIONS ON RESALE
There is no existing trading market for the Exchange Notes, and there
can be no assurance regarding the future development of a market for the
Exchange Notes, or the ability of the holders of the Exchange Notes to sell
their Exchange Notes, or the price at which such holders may be able to sell
their Exchange Notes. If such a market were to develop, the Exchange Notes,
could trade at prices that may be higher or lower than the initial offering
price depending on many factors, including prevailing interest rates, the
Company's operating results and the market for similar securities. Each of
Goldman, Sachs & Co., Citicorp Securities, Inc. and CS First Boston, Inc. (the
"Initial Purchasers") has advised the Company that it intends to make a market
in the Exchange Notes. The Initial Purchasers are not obligated to do so,
however, and any market making with respect to the Exchange Notes may be
discontinued at any time without notice. Therefore, there can be no assurance as
to the liquidity of any trading market for the Exchange Notes or that an active
trading market for the Exchange Notes will develop. The Company does not intend
to apply for listing or quotation of the Exchange Notes on any securities
exchange or stock market.
Historically, the market for non-investment grade debt has been subject
to disruptions that have caused substantial volatility in the prices of such
securities. There can be no assurance that the market for the Exchange Notes
will not be subject to similar disruptions. Any such disruptions may have an
adverse effect on holders of the Exchange Notes.
SUBORDINATION; RANKING OF THE EXCHANGE NOTES AND GUARANTEES AS UNSECURED
OBLIGATIONS
The Exchange Notes and the Senior Subordinated Guarantees will be
subordinated in right of payment to all existing and future Senior Debt of the
Company and the Guarantors, will rank pari passu in right of payment with all
unsecured senior subordinated debt and all unsecured senior subordinated
guarantees of the Company and the Guarantors, and will rank senior in right of
payment to any future debt of the Company and the Guarantors that may be
subordinated thereto. Upon any payment or distribution of assets of the Company
to creditors upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshaling of assets and liabilities or
any bankruptcy, insolvency or similar proceedings of the Company, the holders of
Senior Debt will be entitled to receive payment in full of the principal of (and
premium, if any) and interest on such Senior Debt, including all amounts due or
to become due on all Senior Debt, or provision will be made for payment in cash
or cash equivalents or otherwise, before the Holders of Notes are entitled to
receive any payments, subject to certain exceptions.
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<PAGE> 15
The Exchange Notes and the Senior Subordinated Guarantees will be
effectively subordinated in right of payment to all existing and future secured
debt of the Company and the Guarantors, respectively, to the extent of the
collateral securing such debt.
At December 31, 1996, there was approximately $________ million of
Senior Debt of the Company outstanding, which would have been guaranteed by the
Guarantors on a senior basis. While the Indenture will limit, subject to certain
financial tests, the amount of additional debt that the Company and its
Restricted Subsidiaries can incur, there is no limitation on the amount of
otherwise permissible indebtedness that may be incurred as Senior Debt.
SUBSTANTIALLY ALL OPERATIONS AT SUBSIDIARY LEVEL; STRUCTURAL SUBORDINATION
The Company will hold substantially all of its assets and conduct
substantially all of its operations through its subsidiaries. The Company thus
derives substantially all of its operating income and cash flow from its
subsidiaries and must rely upon distributions from its subsidiaries to generate
the funds necessary to meet its obligations, including the payment of principal
of and interest on the Exchange Notes. Although the Indenture generally
prohibits the Company from permitting its Restricted Subsidiaries to allow
restrictions on their ability to pay dividends and other amounts to the Company,
any such restrictions could materially and adversely affect the ability of the
Company to service and repay its existing debt, including the Exchange Notes.
The Exchange Notes are effectively subordinated to all existing and
future indebtedness and other liabilities of the Company's subsidiaries that are
Unrestricted Subsidiaries, and thus not Guarantors, and would be so subordinated
to all existing and future indebtedness of the Guarantors if the Senior
Subordinated Guarantees were avoided or subordinated in favor of the Guarantors'
other creditors.
FRAUDULENT CONVEYANCE
The Senior Subordinated Guarantees may be subject to review under
federal or state fraudulent transfer law. To the extent that a court were to
find that (x) the Senior Subordinated Guarantees were incurred by any Guarantor
with intent to hinder, delay or defraud any present or future creditor, or a
Guarantor contemplated insolvency with a design to prefer one or more creditors
to the exclusion in whole or in part of others, or (y) any Guarantor did not
receive fair consideration or reasonably equivalent value for issuing its Senior
Subordinated Guarantees and any Guarantor (i) was insolvent, (ii) was rendered
insolvent by reason of the issuance of the Senior Subordinated Guarantees, (iii)
was engaged or about to engage in a business or transaction for which the
remaining assets of a Guarantor constituted unreasonably small capital to carry
on its business or (iv) intended to incur, or believed that it would incur,
debts beyond its ability to pay such debts as they matured, a court could avoid
or subordinate the Senior Subordinated Guarantees in favor of a Guarantor's
creditors. If the Senior Subordinated Guarantees are avoided or subordinated,
payments of principal and interest on the Exchange Notes generally would be
subject to the prior payment in full of all indebtedness of the Guarantors.
Among other things, a legal challenge of the Senior Subordinated Guarantees on
fraudulent conveyance grounds may focus on the benefits, if any, realized by a
Guarantor as a result of the issuance by the Company of the Exchange Notes. The
extent (if any) to which a particular Guarantor may be deemed to have received
such benefits may depend on the Company's use of the Note Offering proceeds,
including the extent (if any) to which such proceeds or benefits therefrom are
contributed to the Guarantor. The measure of insolvency for purposes of the
foregoing will vary depending on the law of the applicable jurisdiction.
Generally, however, an entity would be considered insolvent if the sum of its
debts (including contingent or unliquidated debts) is greater than all of its
property at a fair valuation or if the present fair saleable value of its assets
is less than the amount that will be required to pay its probable liability
under its existing debts as such debts become absolute and matured. Based upon
financial and other information currently available to it, the Company presently
believes that the Senior Subordinated Guarantees are being incurred for proper
purposes and in good faith, and that the Guarantors (i) are solvent and will
continue to be solvent after issuing the Senior Subordinated Guarantees, (ii)
will have sufficient capital for carrying on their business after such issuance
and (iii) will be able to pay their debts as they mature. There can be no
assurance, however, that a court would necessarily agree with these conclusions,
or determine that any particular Guarantor received fair consideration or
reasonably equivalent value for issuing its Senior Subordinated Guarantee.
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POTENTIAL INABILITY TO EFFECT REPURCHASE UPON CHANGE OF CONTROL
The Indenture requires the Company, in the event of a Change of Control,
to make an offer to purchase all outstanding Exchange Notes at a price equal to
101% of the principal amount thereof, plus accrued interest to the date of
repurchase. The Senior Credit Facility restricts such a purchase and such an
offer requires the approval of the lenders thereunder. Accordingly, the right of
the holders of the Exchange Notes to require the Company to repurchase the
Exchange Notes may be of limited value if the Company cannot obtain the required
approval under the Senior Credit Facility. There can be no assurance that the
Company will have the financial resources necessary to purchase the Exchange
Notes upon a Change of Control. Failure to offer to repurchase the Exchange
Notes under such circumstances, however, would constitute an event of default
under the Indenture.
RESTRICTIONS IMPOSED BY THE SENIOR CREDIT FACILITY AND THE INDENTURE
The Senior Credit Facility and the Indenture will contain a number of
significant covenants that, among other things, will restrict the ability of the
Company to dispose of assets, incur additional indebtedness, incur liens on
property or assets, repay other indebtedness, pay dividends, enter into certain
investments or transactions, repurchase or redeem capital stock, engage in
mergers or consolidations, or engage in certain transactions with subsidiaries
and affiliates and otherwise restrict corporate activities. There can be no
assurance that such restrictions will not adversely affect the Company's ability
to finance its future operations or capital needs or engage in other business
activities that may be in the interest of the Company. In addition, the Senior
Credit Facility will also require the Company to maintain compliance with
certain financial ratios. The ability of the Company to comply with such ratios
may be affected by events beyond the Company's control. A breach of any of these
covenants or the inability of the Company to comply with the required financial
ratios could result in a default under the Senior Credit Facility. In the event
of any such default, the lenders under the Senior Credit Facility could elect to
declare all borrowings outstanding under the Senior Credit Facility, together
with accrued interest and other fees, to be due and payable, to require the
Company to apply all of its available cash to repay such borrowings or to
prevent the Company from making debt service payments on the Exchange Notes. If
the Company were unable to repay any such borrowings when due, the lenders could
proceed against their collateral. If the indebtedness under the Senior Credit
Facility or the Exchange Notes were to be accelerated, there can be no assurance
that the assets of the Company would be sufficient to repay such indebtedness in
full.
RELIANCE ON MANAGEMENT
The Company will rely significantly on the services of its senior
management team. The Company could be adversely affected if any member of the
senior management team were unwilling or unable to continue in the Company's
employ. The Company is expanding the staff in its executive offices to support
the new operations associated with the Laidlaw Acquisition. There can be no
assurance that the Company will be successful in locating, hiring or retaining
qualified personnel.
IMPACT OF ADVERSE WEATHER CONDITIONS
The collection and landfill operations of the Company could be adversely
affected by protracted periods of inclement weather which delay the development
of landfill capacity, the transfer of waste or reduce the volume of waste
generated. There can be no assurance that protracted periods of inclement
weather will not have a material adverse effect on the Company's future results
of operations.
COST OF COMPLIANCE WITH ENVIRONMENTAL REGULATIONS; RISK OF FUTURE LITIGATION
The scope and stringency of laws and regulations designed to protect the
environment have increased dramatically. Compliance with the evolving and
expanding regulatory requirements, including the adoption in October 1991 of
Subtitle D regulations ("Subtitle D") pursuant to the Resource Conservation and
Recovery Act of 1976, as amended ("RCRA"), has been and will continue to be
costly. Rigorous regulatory standards require waste management companies to
enhance or replace equipment and to modify landfill operations or, in some
cases, to close landfills. There can be no assurance that the Company will be
able to implement price increases sufficient to offset the cost of complying
with these standards. In addition, environmental regulatory changes could
accelerate expenditures for closure and post-closure monitoring at solid waste
facilities and obligate the Company to spend sums in addition to those presently
reserved for such purposes. These factors could increase
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substantially the Company's operating costs as well as the possibility of the
impairment of the Company's investment in its facilities.
In addition to the costs of complying with environmental regulations,
the Company will continue to be involved in legal proceedings in the ordinary
course of business. Government agencies may seek to impose fines on the Company
for alleged failure to comply with laws and regulations or to revoke or to deny
the renewal of, the Company's permits and licenses. In addition, governmental
agencies, as well as surrounding landowners, may assert claims against the
Company alleging environmental damage or violations of permits and licenses
pursuant to which the Company operates. Citizens' groups have become
increasingly active in challenging the grant or renewal of permits and licenses,
and responding to such challenges has further increased the costs associated
with permitting new facilities or expanding current facilities. A significant
judgment against the Company, the loss of a significant permit or license or the
imposition of a significant fine could have a material adverse effect on the
Company's financial condition.
Certain of the Company's waste disposal operations traverse state
boundaries. Such operations could be adversely affected if the federal
government or a state in which a landfill is located limits or prohibits,
imposes discriminatory fees on, or otherwise seeks to discourage disposal,
within state boundaries, of waste collected outside of the state.
Legislation was passed by the United States Senate in 1995, but not
enacted into law, which would have allowed individual states to prohibit the
disposal of out-of-state waste or to limit the amount of out-of-state waste that
could be imported for disposal and would require states, under certain
circumstances, to reduce the amount of waste exported to other states. If this
or similar legislation is enacted into law, states in which the Company operates
landfills could act to limit or prohibit the importation of out-of-state waste.
Such state actions could adversely affect landfills within those states that
receive a significant portion of waste originating from out-of-state.
POTENTIAL UNDISCLOSED, UNINSURED OR UNDERINSURED ENVIRONMENTAL AND ACQUISITION
LIABILITIES
As is typically the case in the solid waste industry, the Company is
able to obtain only very limited environmental impairment insurance regarding
its landfills. An uninsured or underinsured claim of sufficient magnitude could
have a material adverse effect on the Company's financial condition. In
connection with any transaction made by the Company, there may be liabilities
that the Company fails or is unable to discover, including liabilities arising
from non-compliance with environmental laws by prior owners, and for which the
Company, as a successor owner, may be responsible.
HAZARDOUS SUBSTANCES LIABILITY
The Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA"), has been interpreted to impose joint and several
liability on current and former owners or operators of facilities at which there
has been a release or a threatened release of a "hazardous substance" and on
persons who generate, transport or arrange for the disposal of such substances
at the facility. Hundreds of substances are defined as "hazardous" under CERCLA
and their presence, even in minute amounts, can result in substantial liability.
The statute provides for the remediation of contaminated facilities and imposes
costs on the responsible parties. The expense of conducting such a cleanup can
be significant. Notwithstanding its efforts to comply with applicable
regulations and to avoid transporting and receiving hazardous substances, such
substances may be present in waste collected by the Company or disposed of in
its landfills, or in waste collected, transported or disposed of in the past by
acquired companies. As used in this Prospectus, "non-hazardous waste" means
substances, including asbestos, that are not defined as hazardous wastes under
federal regulations.
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DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
This Prospectus contains certain statements that are "Forward Looking
Statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Those statements include, among other things, the
discussions of the Company's business strategy and expectations concerning
market position, future operations, margins, profitability, liquidity and
capital resources, as well as statements concerning the integration of the
operations of the LSW Subsidiaries and achievement of financial benefits and
operational efficiencies in connection therewith. Although the Company believes
that the expectations reflected in such Forward Looking Statements are
reasonable, they can give no assurance that such expectations will prove to be
correct. Generally, these statements relate to business plans or strategies,
projected or anticipated benefits or other consequences of such plans or
strategies, number of acquisitions and projected or anticipated benefits from
acquisitions made by or to be made by the Company, or projections involving
anticipated revenues, expenses, earnings, levels of capital expenditures or
other aspects of operating results. All phases of the operations of the Company
are subject to a number of uncertainties, risks and other influences, many of
which are outside the control of the Company and any one of which, or a
combination of which, could materially affect the results of the Company's
operations and whether the Forward Looking Statements made by the Company
ultimately prove to be accurate. Important factors that could cause actual
results to differ materially from the Company's expectations are disclosed in
this section and in "Risk Factors."
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THE COMPANY
The Company is the fourth largest solid waste management company in the
United States, by revenues. The Company serves approximately 1.8 million
customers through operations in 22 states. The Company has an extensive network
of 32 transfer stations, 20 recycling facilities and 46 landfills. The Company's
strategy is to develop vertically-integrated operations centered around
landfills that are owned or operated by the Company in the markets it serves.
RECENT DEVELOPMENTS
On December 30, 1996, the Company completed the acquisition of
substantially all of the non-hazardous solid waste management business conducted
by Laidlaw in the United States and Canada (the "Laidlaw Acquisition"), for
consideration comprised of $1.2 billion cash, 14.6 million shares of the
Company's common stock, warrants to acquire 20.4 million shares of common stock,
and two junior subordinated debentures with an aggregate face amount of $318
million (the "Allied Canada Debentures"). The cash consideration was financed
from the proceeds of the Senior Credit Facility and the sale of the Notes.
On March ___, 1997, the Company completed the sale of substantially all
of the Canadian operations of the Company (the "Canadian Sale") for $518 million
in cash. The Company acquired the Canadian operations in the Laidlaw Acquisition
in December 1996. Under the terms of the Canadian Sale, USA Waste acquired 41
collection companies, 10 recycling facilities and seven landfills in Canada. The
Company used the proceeds from the Canadian Sale to pay down approximately $500
million in debt under the Senior Credit Facility. Unless otherwise indicated,
all references to the Company and its operations contained herein give effect to
the Laidlaw Acquisition and the Canadian Sale.
INDUSTRY TRENDS
According to the National Solid Waste Management Association and Waste
Age Magazine, the North American solid waste industry was estimated to have had
revenues of more than $32 billion in 1995. The industry is highly fragmented
with the four largest companies accounting, in 1995, for approximately 30% of
revenues, seven mid-sized public companies accounting for approximately 4% of
revenues, and several thousand municipalities and independent collection firms
accounting for the remainder. The solid waste management industry has been
affected significantly by increased regulation of disposal activities and to a
lesser extent collection activities also, have been affected. In October 1991,
the Environmental Protection Agency ("EPA") adopted new regulations pursuant to
Subtitle D ("Subtitle D") of the Resource Conservation and Recovery Act of 1976,
as amended ("RCRA") governing the disposal of non-hazardous solid waste. These
regulations led to a variety of requirements applicable to landfill disposal
sites, including the construction of liners and the installation of leachate
collection systems, groundwater monitoring systems and methane gas recovery
systems. The regulations also require enhanced control systems to monitor more
closely the waste streams being disposed at landfills, extensive post-closure
monitoring of sites and financial assurances that landfill operators will be
able to comply with the stringent regulations. The rising costs associated with
increasingly stringent industry regulations have tended to promote consolidation
and acquisition activity within the industry.
The Company believes that these trends will continue and are the result
of several factors:
(1) Subtitle D and similar state regulations have significantly
increased the amount of capital and technical expertise
required to own and operate a landfill. As a result, many
landfill operators that lack the necessary capital or
expertise are electing to sell their landfills as an
alternative to closing them;
(2) a number of municipalities are electing to privatize their
municipal landfills as an alternative to funding the
changes to such landfills required by Subtitle D and
related state regulations; and
(3) as a result of heightened sensitivity to environmental
conditions in many communities, it is becoming increasingly
desirable for solid waste management companies to provide
waste recycling programs in addition to conventional
collection and disposal services.
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These developments, as well as more stringent bonding requirements being imposed
on solid waste management companies by various municipalities, have increased
the amount of capital generally required for solid waste management operations,
causing smaller companies that lack the requisite capital to sell their
operations to better-capitalized companies.
BUSINESS STRATEGY
The Company's strategy is to build a vertically-integrated solid
waste management company with a strong presence in select markets. The Company
plans to implement this strategy by (i) establishing a market presence generally
based on its landfills; (ii) increasing volume in its markets through "tuck-in"
acquisitions of collection companies and marketing to new customers; (iii)
providing a high level of customer service; (iv) competitively pricing its
services based on the particular circumstances of each market; and (v)
continuing to control costs and reduce corporate overhead as a percentage of
revenues. The Company believes that its strategy to build vertically-integrated
operations will provide the Company with competitive advantages in its targeted
regional markets.
The Company pursues acquisitions in geographic areas characterized by
one or more of the following criteria: (i) the availability of permitted and
underutilized landfill capacity located either close to or outside of, but
within economic range of, a major population center, (ii) disposal fees that
justify necessary transportation expenses, (iii) near or medium-term scheduled
closures of landfills near such a population center, (iv) a shift in landfill
ownership from public to private and (v) rural landfills that are likely to
provide the opportunities in a local market.
The Company has adopted the following four-step operating program in
executing its business strategy:
(1) Landfill Acquisitions. Once the Company identifies an area
that qualifies under its target market criteria, the
Company seeks to establish a market presence, generally by
acquiring one or more landfills in that area that can be
accessed economically from the metropolitan center or from
the regional market area, either through direct hauling or
through strategically located transfer stations. In
evaluating a landfill acquisition, the Company considers,
among others, the following factors: (i) current disposal
costs together with transportation costs to the targeted
landfill relative to transportation and disposal costs of
potential competitors, (ii) expected landfill life, (iii)
opportunities for landfill expansion, and (iv) projected
short-term ability to secure an acceptable level of
disposal volume.
(2) Secure Captive Waste Volumes. The Company seeks to build a
market presence and increase the utilization of the
landfill by securing captive waste streams, which includes
developing and acquiring transfer stations, entering into
waste collection contracts and acquiring waste collection
companies. Generally, the Company pursues the acquisition
of collection companies that: (i) have well-established
residential or commercial collection routes and accounts,
(ii) own and operate transfer stations, or (iii) do not own
landfills and are vulnerable to volatile disposal pricing,
which the Company believes it can minimize through landfill
ownership.
(3) "Tuck-in" Acquisitions. The Company acquires service
rights, obligations, machinery and equipment in "tuck- in"
acquisitions of collection companies to: (i) increase the
waste stream directed to its landfills, (ii) maximize its
market presence, and (iii) take advantage of economies of
scale which should increase earnings and return on capital.
(4) Integration of Operations. Immediately following an
acquisition, the Company begins to integrate the acquired
company into its operating and control systems,
internalizing waste previously disposed at third party
landfills to facilities owned or operated by the Company,
establishing an operating plan, implementing the Company's
operating policies and procedures, including the
consolidation and rationalization of routes and pricing,
establishing new banking and cash control procedures,
integrating the acquired company's accounting, data
processing and management reporting systems and appointing
a new board of directors. In many acquisitions, the Company
retains the management of the company it acquires in order
to benefit from the existing management's understanding of
the local market, personal and business contacts, and
goodwill in the community.
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OPERATIONS
COLLECTION. Collection operations involve collecting and transporting
non-hazardous waste from the point of generation to the transfer station or the
site of disposal. Solid waste collection is generally provided under two primary
types of arrangements, depending on the customer being served.
Residential. Residential collection services are performed pursuant
to individual monthly subscriptions directly to households or long-term
contracts with municipal governments that give the Company exclusive rights to
service all or a portion of the homes in such municipalities at established
rates. The Company seeks to obtain municipal contracts which enhance the
efficiency and profitability of the Company's operations as a result of the
density of collection customers within a given area. At the end of the term of
most municipal contracts, the Company will attempt to renegotiate the contract,
and if unable to do so, will rebid the contract on a sealed bid basis.
Residential collection service arrangements with households are made directly
between the Company and the resident. The Company seeks to enter into
residential service arrangements where the route density is high, thereby
creating certain economics of scale. Collection fees are determined by the
Company and the customer based on general competitive and prevailing local
economic conditions such as collection frequency, the type and volume or weight
of the waste collected, the distance to the disposal facility, and cost of
disposal. Residential collection fees are either paid by the municipalities out
of tax revenues or service charges or are paid directly by the residents
receiving the service.
Commercial. The Company provides containerized non-hazardous solid
waste disposal services to a wide variety of commercial and industrial
customers. These customers are provided with containers that are designed to be
lifted mechanically and either emptied into a collection vehicle's compaction
hopper or, in the case of roll-off containers, to be loaded onto the collection
vehicle. The Company's commercial containers generally range in size from one to
eight cubic yards and its roll-off containers generally range in size from 20 to
40 cubic yards. Contracts for commercial containers typically have terms of up
to five years, may not be terminated by the customer prior to the end of the
term and have renewal options. Contracts for roll-off containers may provide for
temporary (such as the removal of waste from a construction site) or ongoing
services. Fees relating to those contracts are determined by general competitive
and prevailing local economic conditions and include other considerations such
as collection frequency, type of equipment furnished, distance traveled to the
disposal site, and the type and volume or weight of the waste collected.
TRANSFER STATIONS. A transfer station is a facility where solid waste
is received from third party and Company owned collection vehicles and then
transferred to and compacted in large, specially-constructed trailers for
transportation to disposal facilities. This consolidation reduces costs by
improving utilization of collection personnel and equipment, and is an
increasingly common procedure in the solid waste management industry. Fees are
generally based upon such factors as the type and volume or weight of the waste
transferred and the transport distance involved. The Company believes that as
increased regulations and public pressure restrict the development of local
landfills in urban and suburban areas, transfer stations will increasingly be
used as an efficient means to transport waste over longer distances to available
landfills.
RECYCLING. In response to increasing awareness by the customer of
environmental concerns and expanding federal and state regulations pertaining to
waste recycling, the Company includes recycling as a component of its integrated
solid waste management plan. Services include curbside collection of recyclable
materials for residential customers, commercial and industrial collection of
recyclable materials, and, to a lesser extent, material recovery/waste
reduction. Recycling fees are generally service based wherein the customer pays
for the cost of removing, processing and disposing of potentially recyclable
materials. In most cases, mixed waste materials are received at an owned or
leased materials recovery facility (MRF) which is often integrated into or
contiguous to a transfer operation. Materials such as paper, cardboard, plastic,
aluminum and other metals are sorted, separated, accumulated, bound or placed in
a container and readied for transportation to a third-party which will reuse the
separated materials. The purchaser generally pays for the materials based on
fluctuating spot-market prices. Material for which there is no market or for
which the market price is insufficient to warrant processing are disposed of at
a landfill or other disposal facility.
LANDFILLS. Solid waste landfills are the primary depositories for
solid waste in the United States. A landfill must be carefully maintained to
meet federal, state and local regulations pursuant to Subtitle D. Maintenance
includes excavation, continuous spreading and compacting of waste, and covering
of waste with earth or other inert material. The cost of transferring
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solid waste to a disposal location places a geographic restriction on solid
waste companies. Access to a disposal facility, such as a landfill, is a
requirement for all solid waste management companies. While access can be
obtained to disposal facilities owned or operated by unaffiliated parties, the
Company believes that it is generally preferable for collection companies to own
or operate their own disposal facilities thereby ensuring access on favorable
terms and the internalization of disposal fees.
MARKETING AND SALES
Each of the Company's districts has a staff responsible for sales and
marketing. The Company's policy is to periodically visit each commercial
account. In addition to calling on existing customers, each salesperson calls
upon potential customers within a specified territory in each service area.
In addition to its sales efforts directed at commercial and
industrial customers, the Company has a municipal marketing coordinator in most
service areas. The municipal marketing coordinators are responsible for
interfacing with each municipality or community to which the Company provides
residential service to assure customer satisfaction. In addition, the municipal
coordinators organize and handle bids for renewal and new municipal contracts in
their service area.
PROPERTY AND EQUIPMENT
The principal fixed assets used by the Company in its collection and
transfer operations are 33 owned or operated transfer/recycling facilities. The
Company operates 46 non-hazardous solid waste landfills.
The Company's principal executive offices are located at 15880
Greenway-Hayden Loop, Suite 100, Scottsdale, Arizona 85260 where it currently
leases approximately 33,000 square feet of office space. The Company also
maintains regional administrative offices throughout the United States.
EMPLOYEES
The Company employs approximately 5,000 persons. Certain employees of
the Company are covered by collective bargaining agreements. The Company
believes that its relations with its employees are satisfactory.
COMPETITION
The non-hazardous waste collection and disposal industry is highly
competitive. The industry is comprised of four national waste companies in
addition to the Company, WMX Technologies, Inc., Browning-Ferris Industries,
Inc. ("BFI"), Republic Industries, Inc., USA Waste Services, Inc. and local and
regional companies of varying sizes and competitive resources such as United
Waste Systems, Inc. and Superior Services, Inc. The Company also competes with
those counties and municipalities that maintain their own waste collection or
disposal operations. These counties and municipalities may have financial
advantages through their access to tax revenues and tax-exempt financing and
their ability to mandate the disposal of waste collected within the jurisdiction
at a municipal landfill. The Company may also experience competition from
companies using alternative methods of managing solid waste streams, such as
incineration.
The solid waste collection and disposal industry is currently
undergoing significant consolidation, and the Company encounters competition in
its efforts to acquire landfills and collection operations. Accordingly, it may
become uneconomical for the Company to make further acquisitions or the Company
may be unable to locate or acquire suitable acquisition candidates at price
levels and on terms and conditions that the Company considers appropriate,
particularly in markets the Company does not already serve.
ENVIRONMENTAL AND OTHER REGULATIONS
The Company is subject to extensive and evolving environmental laws
and regulations. These regulations are administered by the EPA and various other
federal, state and local environmental, zoning, health and safety agencies, many
of which periodically examine the Company's operations to monitor compliance
with such laws and regulations. The Company
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believes that there will be increased regulation and legislation related to the
waste management industry and the Company attempts to anticipate such future
regulatory requirements to ensure compliance.
The Company's operation of landfills subjects it to certain operational,
monitoring, site maintenance, closure, post-closure and other obligations which
could give rise to increased costs for monitoring and corrective measures. In
connection with the Company's acquisition of existing landfills, it is often
necessary to expend considerable time, effort and money to obtain permits
required to increase the capacity of these landfills. Governmental authorities
have the power to enforce compliance with these regulations and to obtain
injunctions or impose civil or criminal penalties in case of violations.
The Company's operations will be subject to extensive regulation,
principally under the following federal statutes:
The Resource Conservation and Recovery Act of 1976, as amended. RCRA
regulates the handling, transportation and disposal of hazardous and
non-hazardous wastes and delegates authority to states to develop programs to
ensure the safe disposal of solid wastes. On October 9, 1991, the EPA
promulgated Solid Waste Disposal Facility Criteria for non-hazardous solid waste
landfills under Subtitle D. Subtitle D includes location standards, facility
design and operating criteria, closure and post-closure requirements, financial
assurance standards and groundwater monitoring as well as corrective action
standards, many of which had not commonly been in place or enforced previously
at landfills. Subtitle D applies to all solid waste landfill cells that received
waste after October 9, 1991, and, with limited exceptions, all landfills were
required to meet these requirements by October 9, 1993. Landfills that were not
in compliance with the requirements of Subtitle D on the applicable date of
implementation were required to close. In addition, landfills that stopped
receiving waste before October 9, 1993 were not required to comply with the
final cover provisions of Subtitle D. Each state must comply with Subtitle D and
was required to submit a permit program designed to implement Subtitle D to the
EPA for approval by April 9, 1993. States may impose requirements for landfill
units that are more stringent than the requirements of Subtitle D. Once a state
has an approved program, it must review all existing landfill permits to ensure
that they comply with Subtitle D.
The Federal Water Pollution Control Act of 1972 (the "Clean Water
Act"), as amended. This act establishes rules regulating the discharge of
pollutants into streams and other waters of the United States (as defined in the
Clean Water Act) from a variety of sources, including solid waste disposal
sites. If runoff from the Company's landfills or transfer stations may be
discharged into surface waters, the Clean Water Act requires the Company to
apply for and obtain discharge permits, conduct sampling and monitoring and,
under certain circumstances, reduce the quantity of pollutants in those
discharges. The permit program has been expanded to include stormwater
discharges from landfills that receive, or in the past received, industrial
waste. In addition, if development may alter or affect "wetlands," a permit may
have to be obtained and certain mitigation measures may need to be undertaken
before such development may be commenced. This requirement is likely to affect
the construction or expansion of many solid waste disposal sites, including some
owned or being developed by the Company. The Clean Water Act provides civil,
criminal and administrative penalties for violations of its provisions.
The Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended. The Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended ("CERCLA") addresses problems created by
the release or threatened release of hazardous substances into the environment.
CERCLA's primary mechanism for remediating such problems is to impose strict,
joint and several liability for cleanup of disposal sites on current owners and
operators of the site, former site owners and operators at the time of disposal,
and waste generators and parties who arranged for disposal at the facility. The
costs of a CERCLA cleanup can be substantial. Liability under CERCLA is not
dependent on the existence or disposal of "hazardous wastes" (as defined under
RCRA), but can also be founded on the existence of even minute amounts of the
more than 700 "hazardous substances" listed by the EPA.
The Clean Air Act, as amended. The Clean Air Act provides for
increased federal, state and local regulation of the emission of air pollutants.
The EPA has construed the Clean Air Act to apply to landfills. In March 1996,
the EPA adopted New Source Performance Standard and Emission Guidelines (the
"Emission Guidelines") for municipal solid waste landfills. These regulations
impose limits on air emissions from solid waste landfills. The Emission
Guidelines propose two sets of emissions standards, one of which is applicable
to all solid waste landfills that commence construction, reconstruction or
modification after May 30, 1991 and another which is applicable to all solid
waste landfills that received waste or had the capacity to receive waste after
November 8, 1987. The Emission Guidelines may be implemented by the states.
These guidelines, combined with the new
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permitting programs established under the recent Clean Air Act amendments, will
likely subject solid waste landfills to significant new permitting requirements
and, in some instances, require installation of methane gas recovery systems.
The Occupational Safety and Health Act of 1970 ("OSHA"), as amended.
OSHA establishes certain employer responsibilities, including maintenance of a
workplace free of recognized hazards likely to cause death or serious injury,
compliance with standards promulgated by the Occupational Safety and Health
Administration, and various recordkeeping, disclosure and procedural
requirements. Various standards, including standards for notices of hazards,
safety in excavation and demolition work, and the handling of asbestos, may
apply to the Company's operations.
Future Federal Legislation. In the future, the Company's collection,
transfer and landfill operations may also be affected by legislation that may be
proposed in the United States Congress that would authorize the states to enact
legislation governing interstate shipments of waste. Such proposed federal
legislation may allow individual states to prohibit the disposal of out-of-state
waste or to limit the amount of out-of-state waste that could be imported for
disposal and would require states, under certain circumstances, to reduce the
amounts of waste exported to other states. If this or similar legislation is
enacted, states in which the Company will operate landfills could act to limit
or prohibit the importation of out-of-state waste. Such state actions could
adversely affect landfills within these states that receive a significant
portion of waste originating from out-of-state.
State Regulation. Each state in which the Company operates has laws
and regulations governing solid waste disposal and water and air pollution and,
in most cases, regulations governing the design, operation, maintenance and
closure of landfills and transfer stations. Management believes that several
states have proposed or have considered adopting legislation that would regulate
the interstate transportation and disposal of waste in their landfills. Many
states have also adopted legislative and regulatory measures to mandate or
encourage waste reduction at the source and waste recycling.
The Company's collection and landfill operations may be affected by
the current trend toward laws requiring the development of waste reduction and
recycling programs. For example, a number of states have recently enacted laws
that will require counties to adopt comprehensive plans to reduce, through waste
planning, composting and recycling or other programs, the volume of solid waste
deposited in landfills within the next few years. A number of states have taken
or propose to take steps to ban or otherwise limit the disposal of certain
wastes, such as yard wastes, beverage containers, newspapers, unshredded tires,
lead-acid batteries and household appliances into landfills.
The Company will implement its own environmental safeguards that
comply with these governmental requirements. Additionally, the Company's policy
will be to obtain an environmental assessment prepared by an independent
environmental consulting firm for all real estate acquired.
LIABILITY INSURANCE AND BONDING
The Company carries general liability, comprehensive property damage,
workers' compensation, employer's liability, directors' and officers' liability
and other coverages it believes are customary to the industry. The Company also
has environmental impairment liability insurance for all of its operating
landfills except one owned and four operated sites. The environmental impairment
liability insurance is in the amount of up to $5 million for the policy term in
excess of a $1 million deductible per claim.
The Company is required to provide certain financial assurances to
governmental agencies under applicable environmental regulations relating to its
landfill and collection operations. These financial assurances include
performance bonds, letters-of-credit, insurance contracts and trust deposits
required principally to secure the Company's estimated landfill closure and
post-closure obligations and collection contracts. The Company expects to be
required to provide approximately $221.6 million in financial assurance
obligations relating to its landfill operations. The Company expects that
financial assurances will increase in the future as the Company acquires and
expands its activities and that a greater percentage of the financial assurances
will be comprised of letters-of-credit.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Notes were sold by the Company on December 5, 1996, and were
subsequently resold to qualified institutional buyers pursuant to Rule 144A
under the Securities Act, to institutional investors that are accredited
investors in a manner exempt from registration under the Securities Act and to
certain persons in transactions outside the United States in reliance on
Regulation S under the Securities Act. In connection with the Note Offering, the
Company entered into the Registration Rights Agreement, which requires, among
other things, that on or before March 1, 1997, the Company (i) file with the SEC
a registration statement under the Securities Act with respect to an issue of
new notes of the Company identical in all material respects to the Notes, (ii)
use their best efforts to cause such registration statement to become effective
under the Securities Act and (iii) upon the effectiveness of that registration
statement, offer to the Holders of the Notes the opportunity to exchange their
Notes for a like principal amount of Exchange Notes, which would be issued
without a restrictive legend and may be reoffered and resold by the holder
without restrictions or limitations under the Securities Act (other than any
such holder that is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act). A copy of the Registration Rights Agreement has been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. The term "Holder" with respect to the Exchange Offer means any person in
whose name the Notes are registered on the books of the Company or any other
person who has obtained a properly completed bond power from the registered
holder.
Because the Exchange Offer is for any and all Notes, the number of
Notes tendered and exchanged in the Exchange Offer will reduce the principal
amount of Notes outstanding. Following the consummation of the Exchange Offer,
Holders of the Notes who did not tender their Notes generally will not have any
further registration rights under the Registration Rights Agreement, and such
Notes will continue to be subject to certain restrictions on transfer.
Accordingly, the liquidity of the market for such Notes could be adversely
affected. The Notes are currently eligible for sale pursuant to Rule 144A
through the PORTAL System of the National Association of Securities Dealers,
Inc. Because the Company anticipates that most holders of Notes will elect to
exchange such Notes for Exchange Notes due to the absence of restrictions on the
resale of Exchange Notes under the Securities Act, the Company anticipates that
the liquidity of the market for any Notes remaining after the consummation of
the Exchange Offer may be substantially limited.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this
Prospectus and in the Letter of Transmittal, the Company will accept any and all
Notes validly tendered and not withdrawn prior to 5:00 p.m. New York City time,
on the Expiration Date. The Company will issue $1,000 principal amount of
Exchange Notes in exchange for each $1,000 principal amount of outstanding Notes
accepted in the Exchange Offer. Holders may tender some or all of their Notes
pursuant to the Exchange Offer. However, Notes may be tendered only in integral
multiples of $1,000.
The form and terms of the Exchange Notes are the same as the form and
terms of the Notes except that (i) the Exchange Notes have been registered under
the Securities Act and hence will not bear legends restricting the transfer
thereof and (ii) the holders of the Exchange Notes generally will not be
entitled to certain rights under the Registration Rights Agreement, which rights
generally will terminate upon consummation of the Exchange Offer. The Exchange
Notes will evidence the same debt as the Notes and will be entitled to the
benefits of the Indenture.
Holders of Notes do not have any appraisal or dissenter's rights
under the General Corporation Law of Delaware or the Indenture in connection
with the Exchange Offer. The Company intends to conduct the Exchange Offer in
accordance with the applicable requirements of the Exchange Act and the rules
and regulations of the SEC thereunder, including Rule 14e-1 thereunder.
The Company shall be deemed to have accepted validly tendered Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering Holders
for the purpose of receiving the Exchange Notes from the Company.
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If any tendered Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any such unaccepted Notes will be returned,
without expense, to the tendering Holder thereof as promptly as practicable
after the Expiration Date.
Holders who tender Notes in the Exchange Offer will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Notes
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than transfer taxes in certain circumstances, in connection with the
Exchange Offer. See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time,
on , 1997, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
To extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral or written notice, followed by a public
announcement thereof no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled expiration date.
The Company reserves the right, in its reasonable judgment, (i) to
delay accepting any Notes, to extend the Exchange Offer or to terminate the
Exchange Offer if any of the conditions set forth below under "-- Conditions"
shall not have been satisfied, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent or (ii) to amend the terms of the
Exchange Offer in any manner. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by a public
announcement thereof. If the Exchange Offer is amended in a manner determined by
the Company to constitute a material change, the Company will promptly disclose
such amendment by means of a prospectus supplement that will be distributed to
the registered Holders, and, depending upon the significance of the amendment
and the manner of disclosure to the registered Holders, the Company will extend
the Exchange Offer for a period of five to ten business days if the Exchange
Offer would otherwise expire during such five to ten business-day period.
If the Company does not consummate the Exchange Offer, or, in lieu
thereof, the Company does not file and cause to become effective the Shelf
Registration Statement within the time periods set forth herein, liquidated
damages will accrue and be payable on the Notes either temporarily or
permanently. See "Description of Exchange Notes -- Registration Rights."
Without limiting the manner in which the Company may choose to make
public announcement of any delay, extension, amendment or termination of the
Exchange Offer, the Company shall have no obligation to publish, advertise or
otherwise communicate any such public announcement, other than by making a
timely release to the Dow Jones News Service.
INTEREST ON EXCHANGE NOTES
The Exchange Senior Subordinated Notes will bear interest from
December 5, 1996, the date of issuance of the Notes that are tendered in
exchange for the Exchange Notes (or the most recent Interest Payment Date to
which interest on such Notes has been paid). Accordingly, holders of Notes that
are accepted for exchange will not receive interest that is accrued but unpaid
on the Notes at the time of tender, but such interest will be payable on the
first Interest Payment Date after the Expiration Date. Interest on the Exchange
Notes will be payable semiannually on each June 1 and December 1, commencing on
June 1, 1997.
PROCEDURES FOR TENDERING
Only a Holder of Notes may tender such Notes in the Exchange Offer.
To tender in the Exchange Offer, a Holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with the Notes
and any other required documents, to the Exchange Agent so as to be received by
the Exchange Agent at the address set forth below prior to 5:00 p.m., New York
City time, on the Expiration Date. Delivery of the Notes may be made by
book-entry transfer in
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accordance with the procedures described below. Confirmation of such book-entry
transfer must be received by the Exchange Agent prior to the Expiration Date.
By executing the Letter of Transmittal, each Holder will make to the
Company the representation set forth below in the second paragraph under the
heading "-- Resale of Exchange Notes."
The tender by a Holder and the acceptance thereof by the Company will
constitute an agreement between such Holder and the Company in accordance with
the terms and subject to the conditions set forth herein and in the Letter of
Transmittal.
THE METHOD OF DELIVERY OF NOTES AND THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF
THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN
OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO
LETTER OF TRANSMITTAL OR NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered Holder promptly and instruct such
registered Holder to tender on such beneficial owner's behalf.
Signatures on the Letter of Transmittal or a notice of withdrawal, as
the case may be, must be guaranteed by an Eligible Institution (as defined
herein) unless the Notes tendered pursuant thereto are tendered (i) by a
registered Holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or
(ii) for the account of an Eligible Institution. In the event that signatures on
a Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantee must be by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the
registered Holder of any Notes listed therein, such Notes must be endorsed or
accompanied by a properly completed bond power, signed by such registered Holder
as such registered Holder's name appears on such Notes with the signature
thereon guaranteed by an Eligible Institution. If the Letter of Transmittal or
any Notes or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and unless waived by the Company, evidence satisfactory to the Company
of their authority to so act must be submitted with the Letter of Transmittal.
The Company understands that the Exchange Agent will make a request
promptly after the date of this Prospectus to establish accounts with respect to
the Notes at the Depository for the purpose of facilitating the Exchange Offer,
and subject to the establishment thereof, any financial institution that is a
participant in the Depository's system may make book-entry delivery of the Notes
by causing the Depository to transfer such Notes into the Exchange Agent's
account with respect to the Notes in accordance with the Depository's procedures
for such transfer. Although delivery of the Notes may be effected through
book-entry transfer into the Exchange Agent's account at the Depository, an
appropriate Letter of Transmittal properly completed and duly executed with any
required signature guarantee and all other required documents must in each case
be transmitted to and received or confirmed by the Exchange Agent at its address
set forth below on or prior to the Expiration Date, or, if the guaranteed
delivery procedures described below are complied with, within the time period
provided under such procedures. Delivery of documents to the Depository does not
constitute delivery to the Exchange Agent.
All questions as to the validity, form, eligibility (including time
of receipt), acceptance of tendered Notes and withdrawal of tendered Notes will
be determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Notes not properly tendered or any Notes the Company's acceptance
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of which would, in the opinion of counsel for the Company, be unlawful. The
Company also reserves the right to waive any defects, irregularities or
conditions of tender as to particular Notes. The Company's interpretation of the
terms and conditions of the Exchange Offer (including the instructions in the
Letter of Transmittal) will be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of Notes must be cured
within such time as the Company shall determine. Although the Company intends to
notify Holders of defects or irregularities with respect to tenders of Notes,
none of the Company, the Exchange Agent or any other person shall incur any
liability for failure to give such notification. Tenders of Notes will not be
deemed to have been made until such defects or irregularities have been cured or
waived. Any Notes received by the Exchange Agents that are not properly tendered
and as to which the defects or irregularities have not been cured or waived will
be returned by the Exchange Agent to the tendering Holders, unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
Expiration Date.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Notes and (i) whose Notes are not immediately
available, (ii) who cannot deliver their Notes, the Letter of Transmittal or any
other required documents to the Exchange Agent or (iii) who cannot complete the
procedures for book-entry transfer, prior to the Expiration Date, may effect a
tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by facsimile transmission, mail or
hand delivery) setting forth the name and address of the Holder, the
certificate number(s) of such Notes and the principal amount of Notes
tendered, stating that the tender is being made thereby and
guaranteeing that, within three New York Stock Exchange trading days
after the Expiration Date, the Letter of Transmittal (or facsimile
thereof), together with the certificate(s) representing the Notes (or
a confirmation of book-entry transfer of such Notes into the Exchange
Agent's account at the Depository) and any other documents required
by the Letter of Transmittal, will be deposited by the Eligible
Institution with the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all
tendered Notes in proper form for transfer (or a confirmation of
book-entry transfer of such Notes into the Exchange Agent's account
at the Depository) and all other documents required by the Letter of
Transmittal, are received by the Exchange Agent within three New York
Stock Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery
will be sent to Holders who wish to tender their Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWALS OF TENDERS
Except as otherwise provided herein, tenders of Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
To withdraw a tender of Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal must (i) specify the name of
the person having deposited the Notes to be withdrawn (the "Depositor"), (ii)
identify the Notes to be withdrawn (including the certificate number(s) and
principal amount of such Notes, or, in the case of notes transferred by
book-entry transfer, the name and number of the account at the Depository to be
credited), (iii) be signed by the Holder in the same manner as the original
signature on the Letter of Transmittal by which such Notes were tendered
(including any required signature guarantees) or be accompanied by documents of
transfer sufficient to have the Trustee with respect to the Notes register the
transfer of such Notes into the name of the person withdrawing the tender and
(iv) specify the name in which any such Notes are to be registered, if different
from that of the Depositor. All questions as to the validity, form and
eligibility (including time or receipt) of such notices will be determined by
the Company, whose determination shall be final and binding on all parties. Any
Notes so withdrawn will be deemed not to have been validly tendered for purposes
of the Exchange Offer and no Exchange Notes will be issued with respect thereto
unless the Notes so withdrawn are validly
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retendered. Any Notes which have been tendered but which are not accepted for
exchange will be returned to the Holder thereof without cost to such Holder as
soon as practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Notes may be retendered by following one of
the procedures described above under "-- Procedures for Tendering" at any time
prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company
shall not be required to accept for exchange, or to exchange Exchange Notes for,
any Notes, and may terminate or amend the Exchange Offer as provided herein
before the acceptance of such Notes, if:
(a) any law, statute, rule, regulation or interpretation by the staff
of the SEC is proposed, adopted or enacted, which, in the reasonable
judgment of the Company, might materially impair the ability of the
Company to proceed with the Exchange Offer or materially impair the
contemplated benefits of the Exchange Offer to the Company; or
(b) any governmental approval has not been obtained, which approval
the Company shall, in its reasonable judgment, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
If the Company determines in its reasonable judgment that any of the
conditions are not satisfied, the Company may (i) refuse to accept any Notes and
return all tendered Notes to the tendering Holders, (ii) extend the Exchange
Offer and retain all Notes tendered prior to the expiration of the Exchange
Offer, subject, however, to the rights of Holders to withdraw such Notes (see
"-- Withdrawals of Tenders") or (iii) waive such unsatisfied conditions with
respect to the Exchange Offer and accept all properly tendered Notes which have
not been withdrawn. If such waiver constitutes a material change to the Exchange
Offer, the Company will promptly disclose such waiver by means of a prospectus
supplement that will be distributed to the registered Holders, and, depending
upon the significance of the waiver and the manner of disclosure to the
registered Holders, the Company will extend the Exchange Offer for a period of
five to ten business days if the Exchange Offer would otherwise expire during
such five to ten business-day period.
EXCHANGE AGENT
First Trust National Association will act as Exchange Agent for the
Exchange Offer.
Questions and requests for assistance, requests for additional copies
of this Prospectus or of the Letter of Transmittal for the Notes and requests
for copies of Notice of Guaranteed Delivery should be directed to the Exchange
Agent, addressed as follows:
By Registered or Certified Mail, Overnight Mail or Courier Service or
in Person by Hand:
180 East 5th Street
St. Paul, Minnesota 55101
Attn: Corporate Trust
By Facsimile:
(612) 244-1537
Confirm by Telephone:
(612) 244-1197
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FEES AND EXPENSES
The expenses of the Exchange Offer will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telephone, facsimile or in person by officers and
regular employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with
the Exchange Offer and will not make any payments to brokers or other persons
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith and pay
other registration expenses, including fees and expenses of the Trustee, filing
fees, blue sky fees and printing and distribution expenses.
The Company will pay all transfer taxes, if any, applicable to the
exchange of the Notes pursuant to the Exchange Offer. If, however, certificates
representing the Exchange Notes or the Notes for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be issued in the name
of, any person other than the registered Holder of the Notes tendered, or if
tendered Notes are registered in the name of any person other than the person
signing the Letter of Transmittal, or if a transfer tax is imposed for any
reason other than the exchange of the Notes pursuant to the Exchange Offer, then
the amount of any such transfer taxes (whether imposed on the registered Holder
or any other person) will be payable by the tendering Holder.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the
Notes, which is the aggregate principal amount, as reflected in the Company's
accounting records on the date of exchange. Accordingly, no gain or loss for
accounting purposes will be recognized in connection with the Exchange Offer.
The expenses of the Exchange Offer will be amortized over the term of the
Exchange Notes.
RESALE OF EXCHANGE NOTES
Based on an interpretation by the staff of the SEC set forth in
no-action letters issued to third parties, the Company believes that Exchange
Notes issued pursuant to the Exchange Offer in exchange for Notes may be offered
for resale, resold and otherwise transferred by any Holder of such Exchange
Notes (other than any such Holder which is an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such Exchange Notes are acquired in the ordinary course of such Holder's
business and such Holder does not intend to participate, and has no arrangement
or understanding with any person to participate, in the distribution of such
Exchange Notes. Any Holder who tenders in the Exchange Offer with the intention
to participate, or for the purpose of participating, in a distribution of the
Exchange Notes may not rely on the position of the staff of the SEC enunciated
in Exxon Capital Holdings Corporation (available April 13, 1989) and Morgan
Stanley & Co., Incorporated (available June 5, 1991), or similar no-action
letters, but rather must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction. In
addition, any such resale transaction should be covered by an effective
registration statement containing the selling security holders information
required by Item 507 of Regulation S-K of the Securities Act. Each broker-dealer
that receives Exchange Notes for its own account in exchange for Notes, where
such Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, may be a statutory underwriter and must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes.
By tendering in the Exchange Offer, each Holder will represent to the
Company that, among other things, (i) the Exchange Notes acquired pursuant to
the Exchange Offer are being obtained in the ordinary course of business of the
person receiving such Exchange Notes, whether or not such person is a Holder,
(ii) neither the Holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such
Exchange Notes and (iii) the Holder and such other person acknowledge that if
they participate in the Exchange Offer for the purpose of distributing the
Exchange Notes (a) they must, in the absence of an exemption therefrom, comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any resale of the Exchange Notes and cannot rely on the
no-action letters referenced above and (b) failure to comply with such
requirements in such instance could result in such Holder incurring liability
under the
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Securities Act for which such Holder is not indemnified by the Company. Further,
by tendering in the Exchange Offer, each Holder that may be deemed an
"affiliate" (as defined under Rule 405 of the Securities Act) of the Company
will represent to the Company that such Holder understands and acknowledges that
the Exchange Notes may not be offered for resale, resold or otherwise
transferred by that Holder without registration under the Securities Act or an
exemption therefrom.
As set forth above, affiliates of the Company are not entitled to
rely on the foregoing interpretations of the staff of the SEC with respect to
resales of the Exchange Notes without compliance with the registration and
prospectus delivery requirements of the Securities Act.
CONSEQUENCES OF FAILURE TO EXCHANGE
As a result of the making of this Exchange Offer, the Company will
have fulfilled one of its obligations under the Registration Rights Agreement,
and Holders of Notes who do not tender their Notes generally will not have any
further registration rights under the Registration Rights Agreement or
otherwise. Accordingly, any Holder of Notes that does not exchange that Holder's
Notes for Exchange Notes will continue to hold the untendered Notes and will be
entitled to all the rights and limitations applicable thereto under the
Indenture, except to the extent that such rights or limitations, by their terms,
terminate or cease to have further effectiveness as a result of the Exchange
Offer.
The Notes that are not exchanged for Exchange Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, such Notes may be
resold only (i) to the Company (upon redemption thereof or otherwise), (ii)
pursuant to an effective registration statement under the Securities Act, (iii)
so long as the Notes are eligible for resale pursuant to Rule 144A, to a
qualified institutional buyer within the meaning of Rule 144A under the
Securities Act in a transaction meeting the requirements of Rule 144A, (iv)
outside the United States to a foreign person pursuant to the exemption from the
registration requirements of the Securities Act provided by Regulation S
thereunder, (v) pursuant to an exemption from registration under the Securities
Act provided by Rule 144 thereunder (if available) or (vi) to an institutional
accredited investor in a transaction exempt from the registration requirements
of the Securities Act, in each case in accordance with any applicable securities
laws of any state of the United States.
OTHER
Participation in the Exchange Offer is voluntary and Holders should
carefully consider whether to accept. Holders of the Notes are urged to consult
their financial and tax advisors in making their own decision on what action to
take.
The Company may in the future seek to acquire untendered Notes in
open market or privately negotiated transactions, through subsequent exchange
offers or otherwise. The Company has no present plans to acquire any Notes that
are not tendered in the Exchange Offer or to file a registration statement to
permit resales of any untendered Notes.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
OF THE EXCHANGE OFFER
The following discussion is based upon current provisions of the IRC,
applicable Treasury regulations, judicial authority and administrative rulings
and practice. There can be no assurance that the IRS will not take a contrary
view, and no ruling from the IRS has been or will be sought. Legislative,
judicial or administrative changes or interpretations may be forthcoming that
could alter or modify the statements and conditions set forth herein. Any such
changes or interpretations may or may not be retroactive and could affect the
tax consequences to Holders. Certain Holders of the Notes (including insurance
companies, tax-exempt organizations, financial institutions, broker-dealers,
foreign corporations and persons who are not citizens or residents of the United
States) may be subject to special rules not discussed below. Each Holder of a
Note should consult his, her or its own tax advisor as to the particular tax
consequences of exchanging such Holder's Notes for Exchange Notes, including the
applicability and effect of any state, local or foreign tax laws.
The issuance of the Exchange Notes to Holders of the Notes pursuant
to the terms set forth in this Prospectus will not constitute an exchange for
federal income tax purposes. Consequently, no gain or loss would be recognized
by Holders of the
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<PAGE> 32
Notes upon receipt of the Exchange Notes, and ownership of the Exchange Notes
will be considered a continuation of ownership of the Notes. For purposes of
determining gain or loss upon the subsequent sale or exchange of the Exchange
Notes, a Holder's basis in the Exchange Notes should be the same as such
Holder's basis in the Notes exchanged therefor. A Holder's holding period for
the Exchange Notes should include the Holder's holding period for the Notes
exchanged therefor. The issue price, original issue discount inclusion and other
tax characteristics of the Exchange Notes should be identical to the issue
price, original issue discount inclusion and other tax characteristics of the
Notes exchanged therefor.
See also "Description of Certain Federal Income Tax Consequences of
an Investment in the Exchange Notes."
DESCRIPTION OF THE SENIOR CREDIT FACILITY
Concurrently with the Laidlaw Acquisition, the Company entered into a
senior credit facility (the "Senior Credit Facility") consisting of (i) a $475
million five and one-half year amortizing senior secured term loan facility (the
"Term Loan Facility"), (ii) three amortizing senior secured term loan facilities
(the "Serialized Facilities") in an aggregate original principal amount of $500
million and with ultimate maturities which range from six and one-half years to
eight and one-half years, and (iii) a $300 million five and one-half year senior
secured revolving credit facility (the "Revolving Credit Facility"). The Term
Loan Facility and the Serialized Facilities are amortizing senior secured term
loans with annual amortizations of principal (payable quarterly) in various
amounts.
The Company is required to make prepayments on the Senior Credit
Facility under certain circumstances, including upon certain asset sales and
issuance of debt or equity securities. The Company is also required to make
prepayments on the Senior Credit Facility in an amount equal to 75% of the
Company's annual Excess Cash Flow (as defined in the Senior Credit Facility).
These mandatory prepayments will be applied to prepay the Senior Credit Facility
in the following order: first, to the Term Loan Facility and to the Serialized
Facilities, ratably among each tranche except that the Lenders under each of the
Serialized Facilities may elect in certain circumstances not to require such
prepayment (in which event such prepayment will be applied to the Term Loan
Facility), and second, to the permanent reduction of the Revolving Credit
Facility. The Term Loan Facility and the Revolving Credit Facility bear
interest, at the Company's option, at Credit Suisse's customary base rate plus
1.5% or at Credit Suisse's Eurodollar rate plus 2.5%. The Serialized Series A
Facility bears interest, at the Company's option, at Credit Suisse's customary
base rate plus 1.75% or at Credit Suisse's Eurodollar rate plus 2.75%. The
Serialized Series B Facility bears interest, at the Company's option, at Credit
Suisse's customary base rate plus 2.0% or at Credit Suisse's Eurodollar rate
plus 3.0%. The Serialized Series C Facility bears interest, at the Company's
option, at Credit Suisse's customary base rate plus 2.25% or at Credit Suisse's
Eurodollar rate plus 3.25%. Beginning one year after the closing of the Senior
Credit Facility, the margins above Credit Suisse's customary base rate and
Credit Suisse's Eurodollar rate, at which the Term Loan Facility and the
Revolving Credit Facility bear interest, may be reduced pursuant to a floating
performance pricing grid which is based on the Total Debt/EBITDA (as defined in
the Senior Credit Facility) ratio applicable for each testing period.
Pursuant to the Revolving Credit Facility, the Company has $300
million of availability for working capital, letters-of-credit, acquisitions and
other general corporate purposes. No more than $200 million of funded loans
(excluding amounts outstanding pursuant to drawn letters of credit) may be
outstanding at one time, of which up to $100 million may be used for
acquisitions, subject to the Company meeting certain pro forma financial
covenants. The amount borrowed under the Revolving Credit Facility for any
proposed acquisition may not exceed three times the revenues of the business to
be acquired for the preceding twelve-month period multiplied by the Company's
EBITDA margin (the Company's EBITDA for the preceding 12-month period divided by
its revenues for the period). Loans for acquisitions begin to amortize on dates
and in amounts to be negotiated beginning three and one-half years after
closing.
The Senior Credit Facility is guaranteed by Allied and by each of the
Company's present and future subsidiaries and is secured by all of the stock of
the Company and the Company's present and future subsidiaries and by
substantially all of the present and future property and assets of the Company
and its present and future subsidiaries.
The Senior Credit Facility contains certain financial covenants,
including, but not limited to, covenants related to cash interest coverage,
fixed charge coverage, Senior Debt/EBITDA ratio, total Debt/EBITDA ratio and a
limit upon annual capital expenditures. In addition, the Senior Credit Facility
contains other affirmative and negative covenants relating to (among other
things) liens, payments on other Debt (including the Notes and the Exchange
Notes), transactions with affiliates, mergers and
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acquisitions, sales of assets, leases, guarantees and investments. The Senior
Credit Facility contains customary events of default for highly leveraged
financings.
The Company has interest rate protection in form and with parties
acceptable to the lenders of the Senior Credit Facility (the "Senior Lenders")
in an amount equal to ___% of the Term Loan Facility and the Serialized
Facilities.
In connection with the closing of the Canadian Sale, an aggregate
amount of approximately $_____________ has been applied to prepayment of the
Term Loan Facility and the Serialized Facilities. As a result, pro forma for the
closing of the Canadian Sale and the application of the proceeds to prepay
indebtedness under the Senior Credit Facility, as of December 31, 1996, there
was an aggregate of $______________ outstanding under the Term Loan Facility and
the Serialized Facilities and an aggregate of $_____________ outstanding under
the Revolving Credit Facility.
DESCRIPTION OF THE EXCHANGE NOTES
The Exchange Notes will be issued pursuant to an Indenture, dated as
of December 1, 1996 (the "Indenture"), among the Company, Allied, as a
Guarantor, the Subsidiary Guarantors and First Bank National Association, as
trustee (the "Trustee").
The Indenture is by its terms subject to and governed by the Trust
Indenture Act of 1939, as amended. The statements under this caption relating to
the Exchange Notes and the Indenture are summaries and do not purport to be
complete, and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indenture, including the definitions therein of
certain terms. Wherever defined terms or particular sections of the Indenture
are referred to, such defined terms and sections are incorporated herein by
reference. All references in this section to the "Company" refer solely to
Allied Waste North America, Inc., the issuer of the Exchange Notes, and to
"Allied" refer solely to Allied Waste Industries, Inc., and not to their
respective subsidiaries.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in
the Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided. (Section 101).
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Allied Canada Debentures" means the Zero Coupon Junior Subordinated
Debenture of Allied Canada and the 7% Junior Subordinated Debenture of Allied
Canada issued to Laidlaw Inc. ("Laidlaw") and subsequently transferred by
Laidlaw to Allied Finance.
"Allied Insurance" means Allied Insurance and Indemnity Corporation,
a Vermont corporation and a Subsidiary of the Company, engaged solely in the
business of issuing insurance policies with respect to the closure and
post-closure financial assurance obligations of the Company and its Restricted
Subsidiaries.
"Asset Disposition" by any Person that is the Company or any
Restricted Subsidiary means any transfer, conveyance, sale, lease or other
disposition by the Company or any of its Restricted Subsidiaries (including a
consolidation or merger or other sale of any Restricted Subsidiary with, into or
to another Person in a transaction in which such Subsidiary ceases to be a
Restricted Subsidiary of such Person), of (i) shares of Capital Stock (other
than directors' qualifying shares) or other ownership interests of a Restricted
Subsidiary or (ii) the property or assets of such Person or any Restricted
Subsidiary representing a division or line of business or (iii) other assets or
rights of such Person or any Restricted Subsidiary outside of the ordinary
course of business, but excluding in each case in Clauses (i), (ii) and (iii),
(x) a disposition by a Subsidiary of such Person to such Person or a Wholly
Owned Restricted Subsidiary or by such Person to a Wholly Owned Restricted
Subsidiary, (y) the disposition of all
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or substantially all of the assets of the Company in a manner permitted pursuant
to the provisions described above under "Mergers, Consolidations and Certain
Sales and Purchases of Assets" of the Company and (z) any disposition that
constitutes a Restricted Payment or Permitted Investment that is permitted
pursuant to the provisions described under "Certain Covenants -- Limitation on
Restricted Payments."
"Bank Agreement" means the Credit Agreement entered into by the
Company with Goldman Sachs Credit Partners L.P., Citibank, N.A., Citicorp
Securities, Inc., Citicorp USA, Inc. and Credit Suisse, or any bank credit
agreement that replaces, amends, supplements, restates or renews such Credit
Agreement.
"Bank Facility Capacity Increase" means a replacement, amendment,
supplement, restatement, renewal or other modification of the Bank Agreement
that increases the aggregate amount of borrowings permitted under the Bank
Agreement.
"Bank Facility Limit" means (x) $1,275 million less principal
payments of term loans and permanent commitment reductions with respect to
revolving loans under the Bank Agreement since the date of the Indenture or (y)
following a Bank Facility Capacity Increase, the Increased Bank Facility Limit,
less principal payment of term loans and permanent commitment reductions with
respect to revolving loans under the Bank Agreement, as so replaced, amended,
supplemented, restated, renewed or modified, since the date of such Bank
Facility Capacity Increase.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other arrangements conveying
the right to use) real or personal property of such Person which is required to
be classified and accounted for as a capital lease or a liability on a balance
sheet of such Person in accordance with generally accepted accounting
principles. The stated maturity of such obligation shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty. The principal amount of such obligation shall be the capitalized amount
thereof that would appear on a balance sheet of such Person in accordance with
generally accepted accounting principles.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such Person.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Comparable Treasury Issue" means on any date the United States
Treasury security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Exchange Notes on such date
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of a maturity comparable to the remaining term of the Exchange Notes on such
date. "Independent Investment Banker" means Goldman, Sachs or, if such firm is
unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any Redemption
Date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and any
Redemption Date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third business day preceding such Redemption
Date.
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"Consolidated EBITDA" of any Person means for any period the
Consolidated Net Income for such period increased by the sum of (i) Consolidated
Interest Expense of such Person for such period, plus (ii) Consolidated Income
Tax Expense of such Person for such period, plus (iii) the consolidated
depreciation and amortization expense deducted in determining the Consolidated
Net Income of such Person for such period; provided, however, that the
Consolidated Interest Expense, Consolidated Income Tax Expense and consolidated
depreciation and amortization expense of a Consolidated Subsidiary of such
Person shall be added to the Consolidated Net Income pursuant to the foregoing
only (x) to the extent and in the same proportion that the Consolidated Net
Income of such Consolidated Subsidiary was included in calculating the
Consolidated Net Income of such Person and (y) only to the extent that the
amount specified in Clause (x) is not subject to restrictions that prevent the
payment of dividends or the making of distributions to such Person.
"Consolidated EBITDA Coverage Ratio" of any Person means for any
period the ratio of (i) Consolidated EBITDA of such Person for such period to
(ii) the sum of (A) Consolidated Interest Expense of such Person for such period
plus (B) the annual interest expense (including the amortization of debt
discount) with respect to any Debt incurred or proposed to be Incurred by such
Person or its Consolidated Subsidiaries since the beginning of such period to
the extent not included in clause (ii)(A), minus (C) Consolidated Interest
Expense of such Person with respect to any Debt that is no longer outstanding or
that will no longer be outstanding as a result of the transaction with respect
to which the Consolidated EBITDA Coverage Ratio is being calculated, to the
extent included within Clause (ii)(A); provided, however, that in making such
computation, the Consolidated Interest Expense of such Person attributable to
interest on any Debt bearing a floating interest rate shall be computed on a pro
forma basis as if the rate in effect on the date of computation had been the
applicable rate for the entire period; and provided further, that, in the event
such Person or any of its Consolidated Subsidiaries has made acquisitions or
dispositions of assets not in the ordinary course of business (including the
acquisition by the Company of the Subsidiaries of Allied, the acquisition by the
Company of the Subsidiaries of Laidlaw pursuant to the Acquisition and any other
acquisitions of any other Persons by merger, consolidation or purchase of
Capital Stock) during or after such period, the computation of the Consolidated
EBITDA Coverage Ratio (and for the purpose of such computation, the calculation
of Consolidated Net Income, Consolidated Interest Expense, Consolidated Income
Tax Expense and Consolidated EBITDA) shall be made on a pro forma basis as if
the acquisitions or dispositions had taken place on the first day of such
period.
"Consolidated Income Tax Expense" of any Person means for any period
the consolidated provision for income taxes of such Person and its Consolidated
Subsidiaries for such period determined in accordance with generally accepted
accounting principles.
"Consolidated Interest Expense" of any Person means for any period
the consolidated interest expense included in a consolidated income statement
(net of interest income) of such Person and its Consolidated Subsidiaries for
such period determined in accordance with generally accepted accounting
principles, including without limitation or duplication (or, to the extent not
so included, with the addition of), (i) the portion of any rental obligation in
respect of any Capital Lease Obligation allocable to interest expense in
accordance with generally accepted accounting principles; (ii) the amortization
of Debt discounts; (iii) any payments or fees with respect to letters of credit,
bankers' acceptances or similar facilities; (iv) fees with respect to interest
rate swap or similar agreements or foreign currency hedge, exchange or similar
agreements; (v) any Preferred Stock dividends declared and paid or payable in
cash; and (vi) any interest capitalized in accordance with generally accepted
accounting principles; provided, however, that Consolidated Interest Expense
shall not include interest expense or amortization of Debt discounts relating to
the Allied Canada Debentures.
"Consolidated Net Income" of any Person means for any period the
consolidated net income (or loss) of such Person and its Consolidated
Subsidiaries for such period determined in accordance with generally accepted
accounting principles; provided that there shall be excluded therefrom (a) the
net income (or loss) of any Person acquired by such Person or a Subsidiary of
such Person in a pooling-of-interests transaction for any period prior to the
date of such transaction (subject to the final proviso of the definition of
Consolidated EBITDA Coverage Ratio when Consolidated Net Income is being
computed for purposes of calculating the Consolidated EBITDA Coverage Ratio),
(b) the net income (but not net loss) of any Consolidated Subsidiary of such
Person that is subject to restrictions that prevent the payment of dividends or
the making of distributions to such Person to the extent of such restrictions,
(c) the net income (or loss) of any Person that is not a Consolidated Subsidiary
of such Person except to the extent of the amount of dividends or other
distributions actually paid to such Person by such other Person during such
period, (d) gains or losses on asset dispositions by such Person or its
Consolidated Subsidiaries, (e) any net income (loss) of a Consolidated
Subsidiary that is attributable to a minority interest in such Consolidated
Subsidiary, (f) all extraordinary gains
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and extraordinary losses that involve a present or future cash payment and (g)
the tax effect of any of the items described in Clauses (a) through (f) above.
"Consolidated Net Worth" of any Person at any date means the
consolidated stockholders' equity of such Person and its Restricted Subsidiaries
at such date, as determined on a consolidated basis in accordance with generally
accepted accounting principles, less amounts attributable to Redeemable
Interests of such Person; provided, however, that, with respect to the Company
and its Restricted Subsidiaries, adjustments following the date of the Indenture
to the accounting books and records of the Company and its Restricted
Subsidiaries in accordance with Accounting Principles Board Opinions Nos. 16 and
17 (or successor opinions thereto) or otherwise resulting from the acquisition
of control of the Company by another Person shall not be given effect to.
"Consolidated Subsidiaries" of any Person means all other Persons
that would be accounted for as consolidated Persons in such Person's financial
statements in accordance with generally accepted accounting principles;
provided, however, that, for any particular period during which any Subsidiary
of such person was an Unrestricted Subsidiary, "Consolidated Subsidiaries" will
exclude such Subsidiary for such period (or portion thereof) during which it was
an Unrestricted Subsidiary.
"Consolidated Total Assets" of any Person at any date means the
consolidated total assets of such Person and its Restricted Subsidiaries at such
date, as determined on a consolidated basis in accordance with generally
accepted accounting principles.
"Debt" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person, (i) every
obligation of such Person for money borrowed, (ii) every obligation of such
Person evidenced by bonds, debentures, Exchange Notes or other similar
instruments, including obligations Incurred in connection with the acquisition
of property, assets or businesses, (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business), (v) every Capital Lease Obligation of such Person,
(vi) the maximum fixed redemption or repurchase price of Redeemable Interests of
such Person at the time of determination, (vii) every net payment obligation of
such Person under interest rate swap or similar agreements or foreign currency
hedge, exchange or similar agreements at the time of determination and (viii)
every obligation of the type referred to in Clauses (i) through (vii) of another
Person and all dividends of another Person the payment of which, in either case,
such Person has Guaranteed or for which such Person is responsible or liable,
directly or indirectly, jointly or severally, as obligor, Guarantor or
otherwise.
"Excepted Disposition" means a transfer, conveyance, sale, lease or
other disposition by the Company or any Restricted Subsidiary of (i) the Capital
Stock or assets of Specialized Waste, or (ii) any other asset of the Company or
any Restricted Subsidiary the fair market value of which does not exceed $5
million by itself or $10 million in aggregate with all other assets disposed off
in Excepted Dispositions under this Clause (ii) in any fiscal year.
"Guaranty" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing any Debt, or dividends or distributions
on any equity security, of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such Debt, (ii) to
purchase property, securities or services for the purpose of assuring the holder
of such Debt of the payment of such Debt or (iii) to maintain working capital,
equity capital or other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Debt (and
"Guaranteed", "Guaranteeing" and "Guarantor" shall have meanings correlative to
the foregoing); provided, however, that the Guaranty by any Person shall not
include endorsements by such Person for collection or deposit, in either case,
in the ordinary course of business.
"Increased Bank Facility Limit" means, in connection with any Bank
Facility Capacity Increase, the amount that is the least of (i) the aggregate
amount of Debt permitted to be outstanding under the terms of the Bank
Agreement, as amended pursuant to such Bank Facility Capacity Increase, (ii) the
amount equal to three times Consolidated EBITDA of the Company for the most
recently ended four fiscal quarters period for which financial statements are
available immediately preceding the date of such Bank Facility Capacity Increase
and (iii) the amount equal to the sum of (x) the maximum amount of Debt that the
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Company would be permitted to Incur on such date under the Consolidated EBITDA
Coverage Ratio test set forth in the first paragraph of Section 1008 on the
terms contemplated by the Bank Agreement, as amended by the Bank Facility
Capacity Increase and (y) the aggregate amount of Debt outstanding under the
Bank Agreement on such date.
"Incur" means, with respect to any Debt of any Person, to create,
issue, incur (by conversion, exchange or otherwise), assume, Guarantee or
otherwise become liable in respect of such Debt, or the taking of any other
action which would cause such Debt, in accordance with generally accepted
accounting principles to be recorded on the balance sheet of such Person (and
"Incurrence", "Incurred", "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing); provided that, the Debt of any other Person
becoming a Restricted Subsidiary of such Person will be deemed for this purpose
to have been Incurred by such Person at the time such other Person becomes a
Restricted Subsidiary of such Person, provided, however, that a change in
generally accepted accounting principles that results in an obligation of such
Person that exists at such time becoming Debt shall not be deemed an Incurrence
of such Debt.
"Intercompany Agreements" means the Management Agreements between
Allied and the Company dated November 15, 1996.
"Interest Rate or Currency Protection Agreement" of any Person means
any interest rate protection agreement (including, without limitation, interest
rate swaps, caps, floors, collars, derivative instruments and similar
agreements), and/or other types of interest hedging agreements and any currency
protection agreement (including foreign exchange contracts, currency swap
agreements or other currency hedging arrangements).
"Investment" by any Person in any other Person means (i) any direct
or indirect loan, advance or other extension of credit or capital contribution
to or for the account of such other Person (by means of any transfer of cash or
other property to any Person or any payment for property or services for the
account or use of any Person, or otherwise), (ii) any direct or indirect
purchase or other acquisition of any Capital Stock, bond, note, debenture or
other debt or equity security or evidence of Debt, or any other ownership
interest, issued by such other Person, whether or not such acquisition is from
such or any other Person, (iii) any direct or indirect payment by such Person on
a Guaranty of any obligation of or for the account of such other Person or any
direct or indirect issuance by such Person of such a Guaranty or (iv) any other
investment of cash or other property by such Person in or for the account of
such other Person.
"Lien" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement or title exception, encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Med Track" means Laidlaw Med Track Medical Services, Inc., a British
Columbia corporation and a Subsidiary of the Company. Upon closing the
Acquisition, the Company will own 55% of the common stock of Med Track.
"Net Available Proceeds" from any Asset Disposition by any Person
that is the Company or any Restricted Subsidiary means cash or readily
marketable cash equivalents received (including by way of sale or discounting of
a note, installment receivable or other receivable, but excluding any other
consideration received in the form of assumption by the acquiree of Debt or
other obligations relating to such properties or assets or received in any other
noncash form) therefrom by such Person, net of (i) all legal, title and
recording tax expenses, commissions and other fees and expenses Incurred and all
federal, state, provincial, foreign and local taxes required to be accrued as a
liability as a consequence of such Asset Disposition, (ii) all payments made by
such Person or its Restricted Subsidiaries on any Debt that is secured by such
assets in accordance with the terms of any Lien upon or with respect to such
assets or that must, by the terms of such Lien, or in order to obtain a
necessary consent to such Asset Disposition, or by applicable law, be repaid out
of the proceeds from such Asset Disposition (iii) amounts provided as a reserve
by such Person or its Restricted Subsidiaries, in accordance with generally
accepted accounting principles, against liabilities under any indemnification
obligations to the buyer in such Asset Disposition (except to the extent and at
the time any such amounts are released from any such reserve, such amounts shall
constitute Net Available Proceeds) and (iv) all distributions and other payments
made to minority interest holders in Restricted Subsidiaries of such Person or
joint ventures as a result of such Asset Disposition.
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"pari passu", when used with respect to the ranking of any Debt of
any Person in relation to other Debt of such Person, means that each such Debt
(a) either (i) is not subordinated in right of payment to any other Debt of such
Person or (ii) is subordinate in right of payment to the same Debt of such
Person as is the other Debt and is so subordinate to the same extent and (b) is
not subordinate in right of payment to the other Debt or to any Debt of such
Person as to which the other Debt is not so subordinate.
"Permitted Interest Rate or Currency Protection Agreement" of any
Person means any Interest Rate or Currency Protection Agreement entered into
with one or more financial institutions in the ordinary course of business that
is designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and which shall have a
notional amount no greater than the payments due with respect to the Debt being
hedged thereby.
"Permitted Investment" means (i) Investments in the Company or any
Person that is, or as a consequence of such Investment becomes, a Wholly Owned
Restricted Subsidiary, (ii) securities either issued directly or fully
guaranteed or insured by the government of the United States of America or any
agency or instrumentality thereof having maturities of not more than one year,
(iii) time deposits and certificates of deposit, demand deposits and banker's
acceptances having maturities of not more than one year from the date of
deposit, of any domestic commercial bank having capital and surplus in excess of
$500 million and having peer group rating of B or better (or the equivalent
thereof) by Thompson BankWatch, Inc. or outstanding long-term debt rated BBB or
better (or the equivalent thereof) by Standard & Poor's Ratings Group or Baa or
better (or the equivalent thereof) by Moody's Investors Service, Inc., (iv)
demand deposits made in the ordinary course of business and consistent with the
Company's customary cash management policy in any domestic office of any
commercial bank organized under the laws of the United States of America or any
State thereof, (v) insured deposits issued by commercial banks of the type
described in Clause (iv) above, (vi) mutual funds whose investment guidelines
restrict such funds' investments primarily to those satisfying the provisions of
Clauses (i) through (iii) above, (vii) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in Clauses
(ii) and (iii) above entered into with any bank meeting the qualifications
specified in Clause (iii) above, (viii) commercial paper (other than commercial
paper issued by an Affiliate or Related Person) rated A-1 or the equivalent
thereof by Standard & Poor's Ratings Group or P-1 or the equivalent thereof by
Moody's Investors Service, Inc., and in each case maturing within 360 days, (ix)
receivables owing to the Company or a Restricted Subsidiary of the Company if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms, (x) any Investment
consisting of loans and advances to employees of the Company or any Restricted
Subsidiary for travel, entertainment, relocation or other expenses in the
ordinary course of business, (xi) any Investment consisting of loans and
advances by the Company or any Restricted Subsidiary to employees, officers and
directors of the Company or Allied, in connection with management incentive
plans not to exceed $5 million at any time outstanding; provided, however, that
to the extent the proceeds thereof are used to purchase Capital Stock (other
than Redeemable Interests) of Allied and Allied uses the proceeds thereof to
acquire Capital Stock (other than Redeemable Interests) of the Company, such
limitation on the amount of such Investments at any time outstanding shall not
apply with respect to such Investments, (xii) any Investment consisting of a
Permitted Interest Rate or Currency Protection Agreement, (xiii) any Investment
acquired by the Company or any of its Restricted Subsidiaries (A) in exchange
for any other Investment or accounts receivable held by the Company or any such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable or (B) as a result of a foreclosure by the
Company or any of its Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to any secured Investment in
default, (xiv) any Investment that constitutes part of the consideration from an
Asset Disposition made pursuant to, and in compliance with, the covenant
described above under "--Repurchase at the Option of Holders -- Asset Sales,"
(xv) Investments the payment for which consists exclusively of Capital Stock
(exclusive of Redeemable Interests) of the Company; and (xvi) other Investments
in an aggregate amount of not to exceed $50 million.
"Preferred Stock," as applied to the Capital Stock of any Person,
means Capital Stock of such Person of any class or classes (however designated)
that ranks prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Public Offering" means any underwritten public offering of Common
Stock pursuant to a registration statement filed under the Securities Act of
1933, as amended.
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"Redeemable Interest" of any Person means any equity security of or
other ownership interest in such Person that by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable) or
otherwise (including upon the occurrence of an event) matures or is required to
be redeemed (pursuant to any sinking fund obligation or otherwise) or is
convertible into or exchangeable for Debt or is redeemable at the option of the
holder thereof, in whole or in part, at any time prior to the final Stated
Maturity of the Exchange Notes.
"Reference Treasury Dealer" means each of Goldman, Sachs & Co.,
Citicorp Securities, Inc., and CS First Boston Corporation and their respective
successors, provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
"Related Person" of any Person means, without limitation, any other
Person owning (a) 5% or more of the outstanding Common Stock of such Person or
(b) 5% or more of the Voting Stock of such Person.
"Restricted Subsidiary" means (i) at any date, a Subsidiary of the
Company that is not an Unrestricted Subsidiary as of such date and (ii) for any
period, a Subsidiary of the Company that for any portion of such period is not
an Unrestricted Subsidiary, provided that such term shall mean such Subsidiary
only for such portion of such period.
"Sale and Leaseback Transaction" means an arrangement with any lender
or investor or to which such lender or investor is a party providing for the
leasing by a Person of any property or asset of such Person which has been or is
being sold or transferred, more than 270 days after the acquisition thereof or
the completion of construction or commencement of operation thereof, by such
Person to such lender or investor or to any person to whom funds have been or
are to be advanced by such lender or investor on the security of such property
or asset. The stated maturity of such arrangement shall be the date of the last
payment of rent or any other amount due under such arrangement prior to the
first date on which such arrangement may be terminated by the lessee without
payment of a penalty.
"Senior Debt" means (i) with respect to the Company, Debt created
pursuant to the Bank Agreement, (ii) with respect to the Company, any Guarantor
or any Restricted Subsidiary, Debt of such Person referred to in clauses (i),
(ii), (iii), (v) or (vii) of the definition of Debt, whether Incurred on or
prior to the date of the Indenture or thereafter Incurred, (iii) with respect to
the Company, any Guarantor or any Restricted Subsidiary, Guarantees by such
person of Senior Debt and (iv) amendments, modifications, renewals, extensions,
refinancings and refundings of any such Debt; provided, however, the following
shall not constitute Senior Debt: (A) any Debt owed to a Person when such Person
is a Subsidiary of the Company, (B) any Debt which by the terms of the
instrument creating or evidencing the same is pari passu or subordinate in right
of payment to the Exchange Notes, (C) any Debt Incurred in violation of the
Indenture or (D) any Debt which is subordinate in right of payment in any
respect to any other Debt of the Company. For purposes of this definition,
"Debt" includes any obligation to pay principal, premium (if any), interest,
penalties, reimbursement or indemnity amounts, fees and expenses (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not a claim for post-petition
interest is allowed in such proceeding).
"Subsidiary" of any Person means (i) a corporation more than 50% of
the combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof, (ii) a
partnership of which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, is the general partner and has the power to direct the policies,
management and affairs or (iii) any other Person (other than a corporation) in
which such Person, or one or more other Subsidiaries of such Person or such
Person and one or more other Subsidiaries thereof, directly or indirectly, has
at least a majority ownership interest and power to direct the policies,
management and affairs thereof.
"Treasury Yield" means, with respect to any Redemption Date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date.
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an
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<PAGE> 40
agency or instrumentality of the United States of America the payment of which
is unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or redeemable
at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933,
as amended) as custodian with respect to any such U.S. Government Obligation or
a specific payment of principal of or interest on any such U.S. Government
Obligation held by such custodian for the account of the holder of such
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such depository receipt.
"Unrestricted Subsidiary" means (i) at any date a Subsidiary of the
Company that is an Unrestricted Subsidiary in accordance with the provisions of
the Indenture described under the caption "Covenants -- Unrestricted
Subsidiaries" and (ii) for any period, a Subsidiary of the Company that for any
portion of such period is an Unrestricted Subsidiary in accordance with the
provisions of the Indenture as described under the caption "Covenants --
Unrestricted Subsidiaries," provided that such term shall mean such Subsidiary
only for such portion of such period.
"Voting Stock" of any Person means Capital Stock of such Person that
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Weighted Average Life" means, as of the date of determination, with
respect to any Debt, the quotient obtained by dividing (i) the sum of the
products of the number of years from the date of determination to the dates of
each successive scheduled principal payment of such Debt and the amount of such
principal by (ii) the sum of all such principal payments.
GENERAL
The Exchange Notes are unsecured senior subordinated obligations of
the Company, are limited to $525 million aggregate principal amount and mature
on December 1, 2006.
The Exchange Notes are fully and unconditionally guaranteed on a
senior subordinated basis by Allied (such guarantee, the "Parent Guarantee").
Allied's obligations under the Parent Guarantee will be fully and
unconditionally guaranteed, on a senior subordinated basis by Allied Finance
(such guarantee, the "Allied Finance Guarantee").
The Exchange Notes will also be fully and unconditionally guaranteed
by the existing Restricted Subsidiaries of the Company, other than Allied
Insurance and Med Track, and the Company will covenant to cause any Restricted
Subsidiaries acquired or created in the future to fully and unconditionally
guarantee the Exchange Notes, in each case jointly and severally on a senior
subordinated basis (such guarantees, the "Subsidiary Guarantees" and together
with the Parent Guarantee and the Allied Finance Guarantee, the "Senior
Subordinated Guarantees"; such guarantors, the "Subsidiary Guarantors," and
together with Allied and Allied Finance, the "Guarantors"). The Senior
Subordinated Guarantees will be unsecured (except as described in the following
paragraph with respect to the Allied Finance Guarantee) senior subordinated
obligations of the Guarantors and will be subordinate in right of payment to the
prior payment in full of all Senior Debt of the Guarantors to substantially the
same extent as the Exchange Notes are subordinated to Senior Debt of the
Company.
The Allied Finance Guarantee will be secured on a senior subordinated
basis by a pledge of the Allied Canada Debentures.
The Exchange Notes are effectively subordinated to all existing and
future indebtedness and other liabilities (including trade payables and capital
lease obligations) of Allied Insurance and the Company's Subsidiaries (if any)
that are Unrestricted Subsidiaries, and thus not Subsidiary Guarantors, and
would be so subordinated to all existing and future indebtedness of the
Subsidiary Guarantors if the Subsidiary Guarantees were avoided or subordinated
in favor of the Subsidiary Guarantors' other creditors. See "Risk Factors --
Substantially All Operations at Subsidiary Level; Structural Subordination" and
"-- Fraudulent Conveyance."
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<PAGE> 41
INTEREST AND PAYMENTS
The Exchange Notes will bear interest at 10 1/4% per annum, payable
semi-annually on June 1 and December 1 of each year, commencing June 1, 1997,
until the principal thereof is paid or made available for payment, to the Person
in whose name the Exchange Note (or any Predecessor Note) is registered at the
close of business on the preceding May 15 or November 15, as the case may be.
The Exchange Notes will bear interest on overdue principal and premium (if any)
and, to the extent permitted by law, overdue interest at 10 1/4% per annum plus
2%. Interest on the Exchange Notes will be computed on the basis of a 360-day
year of twelve 30-day months. (Section 301).
The principal of (and premium, if any) and interest (including
Special Interest (as defined herein)) on the Exchange Notes will be payable, and
the transfer of Exchange Notes will be registrable, at the office or agency of
the Company in The Borough of Manhattan, The City of New York. In addition,
payment of interest may, at the option of the Company, be made by check mailed
to the address of the Person entitled thereto as it appears in the Security
Register; provided, however, that all payments of the principal (and premium, if
any) and interest on Exchange Notes, the Holders of which have given wire
transfer instructions to the Company or its agent at least 10 Business Days
prior to the applicable payment date will be required to be made by wire
transfer of immediately available funds to the accounts specified by such
Holders in such instructions.
No service charge will be made for any registration of transfer or
exchange of Exchange Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Sections 203 and 307).
FORM, DENOMINATION, TRANSFER, EXCHANGE AND BOOK-ENTRY PROCEDURES
Exchange Notes will be issued only in fully registered form, without
interest coupons, in denominations of $1,000 and integral multiples thereof. The
Exchange Notes generally will be represented by one or more fully-registered
global notes (collectively, the "Global Exchange Note"). Notwithstanding the
foregoing, Notes held in certificated form will be exchanged solely for Exchange
Notes in certificated form, as discussed below. The Global Exchange Note will be
deposited upon issuance with The Depository Trust Company ("DTC") and registered
in the name of DTC or a nominee of DTC (the "Global Exchange Note Registered
Owner"). Except as set forth below, the Global Exchange Note may be transferred,
in whole and not in part, only to another nominee of DTC or to a successor of
DTC or its nominee.
A Holder may transfer or exchange Exchange Notes in accordance with
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company is not required to transfer or exchange
any Exchange Notes selected for redemption. Also, the Company is not required to
transfer or exchange Exchange Note for a period of 15 days before a selection of
Exchange Notes to be redeemed.
The registered Holder of an Exchange Note will be treated as the
owner of such Exchange Note for all purposes.
EXCHANGES OF BOOK-ENTRY EXCHANGE NOTES FOR CERTIFICATED EXCHANGE NOTES
A beneficial interest in a Global Exchange Note may not be exchanged
for an Exchange Note in certificated form unless (i) DTC (x) notifies the
Company that it is unwilling or unable to continue as Depositary for the Global
Exchange Note or (y) has ceased to be a clearing agency registered under the
Exchange Act, and in either case the Company thereupon fails to appoint a
successor Depositary, (ii) the Company, at its option, notifies the Trustee in
writing that it elects to cause the issuance of the Exchange Notes in
certificated form or (iii) there shall have occurred and be continuing an Event
of Default or any event which after notice or lapse of time or both would be an
Event of Default with respect to the Exchange Notes. In all cases, certificated
Exchange Notes delivered in exchange for any Global Exchange Note or beneficial
interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in accordance with
its customary procedures). Any such exchange will be effected through the DWAC
System and an appropriate adjustment will be made in the records of the Security
Registrar to reflect a decrease in the principal amount of the relevant Global
Exchange Note.
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<PAGE> 42
CERTAIN BOOK-ENTRY PROCEDURES FOR GLOBAL EXCHANGE NOTES
The descriptions of the operations and procedures of DTC that follow
are provided solely as a matter of convenience. These operations and procedures
are solely within the control of the respective settlement systems and are
subject to changes by them from time to time. The Company takes no
responsibility for these operations and procedures and urges investors to
contact the system or their participants directly to discuss these matters.
DTC has advised the Company as follows: DTC is a limited purpose
trust company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participants ("participants") and facilitate the clearance
and settlement of securities transactions between participants through
electronic book-entry changes in accounts of its participants, thereby
eliminating the need for physical transfer and delivery of certificates.
Participants include securities brokers and dealers, banks, trust companies and
clearing corporations and may include certain other organizations. Indirect
access to the DTC system is available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("indirect
participants").
DTC had advised the Company that its current practice, upon the
issuance of the Global Exchange Notes, is to credit, on its internal system, the
respective principal amount of the individual beneficial interests represented
by such Global Exchange Notes to the accounts with DTC of the participants
through which such interests are to be held. Ownership of beneficial interests
in the Global Exchange Notes will be shown on, and the transfer of that
ownership will be effected only through, records maintained by DTC or its
nominees (with respect to interests of participants) and the records of
participants and indirect participants (with respect to interests of persons
other than participants).
AS LONG AS DTC, OR ITS NOMINEE, IS THE REGISTERED HOLDER OF A GLOBAL
EXCHANGE NOTE, DTC OR SUCH NOMINEE, AS THE CASE MAY BE, WILL BE CONSIDERED THE
SOLE OWNER AND HOLDER OF THE EXCHANGE NOTES REPRESENTED BY SUCH GLOBAL EXCHANGE
NOTE FOR ALL PURPOSES UNDER THE INDENTURE AND THE EXCHANGE NOTES. Except in the
limited circumstances described above under "-- Exchanges of Book-Entry Notes
for Certificated Notes," owners of beneficial interests in a Global Exchange
Note will not be entitled to have any portions of such Global Exchange Note
registered in their names, will not receive or be entitled to receive physical
delivery of Exchange Notes in definitive form and will not be considered the
owners or Holders of the Global Exchange Note (or any Exchange Notes represented
thereby) under the Indenture or the Exchange Notes.
Investors may hold their interests in the Global Exchange Note
directly through DTC, if they are participants in such system, or indirectly
through organizations (including Euroclear and CEDEL) which are participants in
such system. The laws of some states require that certain persons take physical
delivery in definitive form of securities that they own. Consequently, the
ability to transfer beneficial interests in a Global Exchange Note to such
persons may be limited to that extent. Because DTC can act only on behalf of its
participants, which in turn act on behalf of indirect participants and certain
banks, the ability of a person having beneficial interests in a Global Exchange
Note to pledge such interest to persons or entities that do not participate in
the DTC system, or otherwise take actions in respect of such interests, may be
affected by the lack of a physical certificate evidencing such interests.
Payments of the principal of, premium, if any, and interest on Global
Exchange Notes will be made to DTC or its nominee as the registered owner
thereof. Neither the Company, the Trustee nor any of their respective agents
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in the Global
Exchange Notes or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
The Company expects that DTC or its nominee, upon receipt of any
payment of principal or interest in respect of a Global Exchange Note
representing any Exchange Notes held by it or its nominee, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Exchange
Note for such Exchange Notes as shown on the records of DTC or its nominee. The
Company also expects that payments by participants to owners of beneficial
interests in such Global Exchange Note held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered
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<PAGE> 43
in "street name." Such payments will be the responsibility of such participants.
None of the Company or the Trustee will be liable for any delay by DTC or any of
its participants in identifying the beneficial owners of the Exchange Notes, and
the Company and the Trustee may conclusively rely on and will be protected in
relying on instructions from DTC or its nominee as the registered owner of the
Exchange Notes for all purposes.
Interests in the Global Exchange Notes will trade in DTC's Same-Day
Funds Settlement System and secondary market trading activity in such interests
will therefore settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its participants. Transfers between
participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds.
Because of time zone differences, the securities account of a
Euroclear or CEDEL participant purchasing an interest in a Global Exchange Note
from a DTC participant will be credited, and any such crediting will be reported
to the relevant Euroclear or CEDEL participant, during the securities settlement
processing day (which must be a business day for Euroclear and CEDEL)
immediately following the DTC settlement date. Cash received in Euroclear or
CEDEL as a result of sales of interests in a Global Exchange Note by or through
a Euroclear or CEDEL participant to a DTC participant will be received with
value on the DTC settlement date but will be available in the relevant Euroclear
or CEDEL cash account only as of the business day for Euroclear or CEDEL
following the DTC settlement date.
DTC has advised the Company that it will take any action permitted to
be taken by a holder of Exchange Notes only at the direction of one or more
participants to whose accounts with DTC interests in the Global Exchange Notes
are credited and only in respect of such portion of the aggregate principal
amount of the Exchange Notes as to which such participant or participants has or
have given such direction. However, if there is an Event of Default (as defined
below) under the Exchange Notes, DTC reserves the right to exchange the Global
Exchange Notes for Exchange Notes in certificated form, and to distribute such
Exchange Notes to its participants.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of beneficial ownership interests in the Global Exchange
Notes among participants of DTC, it is under no obligation to perform or
continue to perform such procedures, and such procedures may be discontinued at
any time. None of the Company, the Trustee nor any of their respective agents
will have any responsibility for the performance by DTC, or its participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations, including maintaining, supervising or
reviewing the records relating to, or payments made on account of, beneficial
ownership interests in Global Exchange Notes.
OPTIONAL REDEMPTION
The Exchange Notes will not be subject to any redemption at the
option of the Company prior to December 1, 2001 except as set forth in the
following paragraphs. On or after December 1, 2001, the Exchange Notes will be
subject to redemption, in whole or in part, at the option of the Company at any
time prior to maturity, upon not less than 30 nor more than 60 days notice
mailed to each Holder of Exchange Notes to be redeemed at his address appearing
in the Security Register, in amounts of $1,000 or an integral multiple of
$1,000, at the following Redemption Prices (expressed as percentages of
principal amount) plus accrued but unpaid interest (including Special Interest)
to but excluding the Redemption Date (subject to the right of Holders of record
on the relevant Regular Record Date to receive interest due on an Interest
Payment Date that is on or prior to the Redemption Date), if redeemed during the
twelve-month period beginning on December 1 of each of the years indicated
below:
<TABLE>
<CAPTION>
YEAR Redemption Price
- ---- ----------------
<S> <C>
2001 105.1250%
2002 103.4167
2003 101.7083
and thereafter 100.0000
</TABLE>
Prior to December 1, 2001, the Exchange Notes will be subject to
redemption, at the option of the Company, in whole or in part, at any time, upon
not less than 30 nor more than 60 days notice mailed to each Holder of Exchange
Notes to be redeemed at such Holder's address appearing in the Note Register, in
amounts of $1,000 or an integral multiple of $1,000, at a
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Redemption Price equal to the greater of (i) 100% of their principal amount or
(ii) the sum of the present values of the remaining scheduled payments of
principal and interest thereon discounted to maturity on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Yield plus 75 basis points, plus in each case accrued but unpaid interest
(including Special Interest) to but excluding the Redemption Date (subject to
the right of Holders of record on the relevant Regular Record Date to receive
interest due on an Interest Payment Date that is on or prior to the Redemption
Date). (Sections 203, 301 and 1102).
At any time, or from time to time, prior to 180 days after December
30, 1996, up to $100 million in aggregate principal amount of the Exchange Notes
will be redeemable, at the option of the Company, from the net proceeds of one
or more Asset Dispositions by the Company or its Subsidiaries, at a Redemption
Price equal to 110.25% of the principal amount thereof, together with accrued
but unpaid interest (including Special Interest) to the Redemption Date (subject
to the right of Holders of record on the relevant Regular Record Date to receive
interest due on an Interest Payment Date that is on or prior to the Redemption
Date); provided that the notice of redemption with respect to any such
redemption is mailed within 30 days following the closing of the corresponding
Asset Disposition. (Sections 203, 301 and 1102).
At any time, or from time to time, prior to December 1, 1999, up to
33 1/3% in aggregate principal amount of Exchange Notes originally issued under
the Indenture will be redeemable, at the option of the Company, from the net
proceeds of one or more Public Offerings of Capital Stock (other than Redeemable
Interests) of Allied, at a Redemption Price equal to 110.25% of the principal
amount thereof, together with accrued but unpaid interest (including Special
Interest) to the Redemption Date (subject to the right of Holders of record on
the relevant Regular Record Date to receive interest due on an Interest Payment
Date that is on or prior to the Redemption Date); provided that the notice of
redemption with respect to any such redemption is mailed within 30 days
following the closing of the corresponding public offering. (Sections 203, 301
and 1102).
If less than all the Exchange Notes are to be redeemed, the
particular Exchange Notes to be redeemed will be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Exchange Notes
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of
portions (equal to $1,000 or any integral multiple thereof) of the principal
amount of Exchange Notes of a denomination larger than $1,000. (Sections 1103,
1104 and 1105).
MANDATORY REDEMPTION
Except as described below under "Repurchase at the Option of Holders
- -- Asset Dispositions" and "-- Change of Control," the Exchange Notes will not
have the benefit of any mandatory redemption or sinking fund obligations of the
Company.
REPURCHASE AT THE OPTION OF HOLDERS
ASSET DISPOSITIONS
The Company may not make, and may not permit any Restricted
Subsidiary to make, any Asset Disposition (other than an Asset Disposition
permitted under "Mergers, Consolidations and Certain Sales and Purchases of
Assets") unless: (i) the Company (or such Restricted Subsidiary, as the case may
be) receives consideration at the time of such disposition at least equal to the
fair market value of the shares or the assets disposed of, as determined in good
faith by the Board of Directors for any transaction (or series of transactions)
involving in excess of $1 million and not involving solely a sale of equipment
or other assets specifically contemplated by the Company's capital expenditure
budget previously approved by the Board of Directors; (ii) at least 75% of the
consideration received by the Company (or such Subsidiary) consists of (u) cash
or readily marketable cash equivalents, (v) the assumption of Debt or other
liabilities reflected on the consolidated balance sheet of the Company and its
Restricted Subsidiaries in accordance with generally accepted accounting
principles (excluding Debt or any other liabilities subordinate in right of
payment to the Exchange Notes) and release from all liability on such Debt or
other liabilities assumed, (w) assets used in, or stock or other ownership
interests in a Person that upon the consummation of such Asset Disposition
becomes a Restricted Subsidiary and will be principally engaged in, the business
of the Company or any of its Wholly Owned Restricted Subsidiaries as such
business is conducted immediately prior to such Asset Disposition or (x) any
combination thereof; and (iii) 100% of the Net Available Proceeds from such
Asset Disposition (including from the sale of any marketable cash equivalents
received therein) are applied by the Company or a Restricted Subsidiary (A)
first, within one year from the later of
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<PAGE> 45
the date of such Asset Disposition or the receipt of such Net Available
Proceeds, to repayment of Senior Debt of the Company or its Restricted
Subsidiaries then outstanding under any agreements or instruments which would
require such application or which would prohibit payments pursuant to Clause (B)
following; (B) second, to the extent Net Available Proceeds are not required to
be applied to Senior Debt as specified in Clause (A), to purchases of
Outstanding Exchange Notes pursuant to an Offer to Purchase (to the extent such
an offer is not prohibited by the terms of any Senior Debt then outstanding) at
a purchase price equal to 100% of their principal amount plus accrued interest
to the date of purchase (subject to the rights of Holders of record on the
relevant Regular Record Date to receive interest due on an Interest Payment Date
that is on or prior to the purchase date); and (C) third, to the extent of any
remaining Net Available Proceeds following completion of such Offer to Purchase,
to any other use as determined by the Company which is not otherwise prohibited
by the Indenture. (Section 1014).
Notwithstanding the foregoing, the Company will not be required to
comply with the provisions of the Indenture described in Clause (iii) of the
preceding paragraph (i) if the Net Available Proceeds (less any amounts
("Reinvested Amounts") invested within one year from the later of the date of
the related Asset Disposition or the receipt of such Net Available Proceeds in
assets that will be used in the business of the Company or any of its Wholly
Owned Restricted Subsidiaries as such business is conducted prior to such Asset
Disposition (determined by the Board of Directors in good faith) are less than
$50 million (such lesser amount to be carried forward on a cumulative basis for
purposes of determining the application of this paragraph) or (ii) to the extent
the Company elects to redeem the Exchange Notes with the Net Available Proceeds
pursuant to the third paragraph under "Optional Redemption." Notwithstanding the
foregoing, if any Restricted Subsidiary in which a Reinvested Amount is invested
becomes an Unrestricted Subsidiary thereafter, then such change in status will
be deemed an Asset Disposition with Net Available Proceeds of cash in an amount
equal to such Reinvested Amount, and such amount of cash will be applied
pursuant to Clause (iii) above (subject to this paragraph). (Section 1014).
Notwithstanding the foregoing, the Company will not be required to
comply with the requirements described in Clause (ii) of the second preceding
paragraph if the Asset Disposition is an Excepted Disposition.
Any Offer to Purchase required by the provisions described above will
be effected by the sending of the written terms and conditions thereof (the
"Offer Document"), by first class mail, to Holders of the Exchange Notes within
30 days after the date which is one year after the later of the date of such
Asset Disposition or the receipt of the related Net Available Proceeds. The form
of the Offer to Purchase and the requirements that a Holder must satisfy to
tender any Exchange Note pursuant to such Offer to Purchase are substantially
the same as those described below under "Change of Control."
CHANGE OF CONTROL
Within 30 days following the date the Company becomes aware of the
consummation of a transaction that results in a Change of Control (as defined
below), the Company will commence an Offer to Purchase all Outstanding Exchange
Notes, at a purchase price equal to 101% of their aggregate principal amount
plus accrued interest to the date of purchase (subject to the rights of Holders
of record on the relevant Regular Record Date to receive interest due on an
Interest Payment Date that is on or prior to the date of purchase). Such
obligation will not continue after a discharge of the Company or defeasance from
its obligations with respect to the Exchange Notes. See "Defeasance."
A "Change of Control" will be deemed to have occurred in the event
that, after the date of the Indenture, (i) any Person, or any Persons acting
together that would constitute a "group" (a "Group") for purposes of Section
13(d) of the Exchange Act, together with any Affiliates or Related Persons
thereof (other than any employee stock ownership plan), beneficially own 50% or
more of the total voting power of all classes of Voting Stock of Allied, (ii)
any Person or Group, together with any Affiliates or Related Persons thereof,
succeeds in having sufficient of its nominees elected to the Board of Directors
of Allied such that such nominees, when added to any existing director remaining
on the Board of Directors of Allied after such election who is an Affiliate or
Related Person of such Person or Group, will constitute a majority of the Board
of Directors of Allied, (iii) there occurs any transaction or series of related
transactions, and the beneficial owners of the Voting Stock of Allied
immediately prior to such transaction (or series) do not, immediately after such
transaction (or series), beneficially own Voting Stock representing more than
50% of the total voting power of all classes of Voting Stock of Allied (or in
the case of a transaction (or series) in which another entity becomes a
successor to Allied, of the successor entity) or (iv) the Company ceases to be a
Subsidiary of Allied. (Section 1015).
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<PAGE> 46
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Exchange Notes resulting from a Change of Control.
The terms of the Bank Agreement prohibit any repurchase of Exchange
Notes by the Company in the event of a Change of Control, unless all
indebtedness then outstanding under the Bank Agreement is first repaid. In order
to repay such indebtedness and repurchase the Exchange Notes, it may be
necessary for the Company to recapitalize and/or refinance some or all of its
outstanding indebtedness. There can be no assurance that such recapitalization
or refinancing, if required, would be accomplished on favorable terms, in a
timely manner or at all. Were any obligation of the Company to repurchase
Exchange Notes upon a Change of Control to result in a default under the Bank
Agreement, payments owing on the Exchange Notes could be blocked pursuant to the
subordination provisions of the Exchange Notes. See "Subordination."
Prior to the mailing of an Offer Document, the Company will in good
faith seek to obtain any required consents of the Holders of Senior Debt or
repay the outstanding obligations thereunder. The right of the Holders to
require the Company to purchase Exchange Notes pursuant to an Offer will be
subject to obtaining the requisite consents or making such repayment.
Within 30 days of a Change of Control, an Offer Document will be
sent, by first class mail, to Holders of the Exchange Notes, accompanied by such
information regarding the Company and its Subsidiaries as the Company in good
faith believes will enable such Holders to make an informed decision with
respect to the Offer to Purchase, which at a minimum will include (a) the most
recent annual and quarterly financial statements and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" contained in the
documents required to be filed with the Trustee pursuant to the provisions
described under "Certain Covenants -- Provision of Financial Information" below
(which requirements may be satisfied by delivery of such documents together with
the Offer to Purchase), (b) a description of material developments in the
Company's business subsequent to the date of the latest of such financial
statements referred to in Clause (a) (including a description of the events
requiring the Company to make the Offer to Purchase), (c) if applicable,
appropriate pro forma financial information concerning the Offer to Purchase and
the events requiring the Company to make the Offer to Purchase and (d) any other
information required by applicable law to be included therein. The Offer
Document will contain all instructions and materials necessary to enable Holders
of the Exchange Notes to tender Exchange Notes pursuant to the Offer to
Purchase. The Offer Document will also state (i) that a Change of Control has
occurred (or, if the Offer to Purchase is delivered in connection with an Asset
Disposition, that an Asset Disposition has occurred) and that the Company will
offer to purchase the Holder's Exchange Notes, (ii) the Expiration Date of the
Offer to Purchase, which will be, subject to any contrary requirements of
applicable law, not less than 30 days or more than 60 days after the date of
such Offer Document, (iii) the Purchase Date for the purchase of Exchange Notes
which will be within five Business Days after the Expiration Date, (iv) the
aggregate principal amount of Exchange Notes to be purchased (including, if less
than 100%, the manner by which such purchase has been determined pursuant to the
Indenture) and the purchase price and (v) a description of the procedure which a
Holder must follow to tender all or any portion of the Exchange Notes. (Sections
101 and 1016).
To tender any Exchange Note, a Holder must surrender such Exchange
Note at the place or places specified in the Offer Document prior to the close
of business on the Expiration Date (such Exchange Note being, if the Company or
the Trustee so requires, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing).
Holders will be entitled to withdraw all or any portion of Exchange Notes
tendered if the Company (or its Paying Agent) receives, not later than the close
of business on the Expiration Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Exchange Note the Holder tendered, the certificate number of the Exchange Note
the Holder tendered and a statement that such Holder is withdrawing all or a
portion of his tender. Any portion of an Exchange Note tendered must be tendered
in an integral multiple of $1,000 principal amount. (Section 101).
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REGISTRATION RIGHTS
The Company has entered into the Registration Rights Agreement
pursuant to which the Company agreed, for the benefit of the Holders of the
Notes and the Exchange Notes, to (i) file the Registration Statement under the
Securities Act relating to the Exchange Offer; (ii) use its best efforts to
cause the Registration Statement to become effective as soon as practicable, but
in no case later than June 28, 1997; (iii) use its best efforts to complete the
Exchange Offer promptly, but no later than 45 days after the date upon which the
Registration Statement became effective; (iv) hold the Exchange Offer open for
at least 30 days, and (v) issue Exchange Notes for all Notes validly tendered
and not withdrawn before the expiration of the Exchange Offer.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which is filed with the Commission as an exhibit to the
Registration Statement.
Under existing Commission interpretations, the Exchange Notes would
generally be freely transferable after the Exchange Offer without further
registration under the Securities Act, except that broker-dealers
("Participating Broker-Dealers") receiving Exchange Notes in the Exchange Offer
will be subject to a prospectus delivery requirement with respect to the resale
of those Exchange Notes. The Commission has taken the position that
Participating Broker-Dealers may fulfill their prospectus delivery requirements
with respect to the Exchange Notes (other than a resale of any unsold allotment
from the original sale of the Notes) by delivery of this Prospectus. Under the
Registration Rights Agreement, the Company is required to allow Participating
Broker-Dealers to use this Prospectus in connection with the resale of such
Exchange Notes. The Registration Statement will be kept effective for a period
of 90 days after the Exchange Offer has been completed in order to permit
resales of Exchange Notes acquired by broker-dealers in the Exchange Offer for
Notes acquired in after-market transactions. Each Holder of the Notes (other
than certain specified Holders) who wishes to exchange such Notes for Exchange
Notes in the Exchange Offer will be required to represent that any Exchange
Notes to be received by it will be acquired in the ordinary course of its
business, that at the time of the commencement of the Exchange Offer it has no
arrangement with any Person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Notes and that it is not an
Affiliate of the Company.
However, if on or before the date of consummation of the Exchange
Offer the existing Commission interpretations are changed such that the Exchange
Notes would not generally be freely transferable on such date, the Company will,
in lieu of effecting registration of Exchange Notes, use its best efforts to
file the Shelf Registration Statement as soon as practicable, but no later than
the later of 30 days after the time such obligation to file arises and February
28, 1997. The Company agrees to use its best efforts to cause the Shelf
Registration Statement to become or be declared effective no later than 120 days
after such Shelf Registration Statement is filed and to keep such Shelf
Registration Statement continuously effective for a period of three years after
the date the Shelf Registration Statement becomes or is declared effective. The
Company will, in the event the Shelf Registration Statement is filed, provide to
the Holders of the Notes copies of the prospectus that is a part of the Shelf
Registration Statement, notify such Holders when the Shelf Registration
Statement for the Notes has become effective and take certain other actions as
are required to permit unrestricted resales of the Notes. A Holder of Notes that
sells such Notes pursuant to the Shelf Registration Statement generally will be
required to be named as a selling securityholder in the related prospectus and
to deliver a prospectus to purchasers, will be subject to certain of the civil
liability provisions under the Securities Act in connection with such sales and
will be bound by the provisions of the Registration Rights Agreement that are
applicable to such a Holder (including certain indemnification obligations).
In the event that (i) the Company has not filed the Shelf
Registration Statement on or before any date on which such Shelf Registration
Statement is required to be filed; (ii) such Shelf Registration Statement has
not become effective or been declared effective by the Commission on or before
any date on which such Shelf Registration Statement is required to become or be
declared effective; or (iii) the Exchange Offer has not been completed within 45
days after the date upon which the Registration Statement became effective; or
(iv) the Registration Statement or any required Shelf Registration Statement is
filed and declared effective but shall thereafter either be withdrawn by the
Company or shall become subject to an effective stop order issued pursuant to
Section 8(d) of the Securities Act suspending the effectiveness of such
registration statement (except as specifically permitted in the Registration
Rights Agreement) without being succeeded immediately by an additional
registration statement filed and declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default" and each period during
which a Registration Default has occurred and is continuing, a "Registration
Default Period"), then, as liquidated damages for such Registration Default,
Special Interest, in addition to the base interest that would otherwise accrue
on the Notes,
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shall accrue at a per annum rate of 0.25% for the first 90 days of the
Registration Default Period, at a per annum rate of 0.50% for the second 90 days
of the Registration Default Period, at a per annum rate of 0.75% for the third
90 days of the Registration Default Period and at a per annum rate of 1.0%
thereafter for the remaining portion of the Registration Default Period. The
Special Interest will be payable in cash semiannually in arrears on each June 1
and December 1. Special Interest, if any, will be computed on the basis of a 365
or 366 day year, as the case may be, and the number of days actually elapsed.
SUBORDINATION
The payment of the principal of (and premium, if any) and interest
(including Special Interest) on the Exchange Notes will, in certain
circumstances as set forth in the Indenture, be subordinated in right of payment
to the prior payment in full of all Senior Debt of the Company. Upon any payment
or distribution of assets of the Company to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshalling of assets and liabilities or any bankruptcy, insolvency
or similar proceedings of the Company, the holders of Senior Debt of the Company
will be entitled to receive payment in full of the principal of (and premium, if
any) and interest on such Senior Debt, including all amounts due or to become
due on all such Senior Debt, or provision will be made for payment in cash or
cash equivalents or otherwise in a manner satisfactory to the holders of such
Senior Debt, before the Holders of Exchange Notes are entitled to receive any
Securities Payments. "Securities Payment" means any payment or distribution of
any kind, whether in cash, property or securities (including any payment or
distribution deliverable by reason of the payment of any other Debt subordinated
to the Exchange Notes but excluding any payment or distribution made from the
Collateral Account pursuant to the Collateral Agreement) on account of the
principal of (and premium, if any) or interest (including Special Interest) on
the Exchange Notes or on account of the purchase or redemption or other
acquisition of Exchange Notes by the Company, Allied or any Subsidiary of the
Company. In the event that, notwithstanding the foregoing, the Trustee or the
Holder of any Note receives any Securities Payment before all Senior Debt of the
Company is paid in full or payment thereof is provided for in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of such Senior
Debt, then and in such event such Securities Payment will be required to be paid
over or delivered forthwith to the holders of Senior Debt for application to the
payment of all Senior Debt of the Company remaining unpaid, to the extent
necessary to pay such Senior Debt in full. (Sections 1401 and 1402).
The Company may not make any Securities Payments if there has
occurred and is continuing a default in the payment of the principal of (or
premium, if any) or interest on Senior Debt of the Company or if there has
occurred and is continuing any event of default with respect to Senior Debt of
the Company which has resulted in such Senior Debt becoming or being declared
due and payable prior to the date on which it would otherwise have become due
and payable (a "Senior Payment Default"). In addition, if any default (other
than a Senior Payment Default), with respect to any Senior Debt of the Company
permitting after notice or lapse of time (or both) the holders thereof (or a
trustee on behalf thereof) to accelerate the maturity thereof (a "Senior
Nonmonetary Default") has occurred and is continuing and the Company and the
Trustee have received written notice thereof from the Agent Bank under the Bank
Agreement (or if such Agreement has been terminated, from any holder of Senior
Debt of the Company with a principal amount in excess of $50 million), then the
Company may not make any Securities Payments for a period (a "blockage period")
commencing on the date the Company and the Trustee receive such written notice
and ending on the earlier of (x) 179 days after such date and (y) the date, if
any, on which the Senior Debt of the Company to which such default relates is
discharged or such default is waived or otherwise cured. (Section 1403).
In any event, not more than one blockage period may be commenced
during any period of 360 consecutive days. No Senior Payment Default or Senior
Nonmonetary Default that existed or was continuing on the date of commencement
of any blockage period with respect to the Senior Debt of the Company will be,
or can be, made the basis for the commencement of a subsequent blockage period,
unless such default has been cured for a period of not less than 90 consecutive
days. In the event that, notwithstanding the foregoing, the Company makes any
Securities Payment to the Trustee or any Holder of a Exchange Note prohibited by
the subordination provisions, then and in such event such Securities Payment
will be required to be paid over and delivered forthwith to the holders of the
Senior Debt of the Company. (Section 1403).
By reason of such subordination, in the event of insolvency,
creditors of the Company who are not holders of Senior Debt of the Company or of
the Exchange Notes may recover less, ratably, than holders of such Senior Debt
and may recover more, ratably, than the Holders of the Exchange Notes.
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The subordination provisions described above will cease to be
applicable to the Exchange Notes upon any defeasance or covenant defeasance of
the Exchange Notes as described under "Defeasance."
At December 31, 1996, pro forma for the Canadian Sale and application
of the proceeds thereof, there was $______ million of Senior Debt of the Company
outstanding, which would have been guaranteed by Guarantors on a senior basis.
While the Indenture will limit, subject to certain financial tests, the amount
of additional Debt that the Company and its Restricted Subsidiaries can Incur,
the Company may from time to time hereafter incur additional Debt constituting
Senior Debt under the Bank Agreement. See "Certain Covenants -- Limitation on
Consolidated Debt."
SENIOR SUBORDINATED GUARANTEES
The Guarantors will, jointly and severally, on a senior subordinated
basis, unconditionally guarantee the due and punctual payment of principal of
(and premium, if any) and interest (including Special Interest) on the Exchange
Notes, when and as the same shall become due and payable, whether at the
maturity date, by declaration of acceleration, call for redemption or otherwise.
Each of the Guarantors will further agree, jointly and severally and on a senior
subordinated basis, that any amounts to be paid by the Guarantors under the
Senior Subordinated Guarantees will be paid without deduction or withholding for
or on account of any and all present or future tax, duty, assessment or
governmental charge imposed upon or as a result of such payment by the
Government of Canada, or any province or other political subdivision or taxing
authority thereof or therein, or if deduction or withholding of any such tax,
duty, assessment or charge shall at any time be required by or on behalf of the
Government of Canada or any such province, political subdivision or taxing
authority, the Subsidiary Guarantors will pay such additional amount in respect
of principal and interest as may be necessary in order that the net amounts paid
to the holders of the Exchange Notes or the Trustee, as the case may be,
pursuant to the Senior Subordinated Guarantees after such deduction or
withholding shall not be less than the amount provided for in the Exchange Notes
to be then due and payable; except that no such additional amount shall be
payable in respect of any Exchange Notes to any Holder (a) who is subject to
such tax, duty, assessment or governmental charge in respect of such Exchange
Notes by reason of his being connected with Canada otherwise than merely by the
holding or ownership of such Exchange Notes, or (b) who is not dealing at arm's
length with any of the Subsidiary Guarantors (within the meaning of the Income
Tax Act (Canada) as reenacted or amended from time to time). (Section 1301).
The Senior Subordinated Guarantees of any Guarantor will be
subordinate in right of payment to the prior payment in full of all Senior Debt
of such Guarantor to substantially the same extent as the Exchange Notes are
subordinated to Senior Debt of the Company. No payment will be made by any
Guarantor under its Senior Subordinated Guarantee in respect of the Exchange
Notes during any period that payments by the Company on the Exchange Notes are
suspended by the subordination provisions of the Indenture. See "Subordination."
(Sections 1401,1402 and 1403).
The Senior Subordinated Guarantees will remain in effect with respect
to each Guarantor until the entire principal of, premium, if any, and interest
on the Exchange Notes shall have been paid in full or otherwise discharged in
accordance with the provisions of the Indenture; provided, however, that if (i),
with respect to each Guarantor, the Exchange Notes are defeased and discharged
as described under Clause (A) under "Defeasance" or (ii), with respect to each
Subsidiary Guarantor, such Subsidiary Guarantor (x) ceases to be a Restricted
Subsidiary or (y) all or substantially all of the assets of such Subsidiary
Guarantor or all of the Capital Stock of such Subsidiary Guarantor is sold
(including by issuance, merger, consolidation or otherwise) by the Company or
any of its Subsidiaries in a transaction constituting an Asset Disposition and
the Net Available Proceeds from such Asset Disposition are used in accordance
with the provisions described under "Repurchase at the Option of Holders --
Asset Dispositions," then in each case of (i) and (ii) above, such Guarantor or
the corporation acquiring such assets (in the event of a sale or other
disposition of all or substantially all of the assets of such Subsidiary
Guarantor) shall be released and discharged of its Senior Subordinated Guarantee
obligations.
Subject to payment in full of all Senior Debt of any Guarantor, the
rights of the Holders of the Exchange Notes under the related Senior
Subordinated Guarantees of such Guarantor will be subrogated to the rights of
the holders of such Senior Debt to receive payments or distributions of cash,
property or securities of the Guarantors applicable to Senior Debt of such
Guarantor.
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CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
LIMITATION ON CONSOLIDATED DEBT
The Company may not Incur any Debt and may not permit Restricted
Subsidiaries to Incur any Debt or issue Preferred Stock unless, immediately
after giving effect to the Incurrence of such Debt or issuance of such Preferred
Stock and the receipt and application of the proceeds thereof, the Consolidated
EBITDA Coverage Ratio of the Company for the four full fiscal quarters next
preceding the Incurrence of such Debt or issuance of such Preferred Stock,
calculated on a pro forma basis as if such Debt had been Incurred or such
Preferred Stock had been issued and the proceeds thereof had been received and
so applied at the beginning of the four full fiscal quarters, would be greater
than 2.0 to 1.0 if such Incurrence is on or prior to December 31, 1999 and 2.25
to 1.0 if thereafter. (Section 1008).
Without regard to the foregoing limitations, the Company or any
Restricted Subsidiary of the Company may Incur the following Debt:
(i) Debt under the Bank Agreement in an aggregate principal amount at
any one time outstanding not to exceed the Bank Facility Limit then
in effect;
(ii) Debt evidenced by the Exchange Notes;
(iii) Debt evidenced by the Allied Canada Debentures;
(iv) Debt owed by the Company to any Restricted Subsidiary or Debt
owed by a Restricted Subsidiary to the Company or to a Restricted
Subsidiary; provided, however, that in the event that either (x) the
Company or the Restricted Subsidiary to which such Debt is owed
transfers or otherwise disposes of such Debt to a Person other than
the Company or another Restricted Subsidiary or (y) such Restricted
Subsidiary ceases to be a Restricted Subsidiary, the provisions of
this Clause (iv) shall no longer be applicable to such Debt and such
Debt shall be deemed to have been Incurred at the time of such
transfer or other disposition or at the time such Restricted
Subsidiary ceases to be a Restricted Subsidiary;
(v) Debt outstanding on the date of the Indenture;
(vi) Debt Incurred in connection with an acquisition, merger or
consolidation transaction permitted under the provisions of the
Indenture described under "Mergers, Consolidations and Certain Sales
and Purchases of Assets," which Debt (A) was issued by a Person prior
to the time such Person becomes a Restricted Subsidiary in such
transaction (including by way of merger or consolidation with the
Company or another Restricted Subsidiary) and was not issued in
contemplation of such transaction or (B) is issued by the Company or
a Restricted Subsidiary to a seller in connection with such
transaction, in an aggregate amount for all such Debt issued pursuant
to the provisions of the Indenture described under this Clause (vi)
not to exceed $50 million at any one time outstanding;
(vii) Debt consisting of Permitted Interest Rate or Currency
Protection Agreements;
(viii) Debt Incurred to renew, extend, refinance or refund any
outstanding Debt permitted in Clauses (i) through (vi) above;
provided, however, that such Debt does not exceed the principal
amount of Debt so renewed, extended, refinanced or refunded; and
provided further, that Debt the proceeds of which are used to
refinance or refund Debt which is pari passu to the Exchange Notes or
Debt which is subordinate in right of payment to the Exchange Notes
shall only be permitted if (A) in the case of any refinancing or
refunding of Debt which is pari passu to the Exchange Notes, the
refinancing or refunding Debt is made pari passu to the Exchange
Notes or subordinated to the Exchange Notes, and, in the case of any
refinancing or refunding of Debt which is subordinated to the
Exchange Notes, the refinancing or refunding Debt is made subordinate
to the Exchange Notes to substantially the same extent as, or a
greater extent than, the Exchange Notes are subordinated to Senior
Debt of the Company as described under the subordination
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provisions described under "Subordination" above and (B) such
refinancing or refunding Debt (x) does not have a final Stated
Maturity earlier than the final Stated Maturity of the refinanced or
refunded Debt or permit redemption or other retirement of such Debt
(including pursuant to an offer to purchase by the Company) at the
option of the holder thereof prior to the final Stated Maturity of
the Debt being refinanced or refunded, other than a redemption or
other retirement at the option of the holder of such Debt on terms
and in circumstances that are substantially similar to those on and
in which the Debt being refinanced may be redeemed or otherwise
retired and (y) does not have a Weighted Average Life less than the
Weighted Average Life of the Debt being refinanced; and
(ix) Debt not otherwise permitted to be Incurred pursuant to Clauses
(i) through (viii) above, which, in aggregate amount, together with
the aggregate amount of all other Debt previously Incurred pursuant
to the provisions of the Indenture described under this Clause (ix)
and then outstanding, does not exceed 5% of the Consolidated Total
Assets of the Company at the time of such Incurrence. (Section 1008).
Notwithstanding the foregoing, the Company may not permit Allied
Insurance to Incur any Debt other than reimbursement obligations with respect to
letters of credit and other financial assurance obligations issued to enable
Allied Insurance to issue insurance policies for the benefit of the Company and
its Restricted Subsidiaries.
LIMITATION ON LAYERED AND JUNIOR DEBT
The Indenture provides that, so long as any of the Exchange Notes are
Outstanding, (i) the Company may not incur or suffer to exist any Debt that is
by its terms subordinate in right of payment to any other Debt of the Company
unless such Debt is also pari passu with, or subordinate by its terms in right
of payment to, the Exchange Notes and (ii) Allied may not, and the Company may
not permit any Subsidiary Guarantor to, Incur or suffer to exist any Debt that
is by its terms subordinate in right of payment to any other Debt of Allied or
the Subsidiary Guarantor, as the case may be, unless such Debt is also pari
passu with or subordinate by its terms in right of payment to the Senior
Subordinated Guarantees of Allied or the Subsidiary Guarantor, as the case may
be. (Section 1009).
LIMITATION ON RESTRICTED PAYMENTS
The Company may not, and may not permit any Restricted Subsidiary to,
directly or indirectly, (i) declare or pay any dividend, or make any
distribution, of any kind or character (whether in cash, property or securities)
in respect of the Capital Stock of the Company or any Restricted Subsidiary or
to the holders thereof in their capacity as such (excluding any dividends or
distributions (u) to the extent payable in shares of the Capital Stock of the
Company (other than Redeemable Interests) or in options, warrants or other
rights to acquire the Capital Stock of the Company (other than Redeemable
Interests), (v) dividends or distributions by a Restricted Subsidiary to the
Company or another Wholly Owned Restricted Subsidiary and (w) the payment of pro
rata dividends by a Restricted Subsidiary to holders of both minority and
majority interests in such Restricted Subsidiary), (ii) purchase, redeem or
otherwise acquire or retire for value (a) any Capital Stock of the Company or
any Capital Stock of or other ownership interests in any Subsidiary or any
Affiliate or Related Person of the Company or (b) any options, warrants or
rights to purchase or acquire shares of Capital Stock of the Company or any
Capital Stock of or other ownership interests in any Subsidiary or any Affiliate
or Related Person of the Company (excluding, in each case of (a) and (b), the
purchase, redemption, acquisition or retirement by any Restricted Subsidiary of
any of its Capital Stock, other ownership interests or options, warrants or
rights to purchase such Capital Stock or other ownership interests, in each
case, owned by the Company or a Wholly Owned Restricted Subsidiary), (iii) make
any Investment that is not a Permitted Investment or (iv) redeem, defease,
repurchase, retire or otherwise acquire or retire for value prior to any
scheduled maturity, repayment or sinking fund payment, Debt of the Company
(other than the Exchange Notes) that is pari passu with or subordinate in right
of payment to the Exchange Notes (each of the transactions described in Clauses
(i) through (iv) being a "Restricted Payment"), if:
(1) an Event of Default, or an event that with the lapse of time or
the giving of notice, or both, would constitute an Event of Default,
shall have occurred and be continuing;
(2) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the most recently ended four full
fiscal quarter period for which internal financial statements are
available immediately preceding the date of such Restricted Payment,
not have been
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permitted to Incur at least $1.00 of additional Debt pursuant to the
Consolidated EBITDA Coverage Ratio test set forth in the first
paragraph under "Limitation on Consolidated Debt" above; or
(3) upon giving effect to such Restricted Payment, the aggregate of
all Restricted Payments (excluding Restricted Payments permitted by
Clauses (ii) and (iii) of the next succeeding paragraph) from the
date of the Indenture (the amount so expended, if other than in cash,
determined in good faith by the Board of Directors) exceeds the sum,
without duplication, of: (a) 50% of the aggregate Consolidated Net
Income (or, in case Consolidated Net Income shall be negative, less
100% of such deficit) for the period (taken as one accounting period)
from the beginning of the first fiscal quarter commencing after the
date of the Indenture to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are available
at the time of such Restricted Payment; (b) 100% of the aggregate net
cash proceeds from the issuance and sale to Allied of Capital Stock
(other than Redeemable Interests) of the Company and options,
warrants or other rights to acquire Capital Stock (other than
Redeemable Interests and Debt convertible into Capital Stock) of the
Company and the principal amount of Debt and Redeemable Interests of
the Company that has been converted into Capital Stock (other than
Redeemable Interests) of the Company after the date of the Indenture,
provided that any such net proceeds received by the Company from an
employee stock ownership plan financed by loans from the Company or a
Subsidiary of the Company shall be included only to the extent such
loans have been repaid with cash on or prior to the date of
determination; (c) 50% of any dividends received by the Company or a
Wholly Owned Restricted Subsidiary after the date of the Indenture
from an Unrestricted Subsidiary of the Company; and (d) $10 million.
(Section 1010).
The foregoing covenant will not be violated by reason of:
(i) the payment of any dividend within 60 days after declaration
thereof if at the declaration date such payment would have complied
with the foregoing covenant;
(ii) any refinancing or refunding of Debt permitted pursuant to
clause (viii) of the second paragraph under "Limitation on
Consolidated Debt" above; and
(iii) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of the Company or any options, warrants or
rights to purchase or acquire shares of Capital Stock of the Company
in exchange for, or out of the net cash proceeds of, the
substantially concurrent issuance or sale (other than to a Restricted
Subsidiary of the Company) of Capital Stock (other than Redeemable
Interests) of the Company; provided that the amount of any such net
cash proceeds that are utilized for any such purchase, redemption or
other acquisition or retirement for value shall be excluded from
Clause (3)(b) in the foregoing paragraph.
Upon the designation of any Restricted Subsidiary as an Unrestricted
Subsidiary, an amount equal to the greater of the book value and the fair market
value of all assets of such Restricted Subsidiary at the end of the Company's
most recently ended fiscal quarter for which internal financial statements are
available prior to such designation will be deemed to be a Restricted Payment at
the time of such designation for purposes of calculating the aggregate amount of
Restricted Payments (including the Restricted Payment resulting from such
designation) permitted under provisions described in the second preceding
paragraph. (Section 1010).
LIMITATIONS CONCERNING DISTRIBUTIONS BY SUBSIDIARIES, ETC.
The Company may not, and may not permit any Restricted Subsidiary to,
suffer to exist any consensual encumbrance or restriction on the ability of such
Restricted Subsidiary (i) to pay, directly or indirectly, dividends or make any
other distributions in respect of its Capital Stock or other ownership interests
or pay any Debt or other obligation owed to the Company or any other Restricted
Subsidiary; (ii) to make loans or advances to the Company or any other
Restricted Subsidiary; or (iii) to sell, lease or transfer any of its property
or assets to the Company or any Wholly Owned Restricted Subsidiary, except, in
any such case, any encumbrance or restriction: (a) pursuant to the Exchange
Notes, the Indenture, the Senior Subordinated Guarantees or any other agreement
in effect on the date of the Indenture, (b) pursuant to the Bank Agreement,
including any Guarantees of or Liens securing the Senior Debt Incurred
thereunder, (c) pursuant to an agreement relating to any Debt Incurred by such
Subsidiary prior to the date on which such Subsidiary was acquired by the
Company and outstanding on such date and not
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Incurred in anticipation of becoming a Subsidiary, (d) pursuant to an agreement
which has been entered into for the pending sale or disposition of all or
substantially all of the Capital Stock, other ownership interests or assets of
such Subsidiary, provided that such restriction terminates upon consummation or
abandonment of such disposition and upon termination of such agreement, (e)
pursuant to customary non-assignment provisions in leases entered into in the
ordinary course of business, (f) pursuant to purchase money obligations for
property acquired in the ordinary course of business or liens in connection
therewith permitted to be Incurred under "-- Limitation on Liens" that impose
restrictions of the nature described in Clause (iii) above on the property so
acquired or (g) pursuant to an agreement effecting a renewal, extension,
refinancing or refunding of Debt Incurred pursuant to an agreement referred to
in Clause (a) or (b) above; provided, however, that the provisions relating to
such encumbrance or restriction contained in such renewal, extension,
refinancing or refunding agreement are no more restrictive in any material
respect than the provisions contained in the agreement it replaces, as
determined in good faith by the Board of Directors. (Section 1011).
LIMITATION ON LIENS
Allied may not, and the Company may not, and may not permit any
Restricted Subsidiary to, Incur any Lien on property or assets of Allied, the
Company or such Restricted Subsidiary to secure Debt that is pari passu or
subordinate in right of payment to the Exchange Notes or the Senior Subordinated
Guarantees without making, or causing such Restricted Subsidiary to make,
effective provision for securing the Exchange Notes or the Senior Subordinated
Guarantees, as the case may be (and, if the Company may so determine, any other
Debt of the Company or of such Subsidiary that is not pari passu or subordinate
to the Exchange Notes or the Senior Subordinated Guarantees), (i) in the case of
Debt that is pari passu with the Exchange Notes or the Senior Subordinated
Guarantees, as the case may be, pari passu with such Debt and (ii) in the case
of Debt that is subordinated in right of payment to the Exchange Notes or the
Senior Subordinated Guarantees, as the case may be, prior to such Debt, in each
case, as to such property for so long as such Debt will be so secured. (Section
1012).
LIMITATION ON TRANSACTIONS WITH AFFILIATES AND RELATED PERSONS
The Company may not, and may not permit any Restricted Subsidiary of
the Company to, directly or indirectly, enter into any transaction (or series of
related transactions) after the date of the Indenture with any Affiliate or
Related Person unless (i) such Affiliate or Related Person is (both before and
after such transaction) (a) Allied or a Wholly Owned Restricted Subsidiary of
the Company or (b) another Restricted Subsidiary of the Company, the minority
interests in which are not held by any Affiliate or Related Person; or (ii)
where the total consideration given or to be provided by the Company or such
Restricted Subsidiary in or pursuant to such transaction (or series) (including
cash, the fair value of non-cash property and the assumption of Debt) (a) will
be no more than $1 million, the Chief Executive Officer, the Chief Operating
Officer or the Chief Financial Officer certifies in an Officer's Certificate
that the terms of the transaction (or series) are in the best interests of the
Company or such Restricted Subsidiary and are no less favorable to the Company
or such Restricted Subsidiary than those that could be obtained in a comparable
arm's-length transaction with an entity that is not an Affiliate or Related
Person, (b) will be in excess of $1 million but no more than $5 million, a
majority of the disinterested members of the Board of Directors determines in
its good faith judgment that the terms of the transaction are in the best
interests of the Company or such Restricted Subsidiary and are no less favorable
to the Company or such Restricted Subsidiary than those that could be obtained
in a comparable arm's-length transaction with an entity that is not an Affiliate
or a Related Person; or (c) will be in excess of $5 million, a nationally
recognized investment banking firm (which may not be an Affiliate or Related
Person of the Company), in a written opinion delivered to the Board of Directors
prior to consummation of such transaction (or series) that the terms of the
transaction (or series) are in the best interests of the Company or such
Restricted Subsidiary and are no less favorable to the Company or such
Restricted Subsidiary than those that could be obtained in a comparable
arm's-length transaction with an entity that is not an Affiliate or Related
Person; provided, however, that the foregoing restriction will not apply to the
Intercompany Agreements as in effect on the date of the Indenture or the
transactions contemplated thereby. (Section 1013).
LIMITATION ON SALE OF CAPITAL STOCK OF SUBSIDIARIES
The Company may not, and may not permit any Restricted Subsidiary to,
issue, transfer, convey, lease or otherwise dispose of any shares of Capital
Stock of or other ownership interests in a Restricted Subsidiary or securities
convertible or exchangeable into, or options, warrants, rights or any other
interest with respect to, Capital Stock of or other ownership interests in a
Restricted Subsidiary to any Person (other than the Company or a Wholly Owned
Restricted Subsidiary) except in a that
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consists of a sale of all of the Capital Stock of or other ownership interests
in such Subsidiary owned by the Company and any Subsidiary of the Company and
that complies with the provisions described under "Repurchase at the Option of
Holders -- Asset Dispositions" above to the extent such provisions apply.
(Section 1019).
RESTRICTION ON BUSINESS AND INCURRENCE OF DEBT BY ALLIED FINANCE
Allied Finance may not, and Allied may not permit Allied Finance to,
engage in any activities, transactions or business, including, without
limitation, the Incurrence of any Debt, provided that the foregoing will not
prohibit Allied Finance from (i) holding the Allied Canada Debentures and (ii)
engaging in any other activities and transactions that are directly related to
its status as an obligor under the Allied Finance Debentures or its status as a
holder of the Allied Canada Debentures. (Section 1020).
PROVISION OF FINANCIAL INFORMATION
Whether or not the Company is required to be subject to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, or any successor provision
thereto, the Company will file with the Commission the annual reports, quarterly
reports and other documents which the Company would have been required to file
with the Commission pursuant to such Section 13(a) or 15(d) or any successor
provision thereto if the Company were so required, such documents to be filed
with the Commission on or prior to the respective dates (the "Required Filing
Dates") by which the Company would have been required so to file such documents
if the Company were so required. The Company shall also in any event (a) within
15 days of each Required Filing Date (i) transmit by mail to all Holders, as
their names and addresses appear in the Security Register, without cost to such
Holders, and (ii) file with the Trustee, copies of the annual reports, quarterly
reports and other documents which the Company files with the Commission pursuant
to such Section 13(a) or 15(d) or any successor provisions thereto or would have
been required to file with the Commission pursuant to such Section 13(a) or
15(d) or any successor provisions thereto if the Company were required to comply
with such Sections and (b) if filing such documents by the Company with the
Commission is not permitted under the Securities Exchange Act of 1934, promptly
upon written request supply copies of such documents to any prospective Holder.
(Section 1016).
UNRESTRICTED SUBSIDIARIES
The Company at any time may designate any Person that is a
Subsidiary, or after the date of the Indenture becomes a Subsidiary, of the
Company as an "Unrestricted Subsidiary," whereupon (and until such Person ceases
to be an Unrestricted Subsidiary) such Person and each other Person that is then
or thereafter becomes a Subsidiary of such Person will be deemed to be an
Unrestricted Subsidiary. In addition, the Company may at any time terminate the
status of any Unrestricted Subsidiary as an Unrestricted Subsidiary, whereupon
such Subsidiary and each other Subsidiary of the Company (if any) of which such
Subsidiary is a Subsidiary will be a Restricted Subsidiary. (Section 1018).
Notwithstanding the foregoing, no change in the status of a
Subsidiary of the Company from a Restricted Subsidiary to an Unrestricted
Subsidiary or from an Unrestricted Subsidiary to a Restricted Subsidiary will be
effective, and no Person may otherwise become a Restricted Subsidiary, if:
(i) the Consolidated EBITDA Coverage Ratio of the Company for the
four full fiscal quarters of the Company next preceding the effective
date of such purported change or other event, calculated on a pro
forma basis as if such change or other event had been effective at
the beginning of such period, would not exceed 2.0 to 1.0 if such
purported change is to occur on or prior to December 31, 1999 and
2.25 to 1.0 if thereafter;
(ii) in the case of any change in status of a Restricted Subsidiary
to an Unrestricted Subsidiary, the Restricted Payment resulting from
such change, would violate the provisions of the Indenture described
under Clause (3) of the first paragraph under "Limitation on
Restricted Payments" above; or
(iii) such change or other event would otherwise result (after the
giving of notice or the lapse of time, or both) in an Event of
Default.
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In addition and notwithstanding the foregoing, no Restricted
Subsidiary of the Company may become an Unrestricted Subsidiary, and the status
of any Unrestricted Subsidiary as an Unrestricted Subsidiary will be deemed to
have been immediately terminated (whereupon such Subsidiary and each other
Subsidiary of the Company (if any) of which such Subsidiary is a Subsidiary will
be a Restricted Subsidiary) at any time when:
(i) such Subsidiary (A) has outstanding Debt that is Unpermitted Debt
or (B) owns or holds any Capital Stock of or other ownership
interests in, or a Lien on any property or other assets of, the
Company or any of its Restricted Subsidiaries;
(ii) the Company or any other Restricted Subsidiary (A) provides
credit support for, or a Guaranty of, any Debt of such Subsidiary
(including any undertaking, agreement or instrument evidencing such
Debt) or (B) is directly or indirectly liable for any Debt of such
Subsidiary; or
(iii) such Subsidiary fails to notify in writing the holders of its
Debt for borrowed money that such Debt is without recourse to the
property and assets of the Company and its Restricted Subsidiaries.
Any termination of the status of an Unrestricted Subsidiary as an
Unrestricted Subsidiary pursuant to the preceding sentence will be
deemed to result in a breach of this covenant in any circumstance in
which the Company would not be permitted to change the status of such
Unrestricted Subsidiary to the status of a Restricted Subsidiary
pursuant to the provision of the Indenture described under the
preceding paragraph. "Unpermitted Debt" means any Debt of a
Subsidiary of the Company if (x) a default thereunder (or under any
instrument or agreement pursuant to or by which such Debt is issued,
secured or evidenced), or any right that the holders thereof may have
to take enforcement action against such Subsidiary or its property or
other assets, would permit (whether or not after the giving of notice
or the lapse of time or both) the holders of any Debt of the Company
or any other Restricted Subsidiary to declare the same due and
payable prior to the date on which it otherwise would have become due
and payable or otherwise to take any enforcement action against the
Company or any such other Restricted Subsidiary or (y) such Debt is
secured by a Lien on any property or other assets of the Company and
any of its other Restricted Subsidiaries. (Section 1018).
Each Person that is or becomes a Subsidiary of the Company will be
deemed to be a Restricted Subsidiary at all times when it is a Subsidiary of the
Company that is not an Unrestricted Subsidiary. Each Person that is or becomes a
Wholly Owned Subsidiary of the Company shall be deemed to be a Wholly Owned
Restricted Subsidiary at all times when it is a Wholly Owned Subsidiary of the
Company that is not an Unrestricted Subsidiary. (Section 1018).
MERGERS, CONSOLIDATIONS AND CERTAIN SALES AND PURCHASES OF ASSETS
The Company (i) may not, and may not permit any Restricted Subsidiary
to, consolidate with or merge into any Person, in the case of a Restricted
Subsidiary, in a transaction in which such Restricted Subsidiary remains a
Restricted Subsidiary, unless such Restricted Subsidiary consolidates with or
merges into a Wholly Owned Restricted Subsidiary; (ii) may not permit any Person
other than a Wholly Owned Restricted Subsidiary to consolidate with or merge
into the Company or any Restricted Subsidiary (in a transaction in which such
Restricted Subsidiary remains a Restricted Subsidiary); (iii) may not, directly
or indirectly, in one or a series of transactions, transfer, convey, sell, lease
or otherwise dispose of all or substantially all of the properties and assets of
the Company and its Subsidiaries on a consolidated basis; (iv) may not, and may
not permit any Restricted Subsidiary of the Company to, acquire Capital Stock of
or other ownership interests in any other Person such that such other Person
becomes a Restricted Subsidiary (excluding the Acquisition and other
transactions with an aggregate purchase price of not more than $50 million with
respect to the consummation of which, as of the date of the Indenture, the
Company has entered into a letter of intent, option or other contract); and (v)
may not, and may not permit any Restricted Subsidiary of the Company to,
purchase, lease or otherwise acquire all or substantially all of the properties
and assets of any Person or any existing business (whether existing as a
separate entity, subsidiary, division, unit or otherwise) of any Person
(excluding the Acquisition and other transactions with an aggregate purchase
price of not more than $50 million with respect to the consummation of which, as
of the date of the Indenture, the Company has entered into a letter of intent,
option or other contract) unless, in each case (i), (ii), (iii), (iv) and (v)
above:
(1) immediately before and after giving effect to such transaction
(or series) and treating any Debt Incurred by the Company or a
Subsidiary of the Company as a result of such transaction (or series)
as having been Incurred by the
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Company or such Subsidiary at the time of the transaction (or
series), no Event of Default, or event that with the passing of time
or the giving of notice, or both, will constitute an Event of
Default, shall have occurred and be continuing;
(2) in a transaction (or series) in which the Company does not
survive or in which the Company transfers, conveys, sells, leases or
otherwise disposes of all or substantially all of its properties and
assets, the successor entity is a corporation, partnership, limited
liability company or trust and is organized and validly existing
under the laws of the United States of America, any State thereof or
the District of Columbia and expressly assumes, by a supplemental
indenture executed and delivered to the Trustee in form satisfactory
to the Trustee, all the Company's obligations under the Indenture;
(3) immediately after giving effect to such transaction (or series),
the Company or the successor entity would have a Consolidated Net
Worth equal to or greater than 90% of the Consolidated Net Worth of
the Company immediately prior to such transaction (or series);
(4) either (x) the Company or the successor entity would, at the time
of such transaction (or series) and after giving pro forma effect
thereto as if such transaction (or series) had occurred at the
beginning of the most recently ended four full fiscal quarter period
for which internal financial statements are available immediately
preceding the date of such transaction (or series), have been
permitted to Incur at least $1.00 of additional Debt pursuant to the
Consolidated EBITDA Coverage Ratio test set forth in the first
paragraph under "Certain Covenants -- Limitation on Consolidation
Debt" above or (y) the Consolidated EBITDA Coverage Ratio of the
Company or the successor entity for the most recently ended four full
fiscal quarter period for which internal financial statements are
available immediately preceding the date of such transaction (or
series), calculated on a pro forma basis as if such transaction (or
series) had occurred at the beginning of such four full fiscal
quarter period, would be no less than such Consolidated EBITDA
Coverage Ratio, calculated without giving effect to such transaction
or series or any other transactions (or series) that is subject to
the provisions of the Indenture described in this paragraph and that
occurred after the later of the Acquisition Closing and the date that
is twelve months before the date of such transaction (or series);
(5) if, as a result of any such transaction, property or assets of
the Company or any Restricted Subsidiary of the Company would become
subject to a Lien prohibited by the "Certain Covenants -- Limitation
on Liens" covenant, the Company or the successor entity will have
secured the Exchange Notes as required by such covenant; and
(6) unless such transaction (or series) is referred to in Clauses
(iii) or (iv) and involves an aggregate purchase price of less than
$50 million, the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel as specified in the Indenture.
(Section 801).
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture: (a)
failure to pay any interest on any Exchange Note when due (whether or not
prohibited by the subordination provisions described under "Subordination"
above), continued for 30 days; (b) failure to pay principal of (or premium, if
any, on) any Exchange Note when due (whether or not prohibited by the
subordination provisions described under "Subordination" above); (c) failure to
perform or comply with the provisions described under "Mergers, Consolidations
and Certain Sales and Purchases of Assets" or the provisions described under
"Repurchase at the Option of Holders -- Asset Dispositions" and "-- Change of
Control;" (d) failure to perform any other covenant or warranty of the Company
or any Guarantor in the Indenture or the Exchange Notes, continued for 60 days
after written notice from Holders of at least 10% in principal amount of the
Outstanding Exchange Notes as provided in the Indenture; (e) a default or
defaults under any bonds, debentures, Exchange Notes or other evidences of, or
obligations constituting, Debt by the Company, any Guarantors or any Restricted
Subsidiary or under any mortgages, indentures, instruments or agreements under
which there may be issued or existing or by which there may be secured or
evidenced any Debt of the Company, the Guarantors or any Restricted Subsidiary
with a principal or similar amount then outstanding, individually or in the
aggregate, in excess of $25 million, whether such Debt now exists or is
hereafter created, which default or defaults constitute a failure to pay any
portion of the principal or similar amount of such Debt when due and payable
after the expiration of any applicable grace period with respect thereto or will
have resulted in such Debt becoming or being declared due and payable prior to
the date on which it would otherwise have become due and payable; (f) the
rendering of a final judgment or judgments (not subject to appeal) against the
Company, the
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Parent Guarantor or any of its Restricted Subsidiaries in an aggregate amount in
excess of $25 million which remains unstayed, undischarged or unbonded for a
period of 60 days thereafter; and (g) certain events of bankruptcy, insolvency
or reorganization affecting the Company, the Parent Guarantor or any Restricted
Subsidiary of the Company. (Section 501).
Subject to the provisions of the Indenture relating to the duties of
the Trustee in case an Event of Default occurs and is continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such Holders
have offered to the Trustee reasonable indemnity. (Section 603). Subject to such
provisions for the indemnification of the Trustee and certain other conditions
provided in the Indenture, the Holders of a majority in aggregate principal
amount of the Outstanding Exchange Notes will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee. (Section
512).
If an Event of Default (other than an Event of Default of the type
described in Clause (g) above) occurs and is continuing, either the Trustee or
the Holders of at least 25% in aggregate principal amount of the Outstanding
Exchange Notes may accelerate the maturity of all Exchange Notes, and if an
Event of Default of the type described in Clause (g) above occurs, the principal
of and any accrued interest on the Exchange Notes then outstanding will become
immediately due and payable; provided, however, that after such acceleration,
but before a judgment or decree based on acceleration, the Holders of a majority
in aggregate principal amount of Outstanding Exchange Notes may, under certain
circumstances, rescind and annul such acceleration if all Events of Default,
other than the non-payment of accelerated principal, have been cured or waived
as provided in the Indenture. (Section 502). For information as to waiver of
defaults, see "Modification and Waiver."
No Holder of any Exchange Note will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder has previously given to the Trustee written notice of a continuing
Event of Default and unless also the Holders of at least 25% in aggregate
principal amount of the Outstanding Exchange Notes have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee has not received from the Holders of a majority in
aggregate principal amount of the Outstanding Exchange Notes a direction
inconsistent with such request and has failed to institute such proceeding
within 60 days. However, such limitations do not apply to a suit instituted by a
Holder of an Exchange Note for enforcement of payment of the principal of (and
premium, if any) or interest on such Exchange Note on or after the respective
due dates expressed in such Exchange Note. (Section 507 and 508).
In the case of any Event of Default occurring by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Exchange Notes
pursuant to the provisions described above under "Optional Redemption," an
equivalent premium will also become and be immediately due and payable upon the
acceleration of the Exchange Notes.
The Company will be required to furnish to the Trustee annually a
statement as to the performance by the Company of certain of its obligations
under the Indenture and as to any default in such performance. The Company will
be required to deliver to the Trustee, as soon as possible and in any event
within 30 days after the Company becomes aware of the occurrence of an Event of
Default or an event which, with notice or the lapse of time or both, would
constitute an Event of Default, an Officers' Certificate setting forth the
details of such Event of Default or default, and the action which the Company
proposes to take with respect thereto. (Section 1020).
DEFEASANCE
The Indenture will provide that (A) if applicable, the Company will
be discharged from any and all obligations in respect of the Outstanding
Exchange Notes (and the provisions described under "Subordination" will cease to
be effective) or (B) if applicable, the Company may omit to comply with certain
restrictive covenants, and that such omission will not be deemed to be an Event
of Default under the Indenture and the Exchange Notes and the provisions
described under "Subordination" shall cease to apply, in either case (A) or (B)
upon irrevocable deposit with the Trustee, in trust, of money and/or U.S.
Government Obligations that will provide money in an amount sufficient in the
opinion of a nationally recognized firm of independent certified public
accountants to pay the principal of, and premium, if any, and each installment
of interest, if any, on the Outstanding Exchange Notes. With respect to clause
(B), the obligations under the Indenture other than with respect to such
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covenants and the Events of Default other than the Event of Default relating to
such covenants above will remain in full force and effect. Such trust may only
be established if, among other things (i) with respect to clause (A), the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or there has been a change in law, which in the Opinion of
Counsel provides that Holders of the Exchange Notes will not recognize gain or
loss for Federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to Federal income tax on the same amount, in the
same manner and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred; or, with respect to clause (B), the
Company has delivered to the Trustee an Opinion of Counsel to the effect that
the Holders of the Exchange Notes will not recognize gain or loss for Federal
income tax purposes as a result of such deposit and defeasance and will be
subject to Federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit and defeasance had not
occurred; (ii) no Event of Default (or event that with the passing of time or
the giving of notice, or both, will constitute an Event of Default) shall have
occurred or be continuing; (iii) the Company has delivered to the Trustee an
Opinion of Counsel to the effect that such deposit shall not cause the Trustee
or the trust so created to be subject to the Investment Company Act of 1940;
(iv) at the time of such establishment: (A) no default in the payment of all or
a portion of principal of (or premium, if any) or interest on any Senior Debt of
the Company shall have occurred and be continuing, and no event of default with
respect to any Senior Debt shall have occurred and be continuing and shall have
resulted in such Senior Debt becoming or being declared due and payable prior to
the date on which it would otherwise have become due and payable and (B) no
other event of default with respect to any Senior Debt of the Company shall have
occurred and be continuing permitting (after notice or the lapse of time, or
both) the holders of such Senior Debt (or a trustee on behalf of the holders
thereof) to declare such Senior Debt due and payable prior to the date on which
it would otherwise have become due and payable, or, in the case of either Clause
(A) or Clause (B) above, each such default or event of default shall have been
cured or waived or shall have ceased to exist; and (v) certain other customary
conditions precedent are satisfied. (Sections 1201, 1202, 1203 and 1204).
In the event the Company omits to comply with its remaining
obligations under the Indenture and the Exchange Notes after a defeasance of the
Indenture with respect to the Exchange Notes as described under Clause (B) above
and the Exchange Notes are declared due and payable because of the occurrence of
any Event of Default, the amount of money and U.S. Government Obligations on
deposit with the Trustee may be insufficient to pay amounts due on the Exchange
Notes at the time of the acceleration resulting from such Event of Default.
However, the Company will remain liable in respect of such payments.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Outstanding Exchange Notes; provided, however,
that no such modification or amendment may, without the consent of the Holder of
each Outstanding Exchange Note affected thereby, (a) change the Stated Maturity
of the principal of, or any installment of interest on, any Exchange Note, (b)
reduce the principal amount of, (or the premium, if any) or interest on, any
Exchange Note, (c) change the place or currency of payment of principal of, (or
premium, if any) or interest on, any Exchange Note, (d) impair the right to
institute suit for the enforcement of any payment on or with respect to any
Exchange Note, (e) reduce the above-stated percentage of Outstanding Exchange
Notes necessary to modify or amend the Indenture, (f) reduce the percentage of
aggregate principal amount of Outstanding Exchange Notes necessary for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults, (g) modify any provisions of the Indenture relating to the
modification and amendment of the Indenture or the waiver of past defaults or
covenants, except as otherwise specified, (h) modify any of the provisions of
the Indenture relating to the subordination of the Exchange Notes in a manner
adverse to the Holders or (i) modify the provisions described under "Repurchase
at the Option of Holders -- Asset Dispositions" and under "--Change of Control"
in a manner adverse to the Holders thereof in any material respect. (Section
902).
The Holders of a majority in aggregate principal amount of the
Outstanding Exchange Notes may waive compliance by the Company with certain
restrictive provisions of the Indenture. (Section 1021). The Holders of a
majority in aggregate principal amount of the Outstanding Exchange Notes may
waive any past default under the Indenture, except a default in the payment of
principal (or premium, if any) or interest. (Section 513).
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NOTICES
Notices to Holders of Exchange Notes will be given by mail to the
addresses of such Holders as they may appear in the Security Register. (Sections
101 and 106).
TITLE
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name an Exchange Note is registered as the
absolute owner thereof (whether or not such Exchange Note may be overdue) for
the purpose of making payment and for all other purposes. (Section 308).
GOVERNING LAW
The Indenture and the Exchange Notes will be governed by, and
construed in accordance with, the law of the State of New York. (Section 112).
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF
AN INVESTMENT IN THE EXCHANGE NOTES
The following is a summary of certain federal income tax consequences
associated with the acquisition, ownership, and disposition of the Exchange
Notes by holders who acquire the Exchange Notes at original issue for cash. The
following summary does not discuss all of the aspects of federal income taxation
that may be relevant to a prospective holder of the Exchange Notes in light of
his or her particular circumstances, or to certain types of holders (including
dealers in securities, insurance companies, tax-exempt organizations, financial
institutions, broker-dealers, S corporations, and except as discussed below,
foreign corporations and persons who are not citizens or residents of the U.S.
nor does it include persons who hold the Exchange Notes as part of a hedge,
straddle, "synthetic security" or other integrated investment) which are subject
to special treatment under the federal income tax laws. In addition, this
summary does not describe any tax consequences under state, local, or foreign
tax laws.
The discussion is based upon the IRC, Treasury Regulations, Internal
Revenue Service rulings and pronouncements and judicial decisions now in effect,
all of which are subject to change at any time by legislative, judicial or
administrative action. Any such changes may be applied retroactively in a manner
that could adversely affect a holder of the Exchange Notes. Allied has not
sought and will not seek any rulings or opinions from the IRS or counsel with
respect to the matters discussed below. There can be no assurance that the IRS
will not take positions concerning the tax consequences of the purchase,
ownership or disposition of the Exchange Notes which are different from those
discussed herein.
PROSPECTIVE PURCHASERS OF EXCHANGE NOTES SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE U.S. FEDERAL INCOME TAX CONSEQUENCES THAT MAY BE
SPECIFIC TO THEM OF ACQUIRING, OWING AND DISPOSING OF THE EXCHANGE NOTES, AS
WELL AS THE APPLICATION OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES TO U.S. HOLDERS
Taxation of Stated Interest. In general, interest on an Exchange Note
will be taxable to a U.S. holder as ordinary interest income at the time it
accrues or is received, in accordance with the holder's regular method of
accounting for federal income tax purposes. A U.S. holder means any person who
or which is (i) a citizen or resident of the U.S.; (ii) a corporation or
partnership created or organized in the U.S. or under the laws of the U.S. or of
any state; (iii) any estate or trust whose income is included in gross income
for U.S. federal income tax purposes regardless of its source; and (iv) a person
otherwise subject to U.S. federal income taxation on its worldwide income.
Possible Original Issue Discount on the Exchange Note. Depending on
the initial offering price to the public at which a substantial amount of the
Exchange Notes are sold, the Exchange Notes may be issued with original issue
discount for federal
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income tax purposes. The amount of original issue discount with respect to each
Exchange Note will be equal to the excess of the "stated redemption price at
maturity" of such Exchange Note over its "issue price." For these purposes, the
"issue price" of an Exchange Note is the initial offering price to the public at
which a substantial amount of the Notes were sold. The "stated redemption price
at maturity" of each Exchange Note will include all cash payments (other than
stated interest to the extent that it is unconditionally payable at least
annually at a single fixed rate ("qualified stated interest")) required to be
made thereunder until maturity. The amount of original issue discount with
respect to a debt instrument is considered to be zero if such discount is less
than one-fourth of one percent of its stated redemption price at maturity (as
defined above) multiplied by the number of complete years from the issue date to
the maturity date of the debt instrument ("de minimis" original issue discount).
Taxation of Original Issue Discount on the Exchange Notes. If there
is more than de minimis original issue discount, each Holder of an Exchange Note
will be required to include in gross income (as ordinary interest income) an
amount equal to the sum of the "daily portions" of the original issue discount
on the Exchange Notes for each day such Holder holds an Exchange Note. The daily
portions of original issue discount required to be included in a Holder's gross
income will be determined on a constant yield basis by allocating to each day
during the taxable year in which the Holder holds the Exchange Notes a pro rata
portion of the original issue discount thereon which is attributable to the
"accrual period."
The amount of the original issue discount attributable to each
accrual period will be the product of the "adjusted issue price" of the Exchange
Notes at the beginning of such accrual period multiplied by the "yield to
maturity" of the Exchange Notes, less the amount of any qualified stated
interest allocable to the accrual period. Appropriate adjustments will be made
in computing the amount of original issue discount attributable to the initial
accrual period. The adjusted issue price of the Exchange Notes at the beginning
of the first accrual period is the issue price. Thereafter the adjusted issue
price of an Exchange Note is the issue price of the Exchange Note plus the
aggregate amount of original issue discount that accrued in all prior accrual
periods, less payments (other than payments of qualified stated interest) on the
Exchange Note. The yield to maturity of an Exchange Note will be the discount
rate that, when used to compute the present value (on a semi-annual compounded
basis) of all principal and interest payments to be made under an Exchange Note,
produces a present value equal to the issue price of the Exchange Note.
The "accrual periods" of an Exchange Note (other than the initial
accrual period) are each of the six-month periods during the term of the
Exchange Note that end on the biannual payment dates of each year.
Effect of Mandatory Repurchase and Optional Redemption on Original
Issue Discount of the Exchange Notes. In the event the Company is required to
make an Offer to Purchase, each Holder may require the Company to repurchase
such Holder's Exchange Notes in accordance with such offer. In addition, in the
event of certain sales or other dispositions of assets the Company may be
required to make an Offer to Purchase the Exchange Notes. Treasury Regulations
contain special rules for calculating the yield to maturity and maturity on a
note in the event the debt instrument provides for a contingency that could
result in the acceleration or deferral of one or more payments. Further,
Treasury Regulations contain special rules for determining the yield to maturity
or maturity of a debt instrument if either the holder or the issuer has an
option to defer or accelerate payments. Because neither of these rules should
apply to an Offer to Purchase for either of the reasons described above, the
Company has no present intention of treating such repurchase provisions of the
Exchange Notes as affecting the computation of the yield to maturity or maturity
date of any Exchange Notes.
The Company may redeem the Exchange Notes, in whole or in part, at
any time on or after December 1, 2001. The Company may also redeem up to 33 1/3%
of the Exchange Notes prior to December 1, 1999, in connection with a Public
Offering of Capital Stock and, up to $100 million prior to 180 days after the
Acquisition Closing with Net Available Proceeds from Asset Disposition. The
Company may also redeem the Exchange Notes prior to December 1, 2001 at a
redemption price equal to the greater of 100% of their principal amount or the
sum of the present values of the remaining scheduled payments of principal and
interest thereon discounted to maturity on a semi-annual basis of the Treasury
Yield plus 75 basis points. Treasury Regulations set forth special rules
relating to the determination of yield to maturity and maturity for a debt
instrument that may be redeemed prior to its stated maturity date at the option
of the issuer. These rules should not apply to a debt instrument, and, hence,
should not affect the determination of the yield to maturity or the maturity
date of such debt instrument, unless the issuer's exercise of its redemption
rights would reduce the yield to maturity on such instruments. The Company's
exercise of either of these redemption rights would not reduce the yield to
maturity on the Exchange Notes; therefore the special option rules will not
apply to the Exchange Notes.
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Sale or other Taxable Disposition of the Exchange Notes. The sale or
other taxable disposition of an Exchange Note will result in the recognition of
gain or loss to the holder in an amount equal to the difference between (a) the
amount of cash and fair market value of property received in exchange therefor
(except to the extent attributable to the payment of accrued stated interest)
and (b) the holder's adjusted tax basis in such Note.
A holder's initial tax basis in an Exchange Note purchased by such
holder will be equal to the issue price of the Notes. The holder's initial tax
basis in an Exchange Note will be increased by the amount of original issue
discount included in gross income with respect to such Note to the date of
disposition and decreased by the amount of payments (other than payments of
stated interest) with respect to such Note.
Any gain or loss on the sale or other taxable disposition of an
Exchange Note will be capital gain or loss, assuming a purchaser of the Exchange
Note holds such security as a "capital asset" (generally property held for
investment) within the meaning of Section 1221 of the IRC. Any capital gain or
loss will be long-term capital gain or loss if the Exchange Note had been held
for more than one year and otherwise will be short-term capital gain or loss.
Payments on such disposition for accrued qualified stated interest not
previously included in income will be treated as ordinary interest income.
Backup Withholding. The backup withholding rules require a payor to
deduct and withhold a tax if (i) the payee fails to furnish a taxpayer
identification number ("TIN") to the payor, (ii) the IRS notifies the payor that
the TIN furnished by the payee is incorrect, (iii) the payee has failed to
report properly the receipt of "reportable payments" and the IRS has notified
the payor that withholding is required, or (iv) there has been a failure of the
payee to certify under the penalty of perjury that a payee is not subject to
withholding under section 3406 of the IRC. As a result, if any one of the events
discussed above occurs with respect to a holder of Exchange Notes, Allied, its
paying agent or other withholding agent will be required to withhold a tax equal
to 31% of any "reportable payment" made in connection with the Exchange Notes of
such holder. A "reportable payment" includes, among other things, amounts paid
in respect of interest or original issue discount and amounts paid through
brokers in retirement of securities. Any amounts withheld from a payment to a
holder under the backup withholding rules will be allowed as a refund or credit
against such holder's federal income tax, provided that the required information
is furnished to the IRS. Certain holders (including, among others, corporations
and certain tax-exempt organizations) are not subject to backup withholding.
CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS FOR NON-U.S. HOLDERS
The following is a summary of certain U.S. federal income and estate
tax consequences of the ownership and disposition of Exchange Notes by holders
who are Non-U.S. Holders (as defined below). This summary discusses only
Exchange Notes held as "capital assets" (as defined in the IRC) by the holders
thereof. This summary does not discuss all aspects of U.S. federal income and
estate taxation that may be relevant to a particular Non-U.S. Holder (as defined
herein) of the Exchange Notes in light of its particular investment
circumstances. This discussion also does not address the tax consequences to
stockholders, partners or beneficiaries in a Non-U.S. Holder. Further, it does
not consider Non-U.S. Holders subject to special tax treatment under the federal
income tax laws (including dealers in securities, holders of securities held as
part of a "straddle," hedge or "conversion transaction," or situations in which
the "functional currency" of a Holder, within the meaning of Section 985(b) of
the IRC, is not the U.S. dollar).
The following discussion is based upon the IRC, the applicable
Treasury regulations promulgated and proposed thereunder, judicial authority and
current administrative rulings and practices. All of the foregoing are subject
to change (possibly on a retroactive basis) and any such change could affect the
continuing validity of this discussion.
For purposes hereof, a "Non-U.S. Holder" means any person other than
(i) a citizen or resident of the U.S.; (ii) a corporation or partnership created
or organized in the U.S. or under the laws of the U.S. or of any state; or (iii)
any estate or trust whose income is included in gross income for U.S. federal
income tax purposes regardless of its source. For purposes of the withholding
tax on interest discussed below, a non-resident alien or other non-resident
fiduciary of an estate or trust will be considered a Non-U.S. Holder.
For purposes of the following discussion, interest income and gain on
the sale, exchange or retirement of an Exchange Note will be "U.S. trade or
business income" if such income or gain is (i) effectively connected with a
trade or business carried
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on by the Non-U.S. Holder within the U.S. or (ii) if a tax treaty applies,
attributable to a permanent establishment (or in the case of an individual, a
fixed place of business) in the U.S. trade or business income will be taxed at
regular U.S. federal income tax rates. See, generally, "Certain U.S. Federal
Income Tax Considerations for U.S. Holders" above. In the case of a Non-U.S.
Holder that is a corporation, such U.S. trade or business income may also be
subject to the branch profits tax (which is generally imposed on a foreign
corporation on the actual or deemed repatriation from the U.S. of earnings and
profits attributable to U.S. trade or business income) at a 30% rate. The branch
profits tax may not apply (or may apply at a reduced rate) if the recipient is a
qualified resident of certain countries with which the U.S. has an income tax
treaty.
Interest. Payments of interest to a Non-U.S. Holder that do not
qualify for the portfolio interest exception discussed below and which are not
U.S. trade or business income will be subject to withholding of U.S. federal
income tax at a rate of 30% unless a U.S. income tax treaty applies to reduce
the rate of withholding. To claim a treaty reduced rate or an exemption from
withholding because the interest is U.S. trade or business income, the Non-U.S.
Holder must provide a properly executed Form 1001 or Form 4224, respectively.
Interest that is paid to a Non-U.S. Holder on an Exchange Note that
is not U.S. trade or business income will not be subject to U.S. tax if the
interest qualifies as "portfolio interest." Generally, interest on the Exchange
Notes that is paid by the Company will qualify as portfolio interest if (i) the
Non-U.S. Holder does not own, actually or constructively, 10% or more of the
total combined voting power of all classes of stock of the Company entitled to
vote within the meaning of section 871(h)(3) of the IRC and the regulations
thereunder; (ii) the Non-U.S. Holder is not a controlled foreign corporation
that is related to the Company through stock ownership for U.S. federal income
tax purposes; (iii) the Non-U.S. Holder is not a bank whose receipt of interest
on an Exchange Note is described in Section 881(c)(3)(A) of the IRC; and (iv)
the Company, or its paying agent, receives a properly executed certification as
set forth in Section 871(h) and 881(c) of the IRC and the regulations
thereunder, signed under penalties of perjury that the beneficial owner is not a
"U.S. person" for U.S. federal income tax purposes and which provides the
beneficial owner's name and address.
Sale, Exchange or Retirement of Exchange Notes. Any gain realized by
a Non-U.S. Holder on the sale exchange or retirement of Exchange Notes, will
generally not be subject to U.S. federal income tax provided that (i) such gain
is not U.S. trade or business income; (ii) the Non-U.S. Holder is not an
individual who is present in the U.S. for 183 days or more in the taxable year
of the disposition and meets certain other requirements; and (iii) the Non-U.S.
Holder is not subject to tax pursuant to the provisions of U.S. tax law
applicable to certain U.S. expatriates. For the treatment of amounts received in
respect of accrued and unpaid interest, see discussion above under "Interest."
Federal Estate Tax. Exchange Notes held (or treated as held) by an
individual who is a Non-U.S. Holder at the time of his or her death (or
theretofore transferred subject to certain retained rights or powers) will not
be subject to U.S. federal estate tax provided that any interest thereon would
be exempt as portfolio interest if such interest were received by the Non-U.S.
Holder at the time of his or her death.
U.S. Information Reporting and Backup Withholding Tax. The Company
generally must report annually on Form 1042-S to the IRS and to each Non-U.S.
Holder the amount of interest paid to, and the tax withheld, if any, with
respect to each Non-U.S. Holder. These reporting requirements apply whether or
not withholding is reduced or eliminated by an applicable tax treaty. Copies of
these information returns may also be made available under the provisions of a
specific treaty or agreement to the tax authorities of the country in which the
Non-U.S. Holder resides.
The U.S. backup withholding tax (in general, a tax imposed at the
rate of 31% on interest payments to persons that fail to furnish the information
required under the U.S. information reporting requirements) will generally not
apply to payments of interest that qualify as portfolio interest as described
above (provided that the Company has no actual knowledge that the holder is a
U.S. person). Non-U.S. Holders will be required to provide certification to the
Company of qualification for the portfolio interest or treaty exemption to avoid
withholding.
Payments of the proceeds of the sale of Exchange Notes to or through
a foreign office of a "broker" (as defined in the pertinent regulations) will
not be subject to backup withholding (absent actual knowledge that the payee is
a U.S. person) but will be subject to information reporting if the broker is a
U.S. person, a controlled foreign corporation for U.S. federal income tax
purposes, or a foreign person 50% or more of whose gross income is from a U.S.
trade or business for a specified three-year
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period, unless the broker has in its records documentary evidence that the
holder is not a U.S. person and certain conditions are met (including that the
broker has no actual knowledge that the holder is a U.S. person) or the holder
otherwise establishes an exemption. Payment of the proceeds of a sale to or
through the U.S. office of a broker is subject to backup withholding and
information reporting, unless the holder certifies that it is a Non-U.S. Holder
under penalties of perjury or otherwise establishes an exemption.
Any amount withheld under the backup withholding rules from a payment
to a Non-U.S. Holder will be allowed as a credit against, or refund of, such
holder's regular federal income tax liability, provided that certain information
is provided by the holder to the IRS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
Prospectus in connection with any resale of such Exchange Notes. The Prospectus,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Notes received in exchange
for Notes where such Notes were acquired as a result of market-making activities
or other trading activities. The Company has agreed that, for a period of 90
days after the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale. In addition, until , 1997 (90 days after commencement of the
Exchange Offer), all dealers effecting transactions in the Exchange Notes may be
required to deliver a Prospectus.
The Company will not receive any proceeds from any sales of the
Exchange Notes by broker-dealers. Exchange Notes received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to the purchaser or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
Exchange Notes. Any broker-dealer that resells the Exchange Notes that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Notes may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Notes and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letters of Transmittal state that, by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
For a period of 90 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay certain expenses
incident to the Exchange Offer, other than commission or concessions of any
brokers or dealers, and will indemnify the holders of the Exchange Notes
(including any broker-dealers) against certain liabilities, including
liabilities under the Securities Act.
By acceptance of this Exchange Offer, each broker-dealer that
receives Exchange Notes for its own account pursuant to the Exchange Offer
agrees that, upon receipt of notice from the Company of the happening of any
event which makes any statement in the Prospectus untrue in any material respect
or which requires the making of any changes in the Prospectus in order to make
the statements therein not misleading (which notice the Company agrees to
deliver promptly to such broker-dealer), such broker-dealer will suspend use of
the Prospectus until the Company has amended or supplemented the Prospectus to
correct such misstatement or omission and has furnished copies of the amended or
supplemental Prospectus to such broker-dealer.
LEGAL MATTERS
Certain legal matters in connection with the Exchange Notes offered
hereby will be passed on for the Company by Porter & Hedges, L.L.P., Houston,
Texas. Robert G. Reedy, a partner of the firm of Porter & Hedges, L.L.P., is a
director of Allied.
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Porter & Hedges, L.L.P. is the Company's principal outside legal counsel. As of
January 1, 1997, Mr. Reedy owns 26,407 shares of Allied common stock and holds
options to purchase an additional 45,000 shares.
EXPERTS
The audited consolidated financial statements incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference in reliance upon the authority of said firm as experts in giving said
reports.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
TABLE OF CONTENTS
Page
Available Information.............................................2
Prospectus Summary................................................3
Risk Factors......................................................9
Disclosure Regarding Forward
Looking Statements..........................................16
The Company......................................................17
The Exchange Offer...............................................22
Certain Federal Income Tax Consequences
of the Exchange Offer.......................................29
Description of the Senior Credit Facility........................30
Description of the Exchange Notes................................31
Certain Federal Income Tax Consequences
of an Investment in the Exchange Notes......................57
Plan of Distribution.............................................61
Legal Matters....................................................61
Experts..........................................................62
ALLIED WASTE NORTH
AMERICA, INC.
$525,000,000 OFFER TO EXCHANGE
ITS 10 1/4% SENIOR SUBORDINATED NOTES
DUE 2006 FOR 10 1/4% SENIOR
SUBORDINATED NOTES DUE 2006 THAT
HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
April ____, 1997
<PAGE> 66
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits a
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action. In an action brought to obtain a judgment in the corporation's favor,
whether by the corporation itself or derivatively by a stockholder, the
corporation may only indemnify for expenses, including attorney's fees, actually
and reasonably incurred in connection with the defense or settlement of such
action, and the corporation may not indemnify for amounts paid in satisfaction
of a judgment or in settlement of the claim. In any such action, no
indemnification may be paid in respect of any claim, issue or matter as to which
such person shall have been adjudged liable to the corporation except as
otherwise approved by the Delaware Court of Chancery or the court in which the
claim was brought. In any other type of proceeding, the indemnification may
extend to judgments, fines and amounts paid in settlement, actually and
reasonably incurred in connection with such other proceeding, as well as to
expenses.
The statute does permit indemnification unless the person seeking
indemnification has acted in good faith and in a manner be reasonably believed
to be in, or not opposed to, the best interests of the corporation and, in the
case of criminal actions or proceedings, the person had no reasonable cause to
believe his conduct was unlawful. The statute contains additional limitations
applicable to criminal actions and to actions brought by or in the name of the
corporation. The determination as to whether a person seeking indemnification
has met the required standard of conduct is to be made (1) by a majority vote of
a quorum of disinterested members of the board of directors, (2) by independent
legal counsel in a written opinion, if such a quorum does not exist or if the
disinterested directors so direct, or (3) by the stockholders.
The Company's Certificate of Incorporation and Bylaws require the
Company to indemnify its directors to the fullest extent permitted under
Delaware law. Pursuant to employment agreements entered into by the Company with
its executive officers and certain other key employees, the Company must
indemnify such officers and employees in the same manner and to the same extent
that the Company is required to indemnify its directors under the Company's
Bylaws. The Company's Certificate limits the personal liability of a director to
the corporation or its stockholders to damages for breach of the director's
fiduciary duty.
The Company has not purchased insurance on behalf of its directors
and officers against certain liabilities that may be asserted against, or
incurred by, such persons in their capacities as directors or officers of the
registrant, or that may arise out of their status as directors or officers of
the registrant, including liabilities under the federal and state securities
laws. The Company has entered into indemnification agreements to indemnify its
directors to the extent permitted under Delaware law.
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<PAGE> 67
ITEM 21. EXHIBITS AND FINANCIAL DATA SCHEDULES.
(a) EXHIBITS
The following is a list of all the exhibits filed as part of the
Registration Statement.
<TABLE>
<CAPTION>
Number
------
<S> <C> <C>
3.1 - Certificate of Incorporation of the Company.
3.2 - Amendment to Certificate of Incorporation of the Company.
3.3 - Bylaws of the Company.
4.1 - Indenture, dated as of December 1, 1996, by and among the Company, the Guarantors and
First Trust National Association with respect to the Notes and Exchange Notes.
4.2 - Form of Exchange Note.*
5.1 - Opinion of Porter & Hedges, L.L.P., as to the legality of the Exchange Notes.*
10.1 - Registration Rights Agreement, dated as of December 5, 1996, by and among the Company,
Allied, Goldman, Sachs & Co., Citicorp
Securities Inc., and CS First Boston Corporation.
23.1 - Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1).*
23.2 - Consent of Arthur Andersen LLP.*
24.1 - Power of Attorney (included as part of the signature page of this Registration Statement).
25.1 - Statement of Eligibility and Qualification of Trustee on Form T-1 of First Trust National
Association under the Trust Indenture Act of 1934.*
99.1 - Letter of Transmittal for the Notes.*
</TABLE>
* to be filed by amendment.
(b) FINANCIAL STATEMENT SCHEDULES
Schedules are omitted since the information required to be submitted
has been included in the Consolidated Financial Statements of Allied Waste
Industries, Inc. or the notes thereto, or the required information is not
applicable.
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
II - 2
<PAGE> 68
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Scottsdale, State of Arizona on February 27, 1997.
ALLIED WASTE INDUSTRIES, INC.
By: /s/ Roger A. Ramsey
-------------------------------------------------
Roger A. Ramsey
Chairman of the Board and Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Roger A. Ramsey, Henry L.
Hirvela, Peter S. Hathaway and each of them (with full power to act alone), as
attorney and agents for the undersigned, with full power of substitution, for
and in the name, place and stead of the undersigned, to sign and file with the
Commission under the Securities Act any and all amendments and exhibits to this
Registration Statement and any and all applications, instruments and other
documents to be filed with the Commission pertaining to the registration of the
securities covered hereby, with full power and authority to do and perform any
and all acts and things whatsoever requisite or desirable.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on February 27, 1997.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Roger A. Ramsey Chairman of the Board of Directors and Chief
- ------------------------------------------- Executive Officer (Principal Executive Officer)
Roger A. Ramsey
/s/ Thomas H. Van Weelden Director, President and Chief Operating Officer
- -------------------------------------------
Thomas H. Van Weelden
/s/ Henry L. Hirvela Vice President - Chief Financial Officer
- ------------------------------------------- (Principal Financial Officer)
Henry L. Hirvela
/s/ Pete Hathaway Vice President - Chief Accounting Officer
- ------------------------------------------- (Principal Accounting Officer)
Peter S. Hathaway
/s/ Daniel J. Ivans Director, Vice President
- -------------------------------------------
Daniel J. Ivan
</TABLE>
II - 4
<PAGE> 70
/s/ Nolan Lehmann Director
- -------------------------------------------
Nolan Lehmann
Director
- -------------------------------------------
Alan B. Shepard
/s/ Robert G. Reedy Director
- -------------------------------------------
Robert G. Reedy
Director
- -------------------------------------------
James G. Coulter
/s/ John M. Lewis Director
- -------------------------------------------
John M. Lewis
Director
- -------------------------------------------
William K. Reilly
/s/ Jeffrey A. Shaw Director
- -------------------------------------------
Jeffrey A. Shaw
/s/ Brian A. O'Leary Director
- -------------------------------------------
Brian A. O'Leary
/s/ James R. Bullock Director
- -------------------------------------------
James R. Bullock
/s/ Ivan Cairns Director
- -------------------------------------------
Ivan Cairns
II - 5
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
ALLIED HOLDINGS (UNITED STATES), INC.
ARTICLE I
NAME
The name of the corporation is Allied Holdings (United States), Inc.
ARTICLE II
REGISTERED OFFICE AND REGISTERED AGENT
The registered office of the Corporation in the State of Delaware is
located at Corporation Trust Center, 1209 Orange Street, City of Wilmington,
County of New Castle. The name of the Corporation's registered agent at such
address is The Corporation Trust Company.
ARTICLE III
CORPORATE PURPOSES
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporate Law of the
State of Delaware ("DGCL").
ARTICLE IV
CAPITAL STOCK
The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is 1,000 shares, all of which shall be
Common Stock of the par value of $0.01 per share.
ARTICLE V
CORPORATE EXISTENCE
The Corporation is to have perpetual existence.
<PAGE> 2
ARTICLE VI
BYLAWS AMENDMENTS
The Board of Directors is expressly authorized to adopt, alter, amend or
repeal the bylaws of the Corporation or to adopt new bylaws.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
Section 1. Indemnification by Corporation. (a) Any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent (including trustee) of another corporation,
partnership, joint venture, trust or other enterprise, expressly including
service as a director, officer or in a similar position with any exchange, board
of trade, clearing corporation or similar institution on which the Corporation
or any other corporation a majority of the stock of which is owned directly or
indirectly by the Corporation had membership privileges at the relevant time
during which any such position was held, shall be indemnified by the Corporation
(funds paid or required to be paid to any person as a result of the provisions
of this Article shall be returned to the Corporation or reduced, as the case may
be, to the extent that such person receives funds pursuant to an indemnification
from any such other corporation or organization) against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. Any such person who could be indemnified pursuant to the
preceding sentence except for the fact that the subject action or suit is or was
by or in the right of the Corporation shall be indemnified by the Corporation
against expenses (including attorneys' fees) actually or reasonably incurred by
him in connection with the defense or settlement of such action or suit, except
that no indemnification shall be made in respect of any claim, issue or matter
as which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation unless and only to
the extent that the Court of Chancery of the State of Delaware or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which the court of Chancery or such other court shall deem proper.
(b) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in paragraph (a) of this Section 1, or in
defense of any claim, issue or matter therein, he shall be
2
<PAGE> 3
indemnified by the Corporation against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith without the
necessity of any action being taken by the Corporation other than the
determination, in good faith, that such defense has been successful. In all
other cases wherein such indemnification is provided by this Article, unless
ordered by a court, indemnification shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct specified in this Article. Such
determination shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or (3) by the holders of a majority of the shares of capital
stock of the Corporation is entitled to vote thereon.
(c) The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person seeking
indemnification did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful. Entry of a judgment by consent as part of
a settlement shall not be deemed a final adjudication of liability for
negligence or misconduct in the performance of duty, nor of any other issue or
matter.
(d) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final disposition of
such action, suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by the director, officer, employee
or agent involved to repay such amount unless it shall ultimately by determined
that he is entitled to be indemnified by the Corporation.
(e) The indemnification hereby provided shall not be deemed exclusive of
any other rights to which those seeking indemnification may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in an official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such person.
Section 2. Insurance. By action of the Board of Directors, notwithstanding
any interest of the directors in the action, the Corporation may purchase and
maintain insurance, in such amounts as the Board of Directors deems appropriate,
on behalf of any Person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent (including trustee) of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation shall have the power to
indemnify him against such liability under the provisions of this Article.
3
<PAGE> 4
ARTICLE VIII
LIMITED DIRECTOR LIABILITY
No director of the Corporation shall be personally liable to the
Corporation or to its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that this Article VIII shall not eliminate or limit
the liability of a director:
(1) for any breach of the director's duty of loyalty to the
Corporation or its stockholders,
(2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law,
(3) under Section 174 of the DGCL, as it may hereafter be amended
from time to time, for any unlawful payment of a dividend or unlawful
stock purchase or redemption, or
(4) for any transaction from which the director derived an improper
personal benefit.
If the DGCL is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a director
of the Corporation shall be eliminated or limited to the fullest extent
permitted by the DGCL, as so amended. No amendment to or repeal of this Article
VIII will apply to, or have any effect on, the liability or alleged liability of
any director of the Corporation for or with respect to any acts or omissions of
the director occurring prior to such amendment or repeal.
ARTICLE IX
INITIAL DIRECTORS
The powers of the incorporator will terminate upon the filing of this
Certificate. The names and mailing addresses of the initial directors is:
Name Mailing Address
---- ---------------
Roger A. Ramsey 7201 East Camelback Road, Suite 375
Scottsdale, Arizona 85251
4
<PAGE> 5
ARTICLE X
INCORPORATOR
The name and address of the incorporator is as follows:
Name Mailing Address
---- ---------------
Fred S. Stovall 700 Louisiana, 35th Floor
Houston, Texas 77002-2764
The undersigned, being the incorporator, executes this Certificate as of
September 11, 1996.
/s/ Fred S. Stovall
--------------------------------------
Fred S. Stovall
5
<PAGE> 1
EXHIBIT 3.2
CERTIFICATE OF AMENDMENT
OF
ALLIED HOLDINGS (UNITED STATES), INC.
Pursuant to Section 241 of the General Corporation Law of the State of
Delaware (the "DGCL"), Allied Holdings (United States), Inc. (the
"Corporation"), a corporation organized and existing under the DGCL, does hereby
certify that:
1. The Corporation has not received payment for any of its stock; and
2. The amendment to the Certificate of Incorporation of the Corporation
(the "Certificate of Incorporation") set forth below has been duly
adopted in accordance with the provisions of Section 241 of the
DGCL.
The Certificate of Incorporation is hereby amended such that Article I
reads as follows in its entirety:
The name of the corporation is Allied Waste North America, Inc.
The undersigned, sole Director of the Corporation, executes this
Certificate of Amendment as of November 1, 1996.
/s/ Roger A. Ramsey
--------------------------------------------
Roger A. Ramsey
<PAGE> 1
EXHIBIT 3.3
BYLAWS
OF
ALLIED WASTE NORTH AMERICA, INC.
(a Delaware Corporation)
as of
November 1, 1996
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office of Allied Waste North
America, Inc. (the "Corporation") will be at 7201 East Camelback Road, Suite
375, Scottsdale, Arizona 85251.
SECTION 2. OTHER OFFICES. The Corporation may also have offices at such
other places within or without the State of Delaware as the board of directors
may from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. PLACE OF MEETINGS. All meetings of the stockholders will be
held at the principal office of the Corporation, or at such other place within
or without the State of Delaware as may be determined by the board of directors
and stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
SECTION 2. ANNUAL MEETINGS. An annual meeting of Stockholders shall be
held for the election of directors at such date, time and place, either within
or without the State of Delaware, as may be designated by resolution of the
Board of Directors from time to time; provided that each successive annual
meeting shall be held on a date within 13 months after the date of the preceding
annual meeting. Any other proper business may be transacted at the annual
meeting.
SECTION 3. NOTICE OF ANNUAL MEETING. Written or printed notice of the
annual meeting, stating the place, day and hour thereof, will be served upon or
mailed to each stockholder entitled to vote thereat at such address as appears
on the books of the Corporation, not less than ten days nor more than sixty days
before the date of the meeting.
SECTION 4. SPECIAL MEETING. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or the Certificate
of Incorporation, may be called by the president, the chairman of the board of
directors or by not less than a quorum of the board of directors, and shall be
called by the president or secretary at the request in writing of stockholders
owning not less than one-half of the shares of capital stock of the Corporation
issued and outstanding and entitled to vote at such meeting. Such request will
state the purpose or purposes of the proposed meeting.
<PAGE> 2
SECTION 5. NOTICE OF SPECIAL MEETING. Written notice of a special meeting
of stockholders, stating the place, day and hour and purpose or purposes
thereof, will be served upon or mailed to each stockholder entitled to vote
thereat at such address as appears on the books of the Corporation, not less
than ten days nor more than sixty days before the date of the meeting.
SECTION 6. BUSINESS AT SPECIAL MEETING. Business transacted at all special
meetings will be confined to the purpose or purposes stated in the notice.
SECTION 7. STOCKHOLDER LIST. At least ten days before each meeting of
stockholders, a complete list of the stockholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each, will be prepared by the
secretary. Such list, for a period of ten days prior to such meeting, will be
kept on file at the registered office of the Corporation and will be subject to
inspection by any stockholder at any time during usual business hours. Such list
will also be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any stockholder during the whole time of
the meeting.
SECTION 8. QUORUM. The holders of at least one-half of the shares of
capital stock issued and outstanding and entitled to vote thereat, represented
in person or by proxy, will constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute, the Certificate of Incorporation or these Bylaws. If, however, such
quorum is not present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, represented in person or by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
any such adjourned meeting at which a quorum is later represented any business
may be transacted which might have been transacted at the meeting as originally
notified.
SECTION 9. MAJORITY VOTE. When a quorum is present at any meeting, the
vote of the holders of a majority of the shares having voting power represented
in person or by proxy will decide any question brought before such meeting,
unless the question is one upon which, by express provision of statute, the
Certificate of Incorporation or these Bylaws, a different vote is required, in
which case such express provision will govern and control the decision of such
question.
SECTION 10. PROXIES. At any meeting of the stockholders every stockholder
having the right to vote will be entitled to vote in person, or by proxy
appointed by an instrument in writing subscribed by such stockholder or his duly
authorized attorney in fact and bearing a date not more than eleven months prior
to said meeting.
SECTION 11. VOTING. Unless otherwise provided by statute, the Certificate
of Incorporation or these Bylaws, each stockholder will have one vote for each
share of stock having voting power, registered in his name on the books of the
Corporation.
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<PAGE> 3
SECTION 12. ACTION BY WRITTEN CONSENT. Any action which the Certificate of
Incorporation or these Bylaws requires or permits to be taken at a meeting of
stockholders may be taken without a meeting if a consent in writing, setting
forth the action so taken, is signed by the number of stockholders whose votes
would be sufficient to authorize or take such action and who are entitled to
vote with respect to the subject matter thereof.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. POWERS. The business and affairs of the Corporation will be
managed by a board of directors. The board may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute, by the
Certificate of Incorporation or these Bylaws directed or required to be
exercised or done by the stockholders.
SECTION 2. NUMBER OF DIRECTORS. The number of directors which constitute
the whole board will be no less than one and no more than five, as such number
shall be determined by resolution of the board of directors from time to time;
provided that no decrease in the number of directors shall have the effect of
shortening the term of any incumbent director. As of the date of the initial
adoption of these Bylaws, the number of directors constituting the board of
directors shall be three.
SECTION 3. ELECTION AND TERM. Directors, other than the first board of
directors, will be elected at the annual meeting of the stockholders, and each
director will be elected to serve until the next annual meeting and until his
successor is elected and qualified. Directors need not be stockholders.
SECTION 4. VACANCIES. Any vacancy occurring in the board of directors may
be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the board of directors. A director elected to fill
a vacancy will be elected for the unexpired term of his predecessor in office.
Any directorship to be filled by reason of an increase in the number of
directors may be filled by majority vote of the board of directors or by
election at an annual meeting or at a special meeting of stockholders called for
that purpose. Provided, however, if such vacancy resulting from an increase in
the number of directors is filled by the directors, then such board position
must stand for reelection at the next annual meeting of stockholders and,
provided further, that no more than two such newly-created vacancies may be
filled by the directors in any interim period between meeting of stockholders.
SECTION 5. RESIGNATION; REMOVAL. Any director may resign at any time. The
board of directors may, by majority vote of the directors then in office, remove
a director for cause. The stockholders entitled to vote in the election of
directors may remove a director with or without cause.
3
<PAGE> 4
ARTICLE IV
MEETINGS OF THE BOARD
SECTION 1. FIRST MEETING. Each newly elected board of directors may hold
its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as the
annual meeting of the stockholders, and no notice of such meeting shall be
necessary; or the board may meet at such place and time as is fixed by the
consent in writing of all the directors.
SECTION 2. REGULAR MEETINGS. Regular meetings of the board may be held at
such time and place either within or without the State of Delaware and with such
notice or without notice as is determined from time to time by the board.
SECTION 3. SPECIAL MEETINGS. Special meetings of the board may be called
by the president or the chairman of the board of directors on one day's notice
to each director, either personally or by mail or telegram. Special meetings
will be called by the president or the secretary in like manner and on like
notice upon the written request of any director.
SECTION 4. QUORUM AND VOTING. At all meetings of the board, a majority of
the directors will be necessary and sufficient to constitute a quorum for the
transaction of business; and the act of a majority of the directors present at
any meeting at which there is a quorum will be the act of the board of
directors, except as may be otherwise specifically provided by statute, the
Certificate of Incorporation or these Bylaws. If a quorum is not present at any
meeting of directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum is present.
SECTION 5. TELEPHONE MEETINGS. The directors may hold their meetings in
any manner permitted by law. Without limitation, at any meeting of the board, a
member may attend by telephone, radio, television, interactive media or similar
means of communication by means of which all participants can hear each other
which permits him to participate in the meeting, and a director so attending
will be deemed present at the meeting for all purposes including the
determination of whether a quorum is present.
SECTION 6. ACTION BY WRITTEN CONSENT. Any action required or permitted to
be taken by the board of directors or executive committee under applicable
statutory provisions, the Certificate of Incorporation, or these Bylaws, may be
taken without a meeting if a consent in writing, setting forth the action so
taken, is signed by all the members of the board of directors or executive
committee, as the case may be, and filed with the minutes of the proceedings of
the directors or executive committee, as the case may be.
4
<PAGE> 5
ARTICLE V
COMMITTEES
SECTION 1. EXECUTIVE COMMITTEE. The board of directors, by resolution
adopted by a majority of the whole board, may designate two or more directors to
constitute an executive committee, which committee, to the extent provided in
such resolution, will have and may exercise all of the authority of the board of
directors in the business and affairs of the Corporation, and may have power to
authorize the seal of the Corporation to be affixed to all papers which may
require it, except where action by the board of directors is specified by
statute. The executive committee will keep regular minutes of its proceedings
and report the same to the board when required.
SECTION 2. OTHER COMMITTEES. The board of directors may similarly create
other committees for such terms and with such powers and duties as the board
deems appropriate.
SECTION 3. ADVISORY DIRECTORS. The board of directors may, by majority
vote, appoint one or more advisory directors. Advisory directors shall serve at
the board's convenience solely to advise the board of directors, and shall have
no formal responsibilities. No advisory director shall be entitled to vote at
meetings of the board, nor shall any advisory director be counted when
determining whether there is a quorum at directors' meetings. Advisory directors
shall not be, by virtue of their position as advisory directors, agents of the
Corporation, and they shall not have the power to bind the Corporation.
ARTICLE VI
COMPENSATION OF DIRECTORS
SECTION 1. ATTENDANCE FEES. Directors, as such, will not receive any
stated salary for their services, but by resolution of the board a fixed sum and
expenses of attendance may be allowed for attendance at each regular or special
meeting of the board; however, this provision will not preclude any director
from serving the Corporation in any other capacity and receiving compensation
therefor. Members of committees may be allowed like compensation for attending
committee meetings.
ARTICLE VII
NOTICES
SECTION 1. METHODS OF NOTICE. Whenever any notice is required to be given
to any stockholder or director under the provisions of any statute, the
Certificate of Incorporation or these Bylaws, it will not be construed to
require personal notice, but such notice may be given in writing by mail
addressed to such stockholder or director at such address as appears on the
books of the Corporation, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail with postage
thereon prepaid. Notice to directors may also be given by facsimile, and notice
given by such means shall be deemed given at the time it is actually received.
5
<PAGE> 6
SECTION 2. WAIVER OF NOTICE. Whenever any notice is required to be given
to any stockholder or director under the provisions of any statute, the
Certificate of Incorporation or these Bylaws, a waiver thereof in writing signed
by the person or persons entitled to said notice, whether before or after the
time stated therein, will be deemed equivalent to the giving of such notice.
Attendance at any meeting will constitute a waiver of notice thereof except as
otherwise provided by statute.
ARTICLE VIII
OFFICERS
SECTION 1. EXECUTIVE OFFICERS. The officers of the Corporation will
consist of chief executive officer, president/chief operations officer,
treasurer, and secretary, each of whom shall be elected by the board of
directors. The board of directors may also elect a chairman of the board,
additional vice presidents, and one or more assistant secretaries and assistant
treasurers. Any two or more offices may be held by the same person.
SECTION 2. ELECTION AND QUALIFICATION. The board of directors at its first
meeting after each annual meeting of stockholders will elect the president, one
or more vice presidents, a secretary and a treasurer, none of whom need be a
member of the board.
SECTION 3. OTHER OFFICERS AND AGENTS. The board may elect or appoint such
other officers, assistant officers and agents as it deems necessary, who will
hold their offices for such terms and shall exercise such powers and perform
such duties as determined from time to time by the board.
SECTION 4. SALARIES. The salaries of all officers of the Corporation will
be fixed by the board of directors except as otherwise directed by the board.
SECTION 5. TERM, REMOVAL AND VACANCIES. The officers of the Corporation
will hold office until their resignation or their successors are chosen and
qualify. Any officer, agent or member of the executive committee elected or
appointed by the board of directors may be removed at any time by the board of
directors; provided, that such removal shall be without prejudice to the
contract rights, if any, of such removed party. If any such office becomes
vacant for any reason, the vacancy will be filled by the board of directors.
SECTION 6. CHIEF EXECUTIVE OFFICER. The chief executive officer will be
the chief executive officer of the Corporation. He will preside at all meetings
of the stockholders and the board of directors unless such duties have been
assigned to a chairman of the board by the board of directors. He will be
ex-officio a member of all standing committees, will have general powers of
oversight, supervision and management of the business and affairs of the
Corporation, and will see that all orders and resolutions of the board of
directors are carried into effect.
SECTION 7. PRESIDENT/CHIEF OPERATIONS OFFICER. The president/chief
operations officer will, in the absence or disability of the chief executive
officer perform the duties and exercise the powers of the chief executive
officer, and will perform such other duties as the board of directors and chief
executive officer may prescribe.
6
<PAGE> 7
SECTION 8. SECRETARY. The secretary will attend all meetings of the board
of directors and all meetings of the stockholders and record all votes and the
minutes of all proceedings in a book to be kept for that purpose and will
perform like duties for the standing committees when required. He will give, or
cause to be given, notice of all meetings of the stockholders and special
meetings of the board of directors, and will perform such other duties as may be
prescribed by the board of directors and president. He will keep in safe custody
the seal of the Corporation and, when authorized by the board, affix the same to
any instrument requiring it, and when so affixed it shall be attested by his
signature or by the signature of an assistant secretary.
SECTION 9. ASSISTANT SECRETARIES. The assistant secretaries in the order
determined by the board of directors will perform, in the absence or disability
of the secretary, the duties and exercise the powers of the secretary and will
perform such other duties as the board of directors and president may prescribe.
SECTION 10. TREASURER. The treasurer will have the custody of the
corporate funds and securities and will keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and will
deposit all monies and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the board of
directors. He will disburse the funds of the Corporation as may be ordered by
the board, taking proper vouchers for such disbursements, and will render to the
board of directors and president, whenever they may require it, an account of
all of his transactions as treasurer and of the financial condition of the
Corporation.
SECTION 11. ASSISTANT TREASURERS. The assistant treasurers in the order
determined by the board of directors, in the absence or disability of the
treasurer, perform the duties and exercise the powers of the treasurer and will
perform such other duties as the board of directors and president may prescribe.
SECTION 12. OFFICER'S BOND. If required by the board of directors, any
officer will give the Corporation a bond (to be renewed as the board may
require) in such sum and with such surety or sureties as is satisfactory to the
board for the faithful performance of the duties of his office and for the
restoration to the Corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.
ARTICLE IX
SHARES AND STOCKHOLDERS
SECTION 1. CERTIFICATES REPRESENTING SHARES. The certificates representing
shares of the Corporation will be numbered and entered in the books of the
Corporation as they are issued. They will exhibit the holder's name and number
of shares and will be signed by the president or vice-president and the
secretary or an assistant secretary, and will be sealed with the seal of the
Corporation or a facsimile thereof. The signature of any such officer may be
facsimile if the certificate is countersigned by a transfer agent or registered
by a registrar, other than the Corporation itself or an employee of the
Corporation. In case any officer who has signed or whose facsimile signature
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<PAGE> 8
has been placed upon such certificate has ceased to be such officer before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer at the date of its issuance.
SECTION 2. TRANSFER OF SHARES. Upon surrender to the Corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it will be the duty of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books. Notwithstanding
the foregoing, no transfer will be recognized by the Corporation if such
transfer would violate federal or state securities laws, the Certificate of
Incorporation, or any stockholders agreements which may be in effect at the time
of the purported transfer. The Corporation may, prior to any such transfer,
require an opinion of counsel to the effect that any such transfer does not
violate applicable securities laws requiring registration or an exemption from
registration prior to any such transfer.
SECTION 3. FIXING RECORD DATE. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or entitled to receive payment of any dividend, or in order
to make a determination of stockholders for any other proper purpose, the board
of directors may provide that the stock transfer books be closed for a stated
period but not to exceed, in any case, sixty days. If the stock transfer books
are closed for the purpose of determining stockholders entitled to notice of or
to vote at a meeting of stockholders, such books must be closed for at least ten
days immediately preceding such meeting. In lieu of closing the stock transfer
books, the board of directors may fix in advance a date as the record date for
any such determination of stockholders, such date, in any case, to be not more
than sixty days and, in case of a meeting of stockholders, not less than ten
days prior to the date on which the particular action requiring such
determination of stockholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of stockholders
entitled to notice of or to vote at a meeting of stockholders, or stockholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the board of directors
declaring such dividend is adopted, as the case may be, will be the record date
for such determination of stockholders. When a determination of stockholders
entitled to vote at any meeting of stockholders has been made as herein
provided, such determination will apply to any adjournment thereof except where
the determination has been made through the closing of stock transfer books and
the stated period of closing has expired.
SECTION 4. REGISTERED STOCKHOLDERS. The Corporation is entitled to
recognize the exclusive right of a person registered on its books as the owner
of the share to receive dividends, and to vote as such owner, and for all other
purposes as such owner; and the Corporation is not bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it has express or other notice thereof, except
as otherwise provided by the laws of Delaware.
SECTION 5. LOST CERTIFICATE. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the board of directors may, in its discretion
and as a condition precedent
8
<PAGE> 9
to the issuance thereof, require the owner of such lost or destroyed certificate
or certificates, or his legal representatives, to advertise the same in such
manner as it shall require and/or give the Corporation a bond in such sum as it
may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost or
destroyed.
ARTICLE X
GENERAL
SECTION 1. DIVIDENDS. The board of directors may from time to time
declare, and the Corporation pay, dividends on its outstanding shares of capital
stock in cash, in property, or in its own shares, except when the declaration or
payment thereof would be contrary to statute or the Certificate of
Incorporation. Such dividends may be declared at any regular or special meeting
of the board, and the declaration and payment will be subject to all applicable
provisions of laws, the Certificate of Incorporation and these Bylaws.
SECTION 2. RESERVES. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, deem
proper as a reserve fund to meet contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the Corporation, or for such other
purpose as the directors may think conducive to the interest of the Corporation,
and the directors may modify or abolish any such reserve in the manner in which
it was created.
SECTION 3. DIRECTORS' ANNUAL STATEMENT. The board of directors will
present at each annual meeting and when called for by vote of the stockholders
at any special meeting of the stockholders, a full and clear statement of the
business and condition of the Corporation.
SECTION 4. CHECKS. All checks or demands for money and notes of the
Corporation will be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
SECTION 5. CORPORATE RECORDS. The Corporation will keep at its registered
office or principal place of business, or at the office of its transfer agent or
registrar, a record of its stockholders giving the names and addresses of all
stockholders and the number and class of shares held by each. All other books
and records of the Corporation may be kept at such place or places within or
without the State of Delaware as the board of directors may from time to time
determine.
SECTION 6. SEAL. The corporate seal will have inscribed thereon the name
of the Corporation. The seal may be used by causing it or a facsimile thereof to
be impressed, affixed or reproduced.
SECTION 7. AMENDMENT. These Bylaws may be altered, amended or repealed
or new bylaws may be adopted at any annual meeting of the stockholders or at
any special meeting of the stockholders at which a quorum is present or
represented, provided notice of the proposed alteration, amendment, repeal or
adoption be contained in the notice of such meeting, by the affirmative vote of
the holders of a majority of the shares entitled to vote at such meeting and
present of represented
9
<PAGE> 10
thereat, or by the affirmative vote of a majority of the board of directors at
any regular meeting of the board or at any special meeting of the board;
provided however, that no change of the time or place of the annual meeting of
stockholders may be made after the issuance of notice thereof.
SECTION 8. INDEMNIFICATION. Each director, officer and former director or
officer of the Corporation, and any person who may have served or who may
hereafter serve at the request of the Corporation as a director or officer of
another corporation in which it owns shares of capital stock or of which it is a
creditor, is hereby indemnified by the Corporation against expenses actually and
necessarily incurred by him in connection with the defense of any action, suit
or proceeding in which he is made a party by reason of being or having been such
director or officer, except in relation to matters as to which he shall be
adjudged in such action, suit or proceeding to be liable for negligence or
misconduct in the performance of duty. Such indemnification will not be deemed
exclusive of any other rights to which such director, officer or other person
may be entitled under any agreement, vote of stockholders, or otherwise. Without
limitation, nothing in this section shall limit any indemnification provisions
in the Certificate of Incorporation.
Adopted as of November 1, 1996.
/s/ Steven M. Helm
--------------------------------------------
Steven M. Helm, Secretary
10
<PAGE> 1
EXHIBIT 4.1
Conformed Copy
ALLIED WASTE NORTH AMERICA, INC.
As Issuer
and
THE GUARANTORS NAMED HEREIN,
As Guarantors
and
ALLIED WASTE FINANCE (CANADA), LTD.
As Future Guarantor
to
FIRST BANK NATIONAL ASSOCIATION
As Trustee
----------------
Indenture
Dated as of December 1, 1996
----------------
$525,000,000
10 1/4% SENIOR SUBORDINATED NOTES DUE 2006
<PAGE> 2
ALLIED WASTE NORTH AMERICA, INC.
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
- --------------- ---------
Section 310(a)(1) .................................... 609
(a)(2) .................................... 609
(a)(3) .................................... Not Applicable
(a)(4) .................................... Not Applicable
(b) .................................... 608
610
Section 311(a) .................................... 613
(b) .................................... 613
Section 312(a) .................................... 701
702(a)
(b) .................................... 702(b)
(c) .................................... 702(c)
Section 313(a) .................................... 703(a)
(a)(4) .................................... 101
1004
(b) .................................... 703(a)
(c) .................................... 703(a)
(d) .................................... 703(b)
Section 314(a) .................................... 704
(b) .................................... Not Applicable
(c)(1) .................................... 102
(c)(2) .................................... 102
(c)(3) .................................... Not Applicable
(d) .................................... Not Applicable
(e) .................................... 102
Section 315(a) .................................... 601
(b) .................................... 602
(c) .................................... 601
(d) .................................... 601
(e) .................................... 514
Section 316(a) .................................... 101
(a)(1)(A) .................................... 502
512
(a)(1)(B) .................................... 513
(a)(2) .................................... Not Applicable
(b) .................................... 508
(c) .................................... 104(c)
Section 317(a)(1) .................................... 503
(a)(2) .................................... 504
(b) .................................... 1003
- --------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE> 3
Trust Indenture Indenture
Act Section Section
- --------------- ---------
Section 318(a) ........................................ 107
- --------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
-ii-
<PAGE> 4
TABLE OF CONTENTS
Page
----
RECITALS OF THE COMPANY AND THE GUARANTORS............................... 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions............................................. 2
Acquisition............................................. 3
Acquisition Closing..................................... 3
Act..................................................... 3
Affiliate............................................... 3
Agent Member............................................ 3
Allied Canada........................................... 3
Allied Canada Debentures................................ 3
Allied Finance.......................................... 4
Allied Finance Debentures............................... 4
Allied Finance Guarantee................................ 4
Allied Insurance........................................ 4
Allied Parent........................................... 4
Applicable Procedures................................... 4
Asset Disposition....................................... 4
Authenticating Agent.................................... 5
Bank Agreement.......................................... 5
Bank Facility Capacity Increase......................... 5
Bank Facility Limit..................................... 5
Base Interest........................................... 5
Board of Directors...................................... 5
Board Resolution........................................ 6
Business Day............................................ 6
Capital Lease Obligation................................ 6
Capital Stock........................................... 6
Cedel................................................... 6
Collateral.............................................. 6
Collateral Account...................................... 6
Collateral Agreement.................................... 7
Commission.............................................. 7
Common Stock............................................ 7
Company................................................. 7
Company Order........................................... 7
Company Request......................................... 7
Comparable Treasury Issue............................... 7
Comparable Treasury Price............................... 7
- -----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-i-
<PAGE> 5
Page
----
Consolidated EBITDA...................................... 8
Consolidated EBITDA Coverage Ratio....................... 8
Consolidated Income Tax Expense.......................... 9
Consolidated Interest Expense............................ 9
Consolidated Net Income.................................. 10
Consolidated Net Worth................................... 10
Consolidated Subsidiaries................................ 10
Consolidated Total Assets................................ 11
Corporate Trust Office................................... 11
corporation.............................................. 11
Credit Suisse Letter of Credit........................... 11
Debt..................................................... 11
Defaulted Interest....................................... 12
Depositary............................................... 12
DTC...................................................... 12
Euroclear................................................ 12
Event of Default......................................... 12
Excepted Disposition..................................... 12
Exchange Act............................................. 12
Exchange and Registration Rights Agreement............... 12
Exchange Offer........................................... 12
Exchange Registration Statement.......................... 12
Exchange Securities...................................... 13
Expiration Date.......................................... 13
Global Security.......................................... 13
Guarantors............................................... 13
Guaranty................................................. 13
Holder................................................... 13
IAI Securities........................................... 13
Increased Bank Facility Limit............................ 13
Incur.................................................... 14
Indenture................................................ 14
Independent Investment Banker............................ 14
Initial Purchasers....................................... 14
Intercompany Agreements.................................. 14
Interest Payment Date.................................... 15
Interest Rate or Currency Protection
Agreement................................................ 15
Investment............................................... 15
Laidlaw.................................................. 15
Lien..................................................... 15
Maturity................................................. 15
Med Track................................................ 16
Net Available Proceeds................................... 16
Net Offering Proceeds.................................... 16
- -----------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-ii-
<PAGE> 6
Page
----
Note Purchase Agreement................................... 16
Notice of Default......................................... 16
Offer Document............................................ 17
Offer Expiration Date..................................... 17
Offer to Purchase......................................... 17
Officers' Certificate..................................... 19
Opinion of Counsel........................................ 20
Original Securities....................................... 20
Outstanding............................................... 20
Parent Guarantee.......................................... 21
pari passu................................................ 21
Paying Agent.............................................. 21
Permitted Interest Rate or Currency
Protection Agreement...................................... 21
Permitted Investment...................................... 21
Person.................................................... 23
Predecessor Security...................................... 23
Preferred Stock........................................... 23
Primary Treasury Dealer................................... 23
Public Offering........................................... 23
Purchase Amount........................................... 23
Purchase Date............................................. 23
Purchase Price............................................ 23
Redeemable Interest....................................... 24
Redemption Date........................................... 24
Redemption Price.......................................... 24
Reference Treasury Dealer................................. 24
Reference Treasury Dealer Quotations...................... 24
Registered Securities..................................... 24
Registration Default...................................... 24
Registration Default Period............................... 25
Regular Record Date....................................... 25
Regulation S.............................................. 25
Regulation S Certificate.................................. 25
Regulation S Global Security.............................. 25
Regulation S Legend....................................... 25
Regulation S Securities................................... 25
Reinvested Amounts........................................ 25
Related Person............................................ 26
Required Filing Dates..................................... 26
Restricted Global Security................................ 26
Restricted Period......................................... 26
Restricted Securities..................................... 26
Restricted Securities Certificate......................... 26
Restricted Securities Legend.............................. 26
- -----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-iii-
<PAGE> 7
Page
----
Restricted Subsidiary...................................... 26
Rule 144A.................................................. 26
Rule 144A Securities....................................... 26
Sale and Leaseback Transaction............................. 27
Secured Obligations........................................ 27
Securities................................................. 27
Securities Act............................................. 27
Securities Act Legend...................................... 27
Security Register.......................................... 27
Senior Debt................................................ 27
Senior Subordinated Guarantees............................. 28
Shelf Registration Statement............................... 28
Special Interest........................................... 28
Special Mandatory Redemption............................... 28
Special Record Date........................................ 28
Specialized Waste.......................................... 28
Stated Maturity............................................ 28
Stock Purchase Agreement................................... 28
Subsidiary................................................. 28
Subsidiary Guarantees...................................... 29
Subsidiary Guarantors...................................... 29
Successor Company.......................................... 29
Successor Security......................................... 29
Treasury Yield............................................. 29
Trust Indenture Act........................................ 29
Trustee.................................................... 30
U.S. Government Obligations................................ 30
Unpermitted Debt........................................... 30
Unrestricted Securities Certificate........................ 30
Unrestricted Subsidiary.................................... 30
Vice President............................................. 30
Voting Stock............................................... 31
Weighted Average Life to Maturity.......................... 31
Wholly Owned Restricted Subsidiary......................... 31
SECTION 102. Compliance Certificates and Opinions....................... 31
SECTION 103. Form of Documents Delivered to Trustee..................... 32
SECTION 104. Acts of Holders; Record Dates.............................. 32
SECTION 105. Notices, Etc., to Trustee, Company and
Guarantors................................................. 35
SECTION 106. Notice to Holders; Waiver.................................. 36
SECTION 107. Conflict with Trust Indenture Act.......................... 36
SECTION 108. Effect of Headings and Table of Contents................... 37
SECTION 109. Successors and Assigns..................................... 37
SECTION 110. Separability Clause........................................ 37
- -----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-iv-
<PAGE> 8
Page
----
SECTION 111. Benefits of Indenture.................................... 37
SECTION 112. Governing Law............................................ 37
SECTION 113. Legal Holidays........................................... 38
ARTICLE TWO
Security and Senior Subordinated Guarantee Forms
SECTION 201. Forms Generally; Initial Forms of Rule
144A, Regulation S and IAI Securities.................. 38
SECTION 202. Form of Face of Security................................. 39
SECTION 203. Form of Reverse of Security.............................. 43
SECTION 204. Form of Trustee's Certificate of
Authentication......................................... 49
SECTION 205. Form of Senior Subordinated Guarantee.................... 50
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.......................................... 55
SECTION 302. Denominations............................................ 56
SECTION 303. Execution, Authentication, Delivery
and Dating............................................. 57
SECTION 304. Temporary Securities..................................... 58
SECTION 305. Global Securities........................................ 59
SECTION 306. Registration, Registration of Transfer and
Exchange Generally; Restrictions on
Transfer and Exchange; Securities Act
Legends.................................................. 61
(a) Registration, Registration of
Transfer and Exchange Generally.......... 61
(b) Certain Transfers and Exchanges.......... 62
(i) Restricted Global Security to
Regulation S Global Security........ 62
(ii) Regulation S Global Security to
Restricted Global Security.......... 63
(iii) Restricted Non-Global Security
to Restricted Global Security or
Regulation S Global Security........ 64
(iv) Regulation S Non-Global Security
to Restricted Global Security or
Regulation S Global Security........ 64
(v) Non-Global Security to Non-Global
Security............................ 65
- -----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-v-
<PAGE> 9
Page
----
(vi) Exchanges between Global Security
and Non-Global Security...................... 65
(vii) Regulation S Global Security to
be Held Through Euroclear or
Cedel during Restricted Period............... 66
(c) Securities Act Legends............................ 66
SECTION 307. Mutilated, Destroyed, Lost and
Stolen Securities........................................ 67
SECTION 308. Payment of Interest; Interest
Rights Preserved......................................... 69
SECTION 309. Persons Deemed Owners...................................... 70
SECTION 310. Cancellation............................................... 70
SECTION 311. Computation of Interest.................................... 71
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.................... 71
SECTION 402. Application of Trust Money................................. 73
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.......................................... 73
SECTION 502. Acceleration of Maturity; Rescission
and Annulment............................................ 76
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee............................... 77
SECTION 504. Trustee May File Proofs of Claim........................... 78
SECTION 505. Trustee May Enforce Claims
Without Possession of Securities......................... 78
SECTION 506. Application of Money Collected............................. 79
SECTION 507. Limitation on Suits........................................ 79
SECTION 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest................................................. 80
SECTION 509. Restoration of Rights and Remedies......................... 80
SECTION 510. Rights and Remedies Cumulative............................. 80
SECTION 511. Delay or Omission Not Waiver............................... 81
SECTION 512. Control by Holders......................................... 81
SECTION 513. Waiver of Past Defaults.................................... 81
SECTION 514. Undertaking for Costs...................................... 82
- -----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-vi-
<PAGE> 10
Page
----
SECTION 515. Waiver of Stay, Usury or Extension Laws.................... 82
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities........................ 83
SECTION 602. Notice of Defaults......................................... 83
SECTION 603. Certain Rights of Trustee.................................. 83
SECTION 604. Not Responsible for Recitals
or Issuance of Securities................................ 85
SECTION 605. May Hold Securities........................................ 85
SECTION 606. Money Held in Trust........................................ 85
SECTION 607. Compensation and Reimbursement............................. 86
SECTION 608. Disqualification; Conflicting Interests.................... 86
SECTION 609. Corporate Trustee Required; Eligibility.................... 86
SECTION 610. Resignation and Removal;
Appointment of Successor................................. 87
SECTION 611. Acceptance of Appointment by Successor..................... 88
SECTION 612. Merger, Conversion, Consolidation
or Succession to Business................................ 89
SECTION 613. Preferential Collection
of Claims Against Company................................ 89
SECTION 614. Appointment of Authenticating Agent........................ 89
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee
Names and Addresses of Holders........................... 91
SECTION 702. Preservation of Information;
Communications to Holders................................ 92
SECTION 703. Reports by Trustee......................................... 92
SECTION 704. Reports by Company and Guarantors.......................... 93
SECTION 705. Officers' Certificate with Respect
to Change in Interest Rates.............................. 93
ARTICLE EIGHT
Merger, Consolidation, Etc.
SECTION 801. Mergers, Consolidations and Certain
Transfers, Leases and Acquisitions
of Assets................................................ 93
- -----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-vii-
<PAGE> 11
Page
----
SECTION 802. Successor Substituted..................................... 96
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures
Without Consent of Holders.............................. 96
SECTION 902. Supplemental Indentures
with Consent of Holders................................. 97
SECTION 903. Execution of Supplemental Indentures...................... 98
SECTION 904. Effect of Supplemental Indentures......................... 99
SECTION 905. Conformity with Trust Indenture Act....................... 99
SECTION 906. Reference in Securities
to Supplemental Indentures.............................. 99
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest................ 99
SECTION 1002. Maintenance of Office or Agency...........................100
SECTION 1003. Money for Security Payments
to Be Held in Trust.....................................100
SECTION 1004. Existence.................................................102
SECTION 1005. Maintenance of Properties.................................102
SECTION 1006. Payment of Taxes and Other Claims.........................102
SECTION 1007. Maintenance of Insurance..................................103
SECTION 1008. Limitation on Consolidated Debt...........................103
SECTION 1009. Limitation on Layered and Junior Debt.....................105
SECTION 1010. Limitation on Restricted Payments.........................106
SECTION 1011. Limitations Concerning Distributions by
Subsidiaries, Etc.......................................108
SECTION 1012. Limitation on Liens.......................................109
SECTION 1013. Limitation on Transactions with
Affiliates and Related Persons..........................110
SECTION 1014. Limitation on Certain Asset Dispositions..................111
SECTION 1015. Change of Control.........................................114
SECTION 1016. Provision of Financial Information........................116
SECTION 1017. Resale of Acquired Securities.............................117
SECTION 1018. Unrestricted Subsidiaries.................................117
SECTION 1019. Limitation on Sale of
Capital Stock of Subsidiaries...........................119
SECTION 1020. Restriction on Business and Incurrence of
Debt by Allied Finance..................................120
- -----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-viii-
<PAGE> 12
Page
----
SECTION 1021. Statement by Officers as to
Default; Compliance Certificates..........................120
SECTION 1022. Waiver of Certain Covenants.................................120
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Collateral Agreement; Special Mandatory
Redemption................................................121
SECTION 1102. Redemption at the Election of
the Company...............................................122
SECTION 1103. Applicability of Article....................................122
SECTION 1104. Election to Redeem; Notice to Trustee.......................122
SECTION 1105. Selection by Trustee of Securities
to Be Redeemed............................................123
SECTION 1106. Notice of Redemption........................................123
SECTION 1107. Deposit of Redemption Price;
Liquidation of Collateral Account
and Draw on Credit Suisse
Letter of Credit..........................................124
SECTION 1108. Securities Payable on Redemption Date.......................125
SECTION 1109. Securities Redeemed in Part.................................126
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance
or Covenant Defeasance....................................126
SECTION 1202. Defeasance and Discharge....................................126
SECTION 1203. Covenant Defeasance.........................................127
SECTION 1204. Conditions to Defeasance or
Covenant Defeasance.......................................127
SECTION 1205. Deposited Money and U.S. Government
Obligations to be Held in Trust;
Other Miscellaneous Provisions............................130
SECTION 1206. Reinstatement...............................................131
ARTICLE THIRTEEN
Senior Subordinated Guarantee
SECTION 1301. Senior Subordinated Guarantee...............................131
SECTION 1302. Execution and Delivery of Senior
- -----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-ix-
<PAGE> 13
Page
----
Subordinated Guarantees...................................135
SECTION 1303. Subsidiary Guarantors May Consolidate,
Etc., on Certain Terms....................................136
SECTION 1304. Release of Guarantors.......................................136
SECTION 1305. Additional Guarantors.......................................137
ARTICLE FOURTEEN
Subordination of Securities
and Senior Subordinated Guarantees
SECTION 1401. Securities Subordinate to Senior Debt.......................138
SECTION 1402. Payment Over of Proceeds Upon
Dissolution, Etc..........................................138
SECTION 1403. No Payment When Senior Debt in Default......................140
SECTION 1404. Certain Payments Permitted..................................143
SECTION 1405. Subrogation to Rights of Holders of
Senior Debt...............................................143
SECTION 1406. Provisions Solely to Define Relative
Rights....................................................144
SECTION 1407. Trustee to Effectuate Subordination.........................145
SECTION 1408. No Waiver of Subordination Provisions.......................145
SECTION 1409. Notice to Trustee...........................................145
SECTION 1410. Reliance on Judicial Order or Certificate
of Liquidating Agent......................................146
SECTION 1411. Trustee Not Fiduciary for Holders of
Senior Debt...............................................147
SECTION 1412. Rights of Trustee as Holder of Senior
Debt; Preservation of Trustee's
Rights....................................................147
SECTION 1413. Article Applicable to Paying Agents.........................147
SECTION 1414. Defeasance of this Article Fourteen.........................147
ARTICLE FIFTEEN
Jurisdiction and Consent to Service of Process
SECTION 1501. Jurisdiction and Consent to Service of
Process...................................................148
SCHEDULE I -- List of Subsidiary Guarantors
ANNEX A -- Form of Regulation S Certificate
- -----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-x-
<PAGE> 14
Page
----
ANNEX B -- Form of Restricted Securities Certificate
ANNEX C -- Form of Unrestricted Securities Certificate
- -----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-xi-
<PAGE> 15
INDENTURE, dated as of December 1, 1996, among ALLIED WASTE NORTH AMERICA, INC.,
a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 7201 E.
Camelback Road, Suite 375, Scottsdale, AZ 85251, each of the GUARANTORS (as
hereinafter defined) Allied Waste Finance (Canada), Ltd., as future Guarantor,
and FIRST BANK NATIONAL ASSOCIATION, a national banking association, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY AND THE GUARANTORS
The Company has duly authorized the creation of an issue of
$525,000,000 aggregate principal amount of its 10 1/4% Senior Subordinated Notes
due 2006 (herein called the "Securities") of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture. The Securities may consist of
either or both of Original Securities or Exchange Securities, each as defined
herein. The Original Securities and the Exchange Securities shall rank pari
passu with one another.
Allied Parent owns beneficially and of record 100% of the Capital
Stock of the Company and Allied Finance; the Company, directly or indirectly,
owns beneficially and of record 100% of the Capital Stock or other ownership
interests, as the case may be, of each Subsidiary Guarantor; Allied Parent,
Allied Finance, the Company and the Subsidiary Guarantors are members of the
same consolidated group of companies and are engaged in related businesses and
the Guarantors will derive direct and indirect economic benefit from the
issuance of the Securities. Accordingly, each of the Guarantors has duly
authorized the execution and delivery of this Indenture to provide for its
Senior Subordinated Guarantees with respect to the Securities as set forth in
this Indenture.
All things necessary (i) to make the Securities, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, (ii) to make the Senior
Subordinated Guarantees of each of the Guarantors, when executed by the
respective Guarantors and endorsed on the Securities executed, authenticated and
delivered hereunder, the valid obligations of the respective Guarantors, and
(iii) to make this Indenture a valid agreement of the Company and each of the
Guarantors, all in accordance with their respective terms, have been done.
<PAGE> 16
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation;
(4) all references in this Indenture, the Securities and the Senior
Subordinated Guarantees to interest in respect of any Security shall be
deemed to include all Special Interest, if any, in respect of such
Security, unless the context otherwise requires, and express mention of
the payment of Special Interest in any provision hereof or thereof shall
not be construed as excluding reference to Special Interest in those
provisions hereof or thereof where such express mention is not made; all
references in this Indenture, the Securities and the Senior Subordinated
Guarantees to principal in respect of any Security shall be deemed to
include any Redemption Price or Purchase Price payable in respect of such
Security pursuant to any
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<PAGE> 17
redemption or Offer to Purchase hereunder (and all such references to the
Stated Maturity of the principal in respect of any Security shall be
deemed to include the Redemption Date with respect to any such Redemption
Price and the Purchase Date with respect to any such Purchase Price), and
express mention of the payment of any Redemption Price or Purchase Price
in any provision hereof or thereof shall not be construed as excluding
reference to any Redemption Price or Purchase Price in those provisions
hereof or thereof where such express reference is not made);
(5) unless the context otherwise requires, any reference to
"Article", "Section" or "Annex" refers to an Article or Section of or
Annex to this Indenture; and
(6) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Acquisition" has the meaning specified in the definition of Stock
Purchase Agreement.
"Acquisition Closing" means the date of consummation of the
Acquisition pursuant to the Stock Purchase Agreement.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent Member" means any member of, or participant in, the
Depositary.
"Allied Canada" means Allied Waste Holdings (Canada) Ltd., a
Canadian corporation and a Subsidiary of the Company.
"Allied Canada Debentures" means the Zero Coupon Junior Subordinated
Debenture of Allied Canada and the 7%
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<PAGE> 18
Junior Subordinated Debenture of Allied Canada to be issued to Laidlaw in
connection with the Acquisition and to be subsequently transferred by Laidlaw to
Allied Finance in exchange for the Allied Finance Debentures.
"Allied Finance" means Allied Waste Finance (Canada) Ltd., a
Canadian corporation and a Subsidiary of Allied Parent.
"Allied Finance Debentures" means the Zero Coupon Junior
Subordinated Debenture of Allied Finance and the 7% Junior Subordinated
Debenture of Allied Finance to be issued to Laidlaw in exchange for the Allied
Canada Debentures issued to Laidlaw in connection with the Acquisition.
"Allied Finance Guarantee" has the meaning specified in Section
1305; provided that any reference herein to the "Allied Finance Guarantee" shall
be deemed to refer to the Allied Fiance Guarantee after it has been issued by
Allied Finance upon the closing of the Acquisition pursuant to the provisions of
Section 1305.
"Allied Insurance" means Allied Insurance and Indemnity Corporation,
a Vermont corporation and a Subsidiary of the Company, engaged solely in the
business of issuing insurance policies with respect to the closure and
post-closure financial assurance obligations of the Company and its Restricted
Subsidiaries.
"Allied Parent" means Allied Waste Industries, Inc., a Delaware
corporation and the owner of all of the Capital Stock of the Company.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, Euroclear and Cedel,
in each case to the extent applicable to such transaction and as in effect at
the time of such transfer or transaction.
"Asset Disposition" by any Person that is the Company or any
Restricted Subsidiary means any transfer, conveyance, sale, lease or other
disposition by such Person or any of its Restricted Subsidiaries (including a
consolidation or merger or other sale of any Restricted Subsidiary with, into or
to another Person in a transaction in which such Subsidiary ceases to be a
Restricted Subsidiary of such Person) of (i) shares of Capital Stock (other than
directors' qualifying shares) or other ownership interests of a Restricted
Subsidiary or (ii) the property or assets of such Person or any Restricted
Subsidiary
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<PAGE> 19
representing a division or line of business or (iii) other assets or rights of
such Person or any Restricted Subsidiary outside of the ordinary course of
business, but excluding in each case in Clauses (i), (ii) and (iii), (x) a
disposition by a Subsidiary of such Person to such Person or a Wholly Owned
Restricted Subsidiary or by such Person to a Wholly Owned Restricted Subsidiary,
(y) the disposition of all or substantially all of the assets of the Company in
a manner permitted pursuant to the provisions of Article Eight and (z) any
disposition that constitutes a Restricted Payment or Permitted Investment that
is permitted pursuant to Section 1010.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.
"Bank Agreement" means the Credit Agreement to be entered into by
the Company pursuant to the Commitment Letter, dated September 17, 1996, as
amended by the Amendment to Commitment Letter dated as of November 25, 1996,
from Goldman Sachs Credit Partners L.P., Citibank, N.A., Citicorp Securities,
Inc., Citicorp USA, Inc. and Credit Suisse to the Company, or any bank credit
agreement that replaces, amends, supplements, restates or renews such Credit
Agreement.
"Bank Facility Capacity Increase" means a replacement, amendment,
supplement, restatement, renewal or other modification of the Bank Agreement
that increases the aggregate amount of borrowings permitted under the Bank
Agreement.
"Bank Facility Limit" means (x) $1,275 million less principal
payments of term loans and permanent commitment reductions with respect to
revolving loans under the Bank Agreement since the date of this Indenture or (y)
following a Bank Facility Capacity Increase, the Increased Bank Facility Limit,
less principal payment of term loans and permanent commitment reductions with
respect to revolving loans under the Bank Agreement, as so replaced, amended,
supplemented, restated, renewed or modified, since the date of such Bank
Facility Capacity Increase.
"Base Interest" means the interest that would otherwise accrue on
the Securities under the terms thereof and the Indenture, without giving effect
to any Special Interest.
"Board of Directors" means, with respect to the Company or any
Guarantor, either the board of directors of
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<PAGE> 20
the Company or such Guarantor, as the case may be, or any duly authorized
committee of that board. Except as otherwise provided or unless the context
otherwise requires, each reference herein to the "Board of Directors" shall mean
the Board of Directors of the Company.
"Board Resolution" of the Company or any Guarantor means a copy of a
resolution certified by the Secretary or an Assistant Secretary of the Company
or such Guarantor, as the case may be, to have been duly adopted by its Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee. Except as otherwise expressly provided or unless
the context otherwise requires, each reference herein to a "Board Resolution"
shall mean a Board Resolution of the Company.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other arrangements conveying
the right to use) real or personal property of such Person which is required to
be classified and accounted for as a capital lease or a liability on a balance
sheet of such Person in accordance with generally accepted accounting
principles. The stated maturity of such obligation shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty. The principal amount of such obligation shall be the capitalized amount
thereof that would appear on a balance sheet of such Person in accordance with
generally accepted accounting principles.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such Person.
"Cedel" means Cedel, S.A. (or any successor securities clearing
agency).
"Collateral" has the meaning specified in Section 1101.
"Collateral Account" has the meaning specified in Section 1101.
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<PAGE> 21
"Collateral Agreement" means the Senior Subordinated Note Collateral
Agreement, dated as of December 5, 1996 between the Company and First Bank
National Association, as Trustee.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to any other shares of Capital Stock of such Person.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Order" or "Company Request" means a written request or
order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Comparable Treasury Issue" means, on any date, the United States
Treasury security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Securities on such date that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of a
maturity comparable to the remaining term of the Securities on such date.
"Independent Investment Banker" means Goldman, Sachs & Co. or, if such firm is
unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any Redemption
Date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third Business Day preceding such Redemption Date, as set forth in
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<PAGE> 22
the daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations
for U.S. Government Securities" or (ii) if such release (or any successor
release) is not published or does not contain such prices on such Business Day,
(A) the average of the Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any Redemption Date, the average, as determined by the Trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day
preceding such Redemption Date.
"Consolidated EBITDA" of any Person means for any period the
Consolidated Net Income for such period increased by the sum of (i) Consolidated
Interest Expense of such Person for such period, plus (ii) Consolidated Income
Tax Expense of such Person for such period, plus (iii) the consolidated
depreciation and amortization expense deducted in determining the Consolidated
Net Income of such Person for such period; provided, however, that the
Consolidated Interest Expense, Consolidated Income Tax Expense and consolidated
depreciation and amortization expense of a Consolidated Subsidiary of such
Person shall be added to the Consolidated Net Income pursuant to the foregoing
only (x) to the extent and in the same proportion that the Consolidated Net
Income of such Consolidated Subsidiary was included in calculating the
Consolidated Net Income of such Person and (y) only to the extent that the
amount specified in Clause (x) is not subject to restrictions that prevent the
payment of dividends or the making of distributions to such Person.
"Consolidated EBITDA Coverage Ratio" of any Person means for any
period the ratio of (i) Consolidated EBITDA of such Person for such period to
(ii) the sum of (A) Consolidated Interest Expense of such Person for such period
plus (B) the annual interest expense (including the amortization of debt
discount) with respect to any Debt incurred or proposed to be Incurred by such
Person or its Consolidated Subsidiaries since the beginning of such period to
the extent not included in Clause (ii)(A), minus (C) Consolidated Interest
Expense of such Person with respect to any Debt that is no longer outstanding or
that will no longer be outstanding as a result of the transaction with respect
to
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<PAGE> 23
which the Consolidated EBITDA Coverage Ratio is being calculated, to the extent
included within Clause (ii)(A); provided, however, that in making such
computation, the Consolidated Interest Expense of such Person attributable to
interest on any Debt bearing a floating interest rate shall be computed on a pro
forma basis as if the rate in effect on the date of computation had been the
applicable rate for the entire period; and provided further, that, in the event
such Person or any of its Consolidated Subsidiaries has made acquisitions or
dispositions of assets not in the ordinary course of business (including the
acquisition by the Company of the Subsidiaries of Allied Parent, the acquisition
by the Company of the Subsidiaries of Laidlaw pursuant to the Acquisition and
any other acquisitions of any other Persons by merger, consolidation or purchase
of Capital Stock) during or after such period, the computation of the
Consolidated EBITDA Coverage Ratio (and for the purpose of such computation, the
calculation of Consolidated Net Income, Consolidated Interest Expense,
Consolidated Income Tax Expense and Consolidated EBITDA) shall be made on a pro
forma basis as if the acquisitions or dispositions had taken place on the first
day of such period.
"Consolidated Income Tax Expense" of any Person means for any period
the consolidated provision for income taxes of such Person and its Consolidated
Subsidiaries for such period determined in accordance with generally accepted
accounting principles.
"Consolidated Interest Expense" of any Person means for any period
the consolidated interest expense included in a consolidated income statement
(net of interest income) of such Person and its Consolidated Subsidiaries for
such period determined in accordance with generally accepted accounting
principles, including without limitation or duplication (or, to the extent not
so included, with the addition of), (i) the portion of any rental obligation in
respect of any Capital Lease Obligation allocable to interest expense in
accordance with generally accepted accounting principles; (ii) the amortization
of Debt discounts; (iii) any payments or fees with respect to letters of credit,
bankers' acceptances or similar facilities; (iv) fees with respect to interest
rate swap or similar agreements or foreign currency hedge, exchange or similar
agreements; (v) any Preferred Stock dividends declared and paid or payable in
cash; and (vi) any interest capitalized in accordance with generally accepted
accounting principles; provided, however, that Consolidated Interest Expense
shall not include interest expense or amortization of Debt discounts relating to
the Allied Canada Debentures.
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<PAGE> 24
"Consolidated Net Income" of any Person means for any period the
consolidated net income (or loss) of such Person and its Consolidated
Subsidiaries for such period determined in accordance with generally accepted
accounting principles; provided that there shall be excluded therefrom (i) the
net income (or loss) of any Person acquired by such Person or a Subsidiary of
such Person in a pooling-of-interests transaction for any period prior to the
date of such transaction (subject to the final proviso of the definition of
Consolidated EBITDA Coverage Ratio when Consolidated Net Income is being
computed for purposes of calculating the Consolidated EBITDA Coverage Ratio),
(ii) the net income (but not net loss) of any Consolidated Subsidiary of such
Person that is subject to restrictions that prevent the payment of dividends or
the making of distributions to such Person to the extent of such restrictions,
(iii) the net income (or loss) of any Person that is not a Consolidated
Subsidiary of such Person except to the extent of the amount of dividends or
other distributions actually paid to such Person by such other Person during
such period, (iv) gains or losses on asset dispositions by such Person or its
Consolidated Subsidiaries, (v) any net income (loss) of a Consolidated
Subsidiary that is attributable to a minority interest in such Consolidated
Subsidiary, (vi) all extraordinary gains and extraordinary losses that involve a
present or future cash payment and (vii) the tax effect of any of the items
described in Clauses (i) through (vi) above.
"Consolidated Net Worth" of any Person at any date means the
consolidated stockholders' equity of such Person and its Restricted Subsidiaries
at such date, as determined on a consolidated basis in accordance with generally
accepted accounting principles, less amounts included therein which are
attributable to Redeemable Interests of such Person; provided, however, that,
with respect to the Company and its Restricted Subsidiaries, adjustments
following the date of this Indenture to the accounting books and records of the
Company and its Restricted Subsidiaries in accordance with Accounting Principles
Board Opinions Nos. 16 and 17 (or successor opinions thereto) or otherwise
resulting from the acquisition of control of the Company by another Person shall
not be given effect to.
"Consolidated Subsidiaries" of any Person means all other Persons
that would be accounted for as consolidated Persons in such Person's financial
statements in accordance with generally accepted accounting principles as of
such date or for such period, as the case may be; provided that, for any
particular period (or portion thereof) during which any Subsidiary of such
Person was an
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<PAGE> 25
Unrestricted Subsidiary, "Consolidated Subsidiaries" shall exclude such
Subsidiary for such period (or portion thereof) during which it was an
Unrestricted Subsidiary.
"Consolidated Total Assets" of any Person at any date means the
consolidated total assets of such Person and its Restricted Subsidiaries at such
date, as determined on a consolidated basis in accordance with generally
accepted accounting principles.
"Corporate Trust Office" means the office of the Trustee maintained
in New York, New York, at which at any particular time its corporate trust
business shall be administered.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Credit Suisse Letter of Credit" means the irrevocable letter of
credit, dated December 5, 1996, issued by Credit Suisse in favor of the Trustee
in the amount of $27 million under the Credit Agreement, dated as of July 30,
1996, among Allied Parent, the existing credit parties named therein, Credit
Suisse and the bank lenders party thereto.
"Debt" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person, (i) every
obligation of such Person for money borrowed, (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations Incurred in connection with the acquisition of property,
assets or businesses, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business), (v) every Capital Lease Obligation of such Person, (vi) the maximum
fixed redemption or repurchase price of Redeemable Interests of such Person at
the time of determination, (vii) every net payment obligation of such Person
under interest rate swap or similar agreements or foreign currency hedge,
exchange or similar agreements at the time of determination and (viii) every
obligation of the type referred to in Clauses (i) through (vii) of another
Person and all dividends of another Person the payment of which, in either case,
such Person has Guaranteed or for which such Person is responsible or liable,
directly or indirectly, jointly or severally, as obligor, Guarantor or
otherwise.
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<PAGE> 26
"Defaulted Interest" has the meaning specified in Section 308.
"Depositary" means, with respect to any Securities, a clearing
agency that is registered as such under the Exchange Act and is designated by
the Company to act as Depositary for such Securities (or any successor
securities clearing agency so registered).
"DTC" means The Depository Trust Company, a New York corporation.
"Euroclear" means the Euroclear Clearance System
(or any successor securities clearing agency).
"Event of Default" has the meaning specified in Section 501.
"Excepted Disposition" means a transfer, conveyance, sale, lease or
other disposition by the Company or any Restricted Subsidiary of (i) the Capital
Stock or assets of Specialized Waste or (ii) any other asset of the Company or
any Restricted Subsidiary the fair market value of which does not exceed $5
million by itself or $10 million in aggregate with all other assets disposed of
in Excepted Dispositions under this Clause (ii) in any fiscal year.
"Exchange Act" means the Securities Exchange Act of 1934 (or any
successor statute), as it may be amended from time to time.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement, dated as of December 5, 1996, among the Company,
Allied Parent, Goldman, Sachs & Co., Citicorp Securities, Inc. and CS First
Boston Corporation, as representatives of the Initial Purchasers, and the
Holders from time to time as provided therein, as such agreement may be amended
from time to time.
"Exchange Offer" means an offer made by the Company pursuant to the
Exchange and Registration Rights Agreement under an effective registration
statement under the Securities Act to exchange securities substantially
identical to Outstanding Securities (except for the differences provided for
herein) for Outstanding Securities.
"Exchange Registration Statement" means a registration statement of
the Company under the Securities Act registering Exchange Securities for
distribution pursuant to the Exchange Offer.
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<PAGE> 27
"Exchange Securities" means the Securities issued pursuant to the
Exchange Offer and their Successor Securities.
"Expiration Date" has the meaning specified in Section 104.
"Global Security" means a Security that is registered in the
Security Register in the name of a Depositary or a nominee thereof.
"Guarantors" means Allied Parent, the Subsidiary Guarantors and,
upon issuance of the Allied Finance Guarantee, Allied Finance.
"Guaranty" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing any Debt, or dividends or distributions
on any equity security, of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such Debt, (ii) to
purchase property, securities or services for the purpose of assuring the holder
of such Debt of the payment of such Debt or (iii) to maintain working capital,
equity capital or other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Debt (and
"Guaranteed", "Guaranteeing" and "Guarantor" shall have meanings correlative to
the foregoing); provided, however, that the Guaranty by any Person shall not
include endorsements by such Person for collection or deposit, in either case,
in the ordinary course of business.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"IAI Securities" means the Securities sold by the Initial Purchasers
in the initial offering contemplated by the Note Purchase Agreement in reliance
on an exemption from the registration requirements of the Securities Act other
than Rule 144A and Regulation S.
"Increased Bank Facility Limit" means, in connection with any Bank
Facility Capacity Increase, the amount that is the least of (i) the aggregate
amount of Debt permitted to be outstanding under the terms of the Bank
Agreement, as amended pursuant to such Bank Facility Capacity Increase, (ii) the
amount equal to three times
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Consolidated EBITDA of the Company for the most recently ended four fiscal
quarters period for which financial statements are available immediately
preceding the date of such Bank Facility Capacity Increase and (iii) the amount
equal to the sum of (x) the maximum amount of Debt that the Company would be
permitted to Incur on such date under the Consolidated EBITDA Coverage Ratio
test set forth in the first paragraph of Section 1008 on the terms contemplated
by the Bank Agreement, as amended pursuant to such Bank Facility Capacity
Increase, and (y) the aggregate amount of Debt outstanding under the Bank
Agreement on such date.
"Incur" means, with respect to any Debt of any Person, to create,
issue, incur (by conversion, exchange or otherwise), assume, Guarantee or
otherwise become liable in respect of such Debt, or the taking of any other
action which would cause such Debt, in accordance with generally accepted
accounting principles to be recorded on the balance sheet of such Person (and
"Incurrence", "Incurred", "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing), provided that, the Debt of any other Person
becoming a Restricted Subsidiary of such Person will be deemed for this purpose
to have been Incurred by such Person at the time such other Person becomes a
Restricted Subsidiary of such Person; provided, further, that a change in
generally accepted accounting principles that results in an obligation of such
Person that exists at such time becoming Debt shall not be deemed an Incurrence
of such Debt.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Independent Investment Banker" has the meaning specified in the
definition of "Comparable Treasury Issue."
"Initial Purchasers" means Goldman, Sachs & Co., Citicorp
Securities, Inc., CS First Boston Corporation and Jeffries & Co., Inc., as
purchasers of the Securities from the Company pursuant to the Note Purchase
Agreement.
"Intercompany Agreements" means the Management Agreement between
Allied Parent and the Company dated November 15, 1996.
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<PAGE> 29
"Interest Payment Date" means the Stated Maturity of an instalment
of interest on the Securities.
"Interest Rate or Currency Protection Agreement" of any Person means
any interest rate protection agreement (including, without limitation, interest
rate swaps, caps, floors, collars, derivative instruments and similar
agreements), and/or other types of interest hedging agreements and any currency
protection agreement (including foreign exchange contracts, currency swap
agreements or other currency hedging arrangements).
"Investment" by any Person in any other Person means (i) any direct
or indirect loan, advance or other extension of credit or capital contribution
to or for the account of such other Person (by means of any transfer of cash or
other property to any Person or any payment for property or services for the
account or use of any Person, or otherwise), (ii) any direct or indirect
purchase or other acquisition of any Capital Stock, bond, note, debenture or
other debt or equity security or evidence of Debt, or any other ownership
interest, issued by such other Person, whether or not such acquisition is from
such or any other Person, (iii) any direct or indirect payment by such Person on
a Guaranty of any obligation of or for the account of such other Person or any
direct or indirect issuance by such Person of such a Guaranty or (iv) any other
investment of cash or other property by such Person in or for the account of
such other Person.
"Laidlaw" means Laidlaw Inc., a corporation organized under the laws
of Canada.
"Lien" means, with respect to any property or assets, any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement or title exception, encumbrance,
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such property or assets
(including any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"Maturity", when used with respect to any Security, means the date
on which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
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"Med Track", means Laidlaw Med Track Medical Services, Inc., a
British Columbia corporation. Upon closing the Acquisition, the Company will own
55% of the common stock of Med Track.
"Net Available Proceeds" from any Asset Disposition by any Person
that is the Company or any Restricted Subsidiary means cash or readily
marketable cash equivalents received (including by way of sale or discounting of
a note, installment receivable or other receivable, but excluding any other
consideration received in the form of assumption by the acquiree of Debt or
other obligations relating to such properties or assets or received in any other
noncash form) therefrom by such Person, net of (i) all legal, title and
recording tax expenses, commissions and other fees and expenses Incurred and all
federal, state, provincial, foreign and local taxes required to be accrued as a
liability as a consequence of such Asset Disposition, (ii) all payments made by
such Person or its Restricted Subsidiaries on any Debt that is secured by such
assets in accordance with the terms of any Lien upon or with respect to such
assets or that must, by the terms of such Lien, or in order to obtain a
necessary consent to such Asset Disposition, or by applicable law, be repaid out
of the proceeds from such Asset Disposition, (iii) amounts provided as a reserve
by such Person or its Restricted Subsidiaries, in accordance with generally
accepted accounting principles, against liabilities under any indemnification
obligations to the buyer in such Asset Disposition (except to the extent and at
the time any such amounts are released from any such reserve, such amounts shall
constitute Net Available Proceeds) and (iv) all distributions and other payments
made to minority interest holders in Restricted Subsidiaries of such Person or
joint ventures as a result of such Asset Disposition.
"Net Offering Proceeds" of any Public Offering of securities by any
Person means the aggregate proceeds consisting of cash and cash equivalents
received by such Person from such Public Offering, net of all underwriting and
placement discounts, commissions and similar costs.
"Note Purchase Agreement" means the Purchase Agreement, dated as of
November 25, 1996, between the Company and the Initial Purchasers, as such
agreement may be amended from time to time.
"Notice of Default" means a written notice of the kind specified in
Section 501(4).
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"Offer Document" has the meaning specified in the definition of
"Offer to Purchase".
"Offer Expiration Date" has the meaning specified in the definition
of "Offer to Purchase".
"Offer to Purchase" means an offer, set forth in a writing (the
"Offer Document") sent by the Company by first class mail, postage prepaid, to
each Holder at his address appearing in the Security Register on the date of the
Offer Document, to purchase up to the principal amount of Securities specified
in such Offer Document at the purchase price specified in such Offer Document
(as determined pursuant to this Indenture). Unless otherwise required by
applicable law, the Offer Document shall specify an expiration date (the "Offer
Expiration Date") of the Offer to Purchase which shall be, subject to any
contrary requirements of applicable law, not less than 30 days or more than 60
days after the date of such Offer Document and a settlement date (the "Purchase
Date") for the purchase of Securities within five Business Days after the Offer
Expiration Date. The Company shall notify the Trustee in writing at least 15
Business Days (or such shorter period as is acceptable to the Trustee) prior to
the mailing of the Offer Document of the Company's obligation to make an Offer
to Purchase, and the Offer Document shall be mailed by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the Company.
The Offer Document shall contain information concerning the business of the
Company and its Subsidiaries which the Company in good faith believes will
enable such Holders to make an informed decision with respect to the Offer to
Purchase (which at a minimum will include (i) the most recent annual and
quarterly financial statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" required to be filed with the
Trustee pursuant to Section 1016 (which requirements may be satisfied by
delivery of such documents together with the Offer Document), (ii) a description
of material developments in the Company's business subsequent to the date of the
latest of such financial statements referred to in Clause (i) (including a
description of the events requiring the Company to make the Offer to Purchase),
(iii) if applicable, appropriate pro forma financial information concerning the
Offer to Purchase and the events requiring the Company to make the Offer to
Purchase and (iv) any other information required by applicable law to be
included therein. The Offer Document shall contain all instructions and
materials necessary to enable such Holder to tender Securities pursuant to the
Offer to Purchase. The Offer Document shall also state:
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(1) the Section of this Indenture pursuant to which the Offer to
Purchase is being made;
(2) the Offer Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the Outstanding Securities
offered to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such amount has been
determined as required by this Indenture) (the "Purchase Amount");
(4) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of Securities accepted for payment (as
specified pursuant to this Indenture);
(5) that the Holder may tender all or any portion of the Securities
registered in the name of such Holder and that any portion of a Security
tendered must be tendered in an integral multiple of $1,000 principal
amount;
(6) the place or places where Securities are to be surrendered for
tender pursuant to the Offer to Purchase;
(7) that interest on any Security not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will continue
to accrue;
(8) that on the Purchase Date the purchase price will become due and
payable upon each Security accepted for payment pursuant to the Offer to
Purchase and that interest thereon shall cease to accrue on and after the
Purchase Date;
(9) that each Holder electing to tender a Security pursuant to the
Offer to Purchase will be required to surrender such Security at the place
or places specified in the Offer Document prior to the close of business
on the Offer Expiration Date (such Security being, if the Company or the
Trustee so requires, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Trustee
duly executed by, the Holder thereof or his attorney duly authorized in
writing and bearing appropriate signature guarantees);
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(10) that Holders will be entitled to withdraw all or any portion of
Securities tendered if the Company (or its Paying Agent) receives, not
later than the close of business on the Offer Expiration Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security the Holder tendered, the
certificate number of the Security the Holder tendered and a statement
that such Holder is withdrawing all or a portion of his tender;
(11) that (a) if Securities in an aggregate principal amount less than
or equal to the Purchase Amount are duly tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase all such
Securities and (b) if Securities in an aggregate principal amount in
excess of the Purchase Amount are tendered and not withdrawn pursuant to
the Offer to Purchase, the Company shall purchase Securities having an
aggregate principal amount equal to the Purchase Amount on a pro rata
basis (with such adjustments as may be deemed appropriate so that only
Securities in denominations of $1,000 or integral multiples thereof shall
be purchased); and
(12) that in the case of any Holder whose Security is purchased only
in part, the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by
such Holder, in an aggregate principal amount equal to and in exchange for
the unpurchased portion of the Security so tendered.
Any Offer to Purchase shall be governed by and effected in accordance with the
Offer Document for such Offer to Purchase.
"Officers' Certificate" of the Company or any Guarantor means a
certificate signed by the Chairman of the Board, a Vice Chairman of the Board,
the President or a Vice President, and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, of the Company or such Guarantor, as
the case may be, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1021 shall be the principal
executive, financial or accounting officer of the Company. Unless the context
otherwise requires, each reference herein to an "Officers' Certificate" shall
mean an Officers' Certificate of the Company. References herein, or in any
Security or Senior Subordinated Guarantee, to any officer of a Guarantor
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or other Person that is a partnership shall mean such officer of the partnership
or, if none, of a general partner of the partnership authorized thereby to act
on its behalf.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Securities" means all Securities other than Exchange
Securities.
"Outstanding", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company or any Guarantor) in trust or set
aside and segregated in trust by the Company or a Guarantor (if the
Company or a Guarantor, as the case may be, shall act as a Paying Agent)
for the Holders of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made;
(iii) Securities which have been defeased pursuant to Section 1202;
and
(iv) Securities which have been paid pursuant to Section 307 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be Out-
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standing, except that, in determining whether the Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Parent Guarantee" means the unconditional guarantee, on a senior
subordinated basis, by Allied Parent of the due and punctual payment of
principal (premium, if any) and interest on the Securities, as provided pursuant
to Article Thirteen.
"pari passu", when used with respect to the ranking of any Debt of
any Person in relation to other Debt of such Person, means that each such Debt
(a) either (i) is not subordinated in right of payment to any other Debt of such
Person or (ii) is subordinate in right of payment to the same Debt of such
Person as is the other Debt and is so subordinate to the same extent and (b) is
not subordinate in right of payment to the other Debt or to any Debt of such
Person as to which the other Debt is not so subordinate.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Permitted Interest Rate or Currency Protection Agreement" of any
Person means any Interest Rate or Currency Protection Agreement entered into
with one or more financial institutions in the ordinary course of business that
is designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and which shall have a
notional amount no greater than the payments due with respect to the Debt being
hedged thereby.
"Permitted Investment" means (i) Investments in the Company or any
Person that is, or as a consequence of such Investment becomes, a Wholly Owned
Restricted Subsidiary, (ii) securities either issued directly or fully
guaranteed or insured by the government of the United States of America or any
agency or instrumentality thereof having maturities of not more than one year,
(iii) time deposits and certificates of deposit, demand deposits and banker's
acceptances having maturities of not more than one year from
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the date of deposit, of any domestic commercial bank having capital and surplus
in excess of $500 million and having peer group rating of B or better (or the
equivalent thereof) by Thompson BankWatch, Inc. or outstanding long-term debt
rated BBB or better (or the equivalent thereof) by Standard & Poor's Ratings
Group or Baa or better (or the equivalent thereof) by Moody's Investors Service,
Inc., (iv) demand deposits made in the ordinary course of business and
consistent with the Company's customary cash management policy in any domestic
office of any commercial bank organized under the laws of the United States of
America or any State thereof, (v) insured deposits issued by commercial banks of
the type described in Clause (iv) above, (vi) mutual funds whose investment
guidelines restrict such funds' investments primarily to those satisfying the
provisions of Clauses (i) through (iii) above, (vii) repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in Clauses (ii) and (iii) above entered into with any bank meeting the
qualifications specified in Clause (iii) above, (viii) commercial paper (other
than commercial paper issued by an Affiliate or Related Person) rated A-1 or the
equivalent thereof by Standard & Poor's Ratings Group or P-1 or the equivalent
thereof by Moody's Investors Service, Inc., and in each case maturing within 360
days, (ix) receivables owing to the Company or a Restricted Subsidiary of the
Company if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms, (x) any Investment
consisting of loans and advances to employees of the Company or any Restricted
Subsidiary for travel, entertainment, relocation or other expenses in the
ordinary course of business, (xi) any Investment consisting of loans and
advances by the Company or any Restricted Subsidiary to its employees, officers
and directors of the Company or Allied Parent, in connection with management
incentive plans not to exceed $5 million at any time outstanding; provided,
however, that to the extent the proceeds thereof are used to purchase Capital
Stock (other than Redeemable Interests) of Allied Parent and Allied Parent uses
the proceeds thereof to acquire Capital Stock (other than Redeemable Interests)
of the Company, such limitation on the amount of such Investments at any time
outstanding shall not apply with respect to such Investments, (xii) any
Investment consisting of a Permitted Interest Rate or Currency Protection
Agreement, (xiii) any Investment acquired by the Company or any of its
Restricted Subsidiaries (A) in exchange for any other Investment or accounts
receivable held by the Company or any such Restricted Subsidiary in connection
with or as a result of a bankruptcy, workout, reorganization or recapitalization
of the issuer of such other Investment or accounts receivable
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or (B) as a result of a foreclosure by the Company or any of its Restricted
Subsidiaries with respect to any secured Investment or other transfer of title
with respect to any secured Investment in default, (xiv) any Investment that
constitutes part of the consideration from an Asset Disposition made pursuant
to, and in compliance with, Section 1014, (xv) Investments the payment for which
consists exclusively of Capital Stock (exclusive of Redeemable Interests) of the
Company and (xvi) other Investments in an aggregate amount of not to exceed $50
million.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Security" of any particular Security means every
Security issued before, and evidencing all or a portion of the same debt as that
evidenced by, such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 307 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall
be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of such Person of any class or classes (however designated)
that ranks prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Primary Treasury Dealer" has the meaning specified in the
definition of "Reference Treasury Dealer."
"Public Offering" means any underwritten public offering of Common
Stock pursuant to a registration statement filed under the Securities Act.
"Purchase Amount" has the meaning specified in the definition of
"Offer to Purchase".
"Purchase Date" has the meaning specified in the definition of
"Offer to Purchase".
"Purchase Price" has the meaning specified in the definition of
"Offer to Purchase".
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"Redeemable Interest" of any Person means any equity security of or
other ownership interest in such Person that by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable) or
otherwise (including upon the occurrence of an event) matures or is required to
be redeemed (pursuant to any sinking fund obligation or otherwise) or is
convertible into or exchangeable for Debt or is redeemable at the option of the
holder thereof, in whole or in part, at any time prior to the final Stated
Maturity of the Securities.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Reference Treasury Dealer" means each of Goldman, Sachs & Co.,
Citicorp Securities, Inc. and CS First Boston Corporation and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" has the meaning specified in
the definition of "Comparable Treasury Price."
"Registered Securities" means the Exchange Securities and all other
Securities sold or otherwise disposed of pursuant to an effective registration
statement under the Securities Act, together with their respective Successor
Securities.
"Registration Default" means the occurrence of any of the following
events: (i) the Company has not filed the Exchange Registration Statement or
Shelf Registration Statement on or before the date on which such registration
statement is required to be filed pursuant to the Exchange and Registration
Rights Agreement, (ii) the Exchange Registration Statement or Shelf Registration
Statement has not become effective or been declared effective by the Commission
on or before the date on which such registration statement is required to become
or be declared effective under the requirements of the Exchange and Registration
Rights Agreement or (iii) the Exchange Offer has not been completed within 45
days after the initial effective date of the Exchange Registration Statement
relating to the Exchange
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<PAGE> 39
Offer (if the Exchange Offer is then required to be made under the Exchange and
Registration Rights Agreement) or (iv) any Exchange Registration Statement or
Shelf Registration Statement required to be filed pursuant the Exchange and
Registration Rights Agreement is filed and declared effective but shall
thereafter either be withdrawn by the Company or shall become subject to an
effective stop order issued pursuant to Section 8(d) of the Securities Act
suspending the effectiveness of such registration statement (except as
specifically permitted herein) without being succeeded immediately by an
additional registration statement filed and declared effective.
"Registration Default Period" means any period during which a
Registration Default has occurred and is continuing.
"Regular Record Date" for the interest payable on any Interest
Payment Date means May 15 and November 15 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Regulation S Certificate" means a certificate substantially in the
form set forth in Annex A.
"Regulation S Global Security" has the meaning
specified in Section 201.
"Regulation S Legend" means a legend substantially in the form of
the legend required in the form of Security set forth in Section 202 to be
placed upon Regulation S Securities.
"Regulation S Securities" means all Securities required pursuant to
Section 306(c) to bear a Regulation S Legend. Such term includes the Regulation
S Global Security.
"Reinvested Amounts", with respect to any Asset Disposition, means
amounts invested, within one year from the later of the date of the related
Asset Disposition or the receipt of the Net Available Proceeds from such Asset
Disposition, in assets that will be used in the business of the Company or any
of its Wholly Owned Restricted Subsidiaries as such business is conducted prior
to such Asset Disposition (determined by the Board of Directors in good faith,
as evidenced by a resolution of such Board of
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<PAGE> 40
Directors), and, upon consummation of such investment, are owned by the Company
or any of its Restricted Subsidiaries.
"Related Person" of any Person means, without limitation, any other
Person owning (a) 5% or more of the outstanding Common Stock of such Person or
(b) 5% or more of the Voting Stock of such Person.
"Required Filing Dates" has the meaning specified in Section 1016.
"Restricted Global Security" has the meaning specified in Section
201.
"Restricted Period" means the period of 41 consecutive days
beginning on and including the later of (i) the day on which Securities are
first offered to persons other than distributors (as defined in Regulation S) in
reliance on Regulation S and (ii) the last original issue date of the
Securities.
"Restricted Securities" means all Securities required pursuant to
Section 306(c) to bear a Restricted Securities Legend. Such term includes the
Restricted Global Security.
"Restricted Securities Certificate" means a certificate
substantially in the form set forth in Annex B.
"Restricted Securities Legend" means a legend substantially in the
form of the legend required in the form of Security set forth in Section 202 to
be placed upon a Restricted Security.
"Restricted Subsidiary" means (i) at any date, a Subsidiary of the
Company that is not an Unrestricted Subsidiary as of such date and (ii) for any
period, a Subsidiary of the Company that for any portion of such period is not
an Unrestricted Subsidiary, provided that such term shall mean such Subsidiary
only for such portion of such period.
"Rule 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Rule 144A Securities" means the Securities purchased by the Initial
Purchasers from the Company pursuant to the Note Purchase Agreement, other than
the IAI Securities and the Regulation S Securities.
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<PAGE> 41
"Sale and Leaseback Transaction" means an arrangement with any
lender or investor or to which such lender or investor is a party providing for
the leasing by a Person of any property or asset of such Person which has been
or is being sold or transferred, more than 270 days after the acquisition
thereof or the completion of construction or commencement of operation thereof,
by such Person to such lender or investor or to any person to whom funds have
been or are to be advanced by such lender or investor on the security of such
property or asset. The stated maturity of such arrangement shall be the date of
the last payment of rent or any other amount due under such arrangement prior to
the first date on which such arrangement may be terminated by the lessee without
payment of a penalty.
"Secured Obligations" has the meaning specified in Section 1101.
"Securities" has the meaning specified in the first paragraph of the
recitals to this instrument and includes the Exchange Securities.
"Securities Act" means the Securities Act of 1933 (or any successor
statute), as it may be amended from time to time.
"Securities Act Legend" means a Restricted Securities Legend or a
Regulation S Legend.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 306.
"Senior Debt" means (i) with respect to the Company, Debt created
pursuant to the Bank Agreement, (ii) with respect to the Company, any Guarantor
or any Restricted Subsidiary, Debt of such Person referred to in Clauses (i),
(ii), (iii), (v) or (vii) of the definition of Debt, whether Incurred on or
prior to the date of this Indenture or thereafter Incurred, (iii) with respect
to the Company, any Guarantor or any Restricted Subsidiary, Guarantees by such
Person of Senior Debt and (iv) amendments, modifications, renewals, extensions,
refinancings and refundings of any such Debt; provided, however, the following
shall not constitute Senior Debt: (A) any Debt owed to a Person when such Person
is a Subsidiary of the Company, (B) any Debt which by the terms of the
instrument creating or evidencing the same is pari passu or subordinated in
right of payment to the Securities, (C) any Debt Incurred in violation of this
Indenture or (D) any Debt which is subordinate in right of payment in any
respect to any other Debt of the Company. For purposes of this definition,
"Debt" includes any
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<PAGE> 42
obligation to pay principal, premium (if any), interest, penalties,
reimbursement or indemnity amounts, fees and expenses (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not a claim for post-petition
interest is allowed in such proceeding).
"Senior Subordinated Guarantees" means the Parent Guarantee, the
Allied Finance Guarantee and the Subsidiary Guarantees.
"Shelf Registration Statement" means a shelf registration statement
under the Securities Act filed by the Company, if required by, and meeting the
requirements of, the Exchange and Registration Rights Agreement, registering
Original Securities for resale.
"Special Interest" has the meaning specified in the form of the
Securities set forth in Section 202.
"Special Mandatory Redemption" has the meaning specified in Section
1101.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 308.
"Specialized Waste" means Specialized Waste Systems, Inc., a Texas
corporation. The Company owns 50% of the Common Stock and 100% of the Preferred
Stock of Specialized Waste.
"Stated Maturity", when used with respect to any Security or any
instalment of interest thereon, means the date specified in such Security as the
fixed date on which the principal of such Security or such instalment of
interest, as the case may be, is due and payable.
"Stock Purchase Agreement" means the Stock Purchase Agreement, dated
September 17, 1996, among Allied Parent, the Company, Allied Canada, Laidlaw and
certain of its subsidiaries for the acquisition (the "Acquisition") by Allied
Parent and certain of its Subsidiaries of substantially all of the non-hazardous
solid waste management business conducted by Laidlaw in the United States and
Canada.
"Subsidiary" of any Person means (i) a corporation more than 50% of
the combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such
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Person or by such Person and one or more Subsidiaries thereof, (ii) a
partnership of which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, is the general partner and has the power to direct the policies,
management and affairs or (iii) any other Person (other than a corporation) in
which such Person, or one or more other Subsidiaries of such Person or such
Person and one or more other Subsidiaries thereof, directly or indirectly, has
at least a majority ownership interest and power to direct the policies,
management and affairs thereof. Except as otherwise expressly provided or unless
the context otherwise requires, references herein to "Subsidiary" shall mean a
Subsidiary of the Company.
"Subsidiary Guarantees" means the unconditional guarantees on a
senior subordinated basis by the respective Subsidiary Guarantors of the due and
punctual payment of principal, premium, if any, and interest on the Securities,
as provided pursuant to Article Thirteen.
"Subsidiary Guarantors", as of any time, means each and all of the
Restricted Subsidiaries at such time, other than Allied Insurance, which
Subsidiary Guarantors as of the date of this Indenture are set forth in Schedule
I hereto.
"Successor Company" has the meaning specified in Section 801.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 307 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Treasury Yield" means, with respect to any Redemption Date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
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"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
U.S. Government Obligation or a specific payment of principal of or interest on
any such U.S. Government Obligation held by such custodian for the account of
the holder of such depository receipt, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
"Unpermitted Debt" has the meaning specified in Section 1018.
"Unrestricted Securities Certificate" means a certificate
substantially in the form set forth in Annex C.
"Unrestricted Subsidiary" means (i) at any date, a Subsidiary of the
Company that is an Unrestricted Subsidiary in accordance with the provisions of
Section 1018 and (ii) for any period, a Subsidiary of the Company that for any
portion of such period is an Unrestricted Subsidiary in accordance with the
provisions of Section 1018, provided that such term shall mean such Subsidiary
only for such portion of such period.
"Vice President", when used with respect to the Company, any
Guarantor or the Trustee, means any vice president of such Person, whether or
not designated by a
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number or a word or words added before or after the title "vice president".
"Voting Stock" of any Person means Capital Stock of such Person that
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Weighted Average Life to Maturity" means, as of the date of
determination, with respect to any Debt, the quotient obtained by dividing (i)
the sum of the products of the number of years from the date of determination to
the dates of each successive scheduled principal payment of such Debt and the
amount of such principal by (ii) the sum of all such principal payments.
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by the
Company or by one or more Wholly Owned Restricted Subsidiaries or by the Company
and one or more Wholly Owned Restricted Subsidiaries.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required under the Trust
Indenture Act or this Indenture. Each such certificate or opinion shall be given
in the form of an Officers' Certificate, if to be given by an officer of the
Company, or an Opinion of Counsel, if to be given by counsel, and shall comply
with the requirements of the Trust Indenture Act and any other requirement set
forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
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(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in
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and evidenced by one or more instruments of substantially similar tenor signed
by such Holders in person or by agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security
Register.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders of Securities, provided that the Company may not set a record date for,
and the provisions of this paragraph shall not apply with respect to, the
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giving or making of any notice, declaration, request or direction referred to in
the next paragraph. If any record date is set pursuant to this paragraph, the
Holders of Outstanding Securities on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the Company
from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Trustee in writing and to each
Holder of Securities in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in Section 502, (iii) any request to institute proceedings referred
to in Section 507(2) or (iv) any direction referred to in Section 512. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Trustee, at the Company's
expense, shall
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cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the
party hereto which sets such record date may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities in the manner set forth in Section
106, on or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee, Company and
Guarantors.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company or any Guarantor
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Department, or at any other address previously
furnished in writing to the Holders or the Company by the Trustee, or,
with respect to notices by the Company or any Guarantor, transmitted by
facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers: (612) 244-0711 or to any other facsimile
number
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previously furnished in writing to the Company by the Trustee, or
(2) the Company or any Guarantor by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid,
to it addressed to it at the address of the Company's principal office
specified in the first paragraph of this instrument or at any other
address previously furnished in writing to the Trustee by the Company or,
with respect to notices by the Trustee, transmitted by facsimile
transmission (confirmed by guaranteed overnight courier) to the following
facsimile number: (602) 481-9347 or to any other facsimile number
previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this
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Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be. Until such
time as this Indenture shall be qualified under the Trust Indenture Act, this
Indenture, the Company, the Guarantors and the Trustee shall be deemed for all
purposes hereof to be subject to and governed by the Trust Indenture Act to the
same extent as would be the case if this Indenture were so qualified on the date
hereof.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company or any
Guarantor shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities or the
Senior Subordinated Guarantees shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities or the Senior
Subordinated Guarantees, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder, the Holders of
Securities and the holders of any Senior Debt, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
THIS INDENTURE, THE SECURITIES AND THE SENIOR SUBORDINATED
GUARANTEES ENDORSED THEREON SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.
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SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
Purchase Date or Stated Maturity of any Security shall not be a Business Day,
then (notwithstanding any other provision of this Indenture or of the Securities
or any Senior Subordinated Guarantee) payment of interest or principal (and
premium, if any) need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date, Redemption Date or Purchase Date or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date, Purchase Date or Stated Maturity,
as the case may be.
ARTICLE TWO
Security and Senior Subordinated Guarantee Forms
SECTION 201. Forms Generally; Initial Forms of Rule 144A,
Regulation S and IAI Securities.
The Securities, the Senior Subordinated Guarantees to be endorsed
thereon and the Trustee's certificates of authentication shall be in
substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities
or Senior Subordinated Guarantees, as the case may be, as evidenced by their
execution thereof.
The definitive Securities and Senior Subordinated Guarantees to be
endorsed thereon shall be printed, lithographed or engraved or produced by any
combination of these methods on steel engraved borders or may be produced in any
other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities or Senior Subordinated Guarantees, as the case may be, as evidenced
by their execution thereof.
Upon their original issuance, Rule 144A Securities shall be issued
in the form of one or more Global Securities registered in the name of DTC, as
Depositary, or its nominee and deposited with the Trustee, as custodian for DTC,
for
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credit by DTC to the respective accounts of beneficial owners of the Securities
represented thereby (or such other accounts as they may direct). Such Global
Securities, together with their Successor Securities which are Global Securities
other than the Regulation S Global Security are collectively herein called the
"Restricted Global Security".
Upon their original issuance, Regulation S Securities shall be
issued in the form of one or more Global Securities registered in the name of
DTC, as Depositary, or its nominee and deposited with the Trustee, as custodian
for DTC, for credit by DTC to the respective accounts of beneficial owners of
the Securities represented thereby (or such other accounts as they may direct),
provided that upon such deposit all such Securities shall be credited to or
through accounts maintained at DTC by or on behalf of Euroclear or Cedel. Such
Global Securities, together with their Successor Securities which are Global
Securities other than the Restricted Global Security are collectively herein
called the "Regulation S Global Security".
Upon their original issuance, IAI Securities shall not be issued in
the form of a Global Security or in any other form intended to facilitate
book-entry trading in beneficial interests in such Securities.
SECTION 202. Form of Face of Security.
[IF THE SECURITY IS A RESTRICTED SECURITY, THEN INSERT -- THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A) BY THE INITIAL INVESTOR (1) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (B) BY SUBSEQUENT INVESTORS AS SET FORTH IN (A)
ABOVE OR TO AN INSTITUTION THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF
RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND,
IN EACH CASE (A) AND (B), IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. SECURITIES OWNED BY
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<PAGE> 54
AN INITIAL INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD
IN BOOK-ENTRY FORM AND MAY NOT BE TRANSFERRED WITHOUT CERTIFICATION THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS, AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW.]
[IF THE SECURITY IS A REGULATION S SECURITY, THEN INSERT -- THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON, UNLESS
THIS SECURITY IS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE.]
[IF THE SECURITY IS A GLOBAL SECURITY, THEN INSERT -- THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND
NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME
OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[IF THE SECURITY IS A GLOBAL SECURITY AND THE DEPOSITORY TRUST
COMPANY IS TO BE THE DEPOSITARY THEREFOR, THEN INSERT -- UNLESS THIS CERTIFICATE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
ALLIED WASTE NORTH AMERICA, INC.
10 1/4% SENIOR SUBORDINATED NOTES DUE 2006
GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST BY
ALLIED WASTE INDUSTRIES, INC.
AND CERTAIN SUBSIDIARIES OF
ALLIED WASTE NORTH AMERICA, INC.
[If Restricted Global Security - CUSIP No. 01958XAA5]
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<PAGE> 55
[If Regulation S Security - CUSIP No. U01971AA5]
[If Regulation S Global Security - ISIN No. USU01971AA53]
[If IAI Security - CUSIP No. 01958XAB3]
No. __________ $________
Allied Waste North America, Inc., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to __________________, or registered
assigns, the principal sum of ______________ Dollars [IF THE SECURITY IS A
GLOBAL SECURITY, THEN INSERT -- , or such other principal amount (which, when
taken together with the principal amounts of all other Outstanding Securities,
shall not exceed $525,000,000 in the aggregate at any time) as may be set forth
in the records of the Trustee hereinafter referred to in accordance with the
Indenture,] on December 1, 2006 and to pay interest thereon from December 5,
1996 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on June 1 and December 1 in each year,
commencing June 1, 1997, at the rate of 10.25% per annum, until the principal
hereof is paid or made available for payment; provided that any amount of
principal of (and premium, if any) and interest on this Security which is
overdue shall bear interest (to the extent that payment thereof shall be legally
enforceable) at the rate of 12.25% per annum, from the date such amount is due
to the day it is paid or made available for payment, and such overdue interest
shall be payable on demand [IF THE SECURITY IS AN ORIGINAL SECURITY, THEN INSERT
- -- ; provided further that, if any Registration Default occurs under the
Exchange and Registration Rights Agreement, as liquidated damages for such
Registration Default, special interest ("Special Interest"), in addition to the
Base Interest, shall accrue during the Registration Default Period for such
Registration Default at a per annum rate of 0.25% for the first 90 days of such
Registration Default Period, at a per annum rate of 0.50% for the second 90 days
of such Registration Default Period, at a per annum rate of 0.75% for the third
90 days of such Registration Default Period and at a per annum rate of 1.0%
thereafter for the remaining portion of such Registration Default Period].
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the May 15 or
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November 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date [IF THE SECURITY IS AN ORIGINAL SECURITY, THEN INSERT
- --, provided that any accrued and unpaid interest (including Special Interest)
on this Security upon the issuance of an Exchange Security in exchange for this
Security shall cease to be payable to the Holder hereof and shall be payable on
the next Interest Payment Date for such Exchange Security to the Holder thereof
on the related Regular Record Date]. Any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on the
relevant Regular Record Date and may either be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the close
of business on a Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture. Interest on this Security shall be computed on the basis set forth in
the Indenture.
Payment of the principal of (and premium, if any) and interest on
this Security will be made at the office or agency of the Company in the Borough
of Manhattan, The City of New York, New York, maintained for such purpose and at
any other office or agency maintained by the Company for such purpose, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided, however, that at
the option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register; provided further that all payments of the principal (and
premium, if any) and interest on Securities, the Holders of which have given
wire transfer instructions to the Company or its agent at least 10 Business Days
prior to the applicable payment date will be required to be made by wire
transfer of immediately available funds to the accounts specified by such
Holders in such instructions.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse
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hereof by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
ALLIED WASTE NORTH AMERICA, INC.
[SEAL]
By___________________________________
Attest:
___________________________________
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of Securities of the
Company designated as its 10 1/4% Senior Subordinated Notes Due 2006 (herein
called the "Securities"), limited in aggregate principal amount to $525,000,000,
issued and to be issued under an Indenture, dated as of December 1, 1996 (herein
called the "Indenture", which term shall have the meaning assigned to it in such
instrument), among the Company, the Guarantors named therein and First Bank
National Association, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Guarantors, the Trustee, the holders of the Senior Debt and the
Holders of the Securities and of the terms upon which the Securities, with the
Senior Subordinated Guarantees endorsed thereon, are, and are to be,
authenticated and delivered.
The Securities are subject to redemption upon not less than 30 nor
more than 60 days' notice by mail, to each Holder of Securities to be redeemed
at such Holder's address appearing in the Security Register, in amounts of
$1,000 or
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an integral multiple of $1,000, at any time on or after December 1, 2001 and
prior to maturity, as a whole or in part, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal amount)
if redeemed during the 12-month period beginning December 1, of the years
indicated,
Year Redemption Price
---- ----------------
2001 105.1250%
2002 103.4167%
2003 101.7083%
and thereafter at a Redemption Price equal to 100% of the principal amount,
together in the case of any such redemption with accrued but unpaid interest
(including Special Interest) to but excluding the Redemption Date, but interest
installments whose Stated Maturity is on or prior to such Redemption Date will
be payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Regular Record
Dates referred to on the face hereof.
The Securities are further subject to redemption, prior to December
1, 2001, at the option of the Company, in whole or in part, at any time, upon
not less than 30 nor more than 60 days' notice by mail to each Holder of
Securities to be redeemed at such Holder's address appearing in the Security
Register, in amounts of $1,000 or an integral multiple of $1,000, at a
Redemption Price equal to the greater of (i) 100% of their principal amount or
(ii) the sum of the present value of the remaining scheduled payments of
principal and interest thereon discounted to maturity on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Yield plus 75 basis points, plus in each case accrued interest (including
Special Interest) to but excluding the Redemption Date, but interest
installments whose Stated Maturity is on or prior to such Redemption Date will
be payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Regular Record
Dates referred to on the face hereof.
The Securities are further subject to redemption, at any time, or
from time to time, prior to the date that is 180 days after the Acquisition
Closing, in an amount up to $100 million in aggregate principal amount, at the
option of the Company, from the net proceeds of one or more Asset Dispositions
by the Company or its Subsidiaries, at a Redemption Price equal to 110.25% of
the principal amount
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thereof, together with accrued but unpaid interest (including Special Interest)
to the Redemption Date provided that the notice of redemption is mailed within
30 days following the closing of the corresponding Asset Disposition. Such
redemption shall occur upon not less than 30 nor more than 60 days' notice by
mail to each Holder of Securities to be redeemed at such Holder's address
appearing in the Security Register, in amounts of $1,000 or an integral multiple
of $1,000. Interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Regular Record Dates referred to on the face hereof.
The Securities are further subject to redemption at any time or from
time to time, prior to December 1, 1999, in an amount up to 331/3% in aggregate
principal amount of Securities originally issued under the Indenture, at the
option of the Company, from the net proceeds of one or more Public Offerings of
Capital Stock (other than Redeemable Interests) of Allied Parent, at a
Redemption Price equal to 110.25% of the principal amount thereof, together with
accrued but unpaid interest (including Special Interest) to the Redemption Date,
provided that the notice of redemption with respect to any such redemption is
mailed within 30 days following the closing of the corresponding Public
Offering. Such redemption shall occur upon not less than 30 nor more than 60
days notice by mail to each Holder of Securities to be redeemed at such Holder's
address appearing in the Security Register, in amounts of $1,000 or an integral
multiple of $1,000. Interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Regular Record Dates referred to on the face hereof.
The Securities are further subject to a Special Mandatory Redemption
at 100.5% of the principal amount of the Securities, together with accrued but
unpaid interest (including Special Interest) to the Redemption Date, in the
event (a) the Company has concluded, in its sole judgment, that the Acquisition
will not be consummated on or prior to March 5, 1997, as certified to the
Trustee pursuant to the requirements of the Collateral Agreement or (b) for any
other reason, funds are not released from the Collateral Account pursuant to
Section 4.2 of the Collateral Agreement for purposes of funding the Acquisition.
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The Securities do not have the benefit of any sinking fund
obligations.
The Indenture provides that, subject to certain conditions, if (i)
certain Net Available Proceeds are available to the Company as a result of Asset
Dispositions or (ii) a Change of Control occurs, the Company shall be required
to make an Offer to Purchase for all or a specified portion of the Securities.
In the event of redemption or purchase pursuant to an Offer to
Purchase of this Security in part only, a new Security or Securities of like
tenor for the unredeemed or unpurchased portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal
of all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (i)
the entire indebtedness of this Security or (ii) certain restrictive covenants
and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth therein.
As provided in the Indenture and subject to certain limitations
therein set forth, the obligations of the Company under the Indenture and this
Security are Guaranteed, jointly and severally on a senior subordinated basis,
pursuant to Senior Subordinated Guarantees endorsed hereon as provided in the
Indenture. Each Holder, by holding this Security, agrees to all of the terms and
provisions of said Senior Subordinated Guarantees. The Indenture provides that a
Guarantor shall be released from its Senior Subordinated Guarantee upon
compliance with certain conditions.
The Securities and the Senior Subordinated Guarantees shall be
subordinated in right of payment to Senior Debt of the Company and the
Guarantors, respectively, as provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the Guarantors and the rights of the Holders of the Securities under
the Indenture at any time by the Company, the Guarantors and the Trustee with
the consent of the Holders of a majority in aggregate principal amount of the
Securities at the time
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Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in principal amount of the
Securities at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities at the
time Outstanding a direction inconsistent with such request and shall have
failed to institute any such proceeding for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to certain
suits described in the Indenture, including any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed herein
(or, in the case of redemption, on or after the Redemption Date or, in the case
of any purchase of this Security required to be made pursuant to an Offer to
Purchase, on the Purchase Date).
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate, and
in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at
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the office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Guarantors, the Trustee and any agent of the Company,
the Guarantors or the Trustee may treat the Person in whose name this Security
is registered as the owner hereof for all purposes, whether or not this Security
be overdue, and neither the Company, any Guarantor, the Trustee nor any such
agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Indenture, this Security and the Senior Subordinated Guarantees
endorsed hereon shall be governed by and construed in accordance with the laws
of the State of New York.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its entirety
by the Company pursuant to Section 1014 or 1015 of the Indenture, check the box:
/ /
If you want to elect to have only a part of this Security purchased
by the Company pursuant to Section 1014 or 1015 of the Indenture, state the
amount: $___________
Dated:______________ Your Signature:____________________________________
(Sign exactly as name
appears on the other
side of this Security)
Signature Guarantee:____________________________________________________________
Notice: Signature(s) must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the
Trustee, which requirements will include membership or
participation in STAMP or such other "signature
guarantee program" as may be determined by the Trustee
in addition to, or in substitution for STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended.
SECTION 204. Form of Trustee's Certificate of
Authentication.
This is one of the Securities with the Senior Subordinated
Guarantees referred to in the within-mentioned Indenture.
___________________________,
as Trustee
By ___________________________
Authorized Signature
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SECTION 205. Form of Senior Subordinated Guarantee.
SENIOR SUBORDINATED GUARANTEE
For value received, each of the Guarantors named (or deemed herein
to be named) below hereby jointly and severally unconditionally guarantees, on a
senior subordinated basis to the Holder of the Security upon which this Senior
Subordinated Guarantee is endorsed, and to the Trustee on behalf of such Holder,
the due and punctual payment of the principal of (and premium, if any) and
interest on such Security when and as the same shall become due and payable,
whether at the Stated Maturity, by acceleration, call for redemption, purchase
or otherwise, according to the terms thereof and of the Indenture referred to
therein. In case of the failure of the Company punctually to make any such
payment, each of the Guarantors hereby jointly and severally agrees to cause
such payment to be made punctually when and as the same shall become due and
payable, whether at the Stated Maturity or by acceleration, call for redemption,
purchase or otherwise, and as if such payment were made by the Company.
The Senior Subordinated Guarantee of each Guarantor shall be
subordinated in right of payment to the Senior Debt of such Guarantor as
provided in the Indenture.
Each of the Guarantors hereby jointly and severally agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of such Security or the Indenture, the absence of
any action to enforce the same, any creation, exchange, release or
non-perfection of any Lien on any collateral for, or any release or amendment or
waiver of any term of any other Guarantee of, or any consent to departure from
any requirement of any other Guarantee of, all or of any of the Securities, the
election by the Trustee or any of the Holders in any proceeding under Chapter 11
of the Bankruptcy Code of the application of Section 1111(b)(2) of the
Bankruptcy Code, any borrowing or grant of a security interest by the Company,
as debtor-in-possession, under Section 364 of the Bankruptcy Code, the
disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of
the claims of the Trustee or any of the Holders for payment of any of the
Securities, any waiver or consent by the Holder of such Security or by the
Trustee or either of them with respect to any provisions thereof or of the
Indenture, the obtaining of any judgment against the Company (or, with respect
to the Allied Finance Guarantee, Allied Parent) or any action to enforce the
same or any other circumstances which might otherwise constitute a legal or
equitable
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<PAGE> 65
discharge or defense of a Guarantor. Each of the Guarantors hereby waives the
benefits of diligence, presentment, demand of payment, any requirement that the
Trustee or any of the Holders protect, secure, perfect or insure any security
interest in or other Lien on any property subject thereto or exhaust any right
or take any action against the Company (or, with respect to the Allied Finance
Guarantee, Allied Parent) or any other Person or any collateral, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company (or, with respect to the
Allied Finance Guarantee, Allied Parent), protest or notice with respect to such
Security or the indebtedness evidenced thereby and all demands whatsoever, and
covenants that this Senior Subordinated Guarantee will not be discharged except
by complete performance of the obligations contained in such Security and in
this Senior Subordinated Guarantee. Each of the Guarantors hereby agrees that,
in the event of a default in payment of principal (or premium, if any) or
interest on such Security, whether at their Stated Maturity, by acceleration,
call for redemption, purchase or otherwise, legal proceedings may be instituted
by the Trustee on behalf of, or by, the Holder of such Security, subject to the
terms and conditions set forth in the Indenture, directly against each of the
Guarantors to enforce this Senior Subordinated Guarantee without first
proceeding against the Company. Each Guarantor agrees that if, after the
occurrence and during the continuance of an Event of Default, the Trustee or any
of the Holders are prevented by applicable law from exercising their respective
rights to accelerate the maturity of the Securities, to collect interest on the
Securities, or to enforce or exercise any other right or remedy with respect to
the Securities (or with respect to the Allied Finance Guarantee, the Guarantee
of Allied Parent), such Guarantor agrees to pay to the Trustee for the account
of the Holders, upon demand therefor, the amount that would otherwise have been
due and payable had such rights and remedies been permitted to be exercised by
the Trustee or any of the Holders.
No reference herein to the Indenture and no provision of this Senior
Subordinated Guarantee or of the Indenture shall alter or impair the Senior
Subordinated Guarantee of any Guarantor, which is absolute and unconditional, of
the due and punctual payment of the principal (and premium, if any) and interest
on the Security upon which this Senior Subordinated Guarantee is endorsed.
Each Guarantor shall be subrogated to all rights of the Holder of
such Security against the Company (or, with respect to the Allied Finance
Guarantee, against Allied
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Parent) in respect of any amounts paid by such Guarantor on account of such
Security (or with respect to the Allied Finance Guarantee, on account of the
Guarantee of Allied Parent) pursuant to the provisions of its Senior
Subordinated Guarantee or the Indenture; provided, however, that such Guarantor
shall not be entitled to enforce or to receive any payments arising out of, or
based upon, such right of subrogation until the principal of (and premium, if
any) and interest on this Security and all other Securities issued under the
Indenture shall have been paid in full.
This Senior Subordinated Guarantee shall remain in full force and
effect and continue to be effective should any petition be filed by or against
the Company (or with respect to the Allied Finance Guarantee, Allied Parent) for
liquidation or reorganization, should the Company (or with respect to the Allied
Finance Guarantee, Allied Parent) become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of the Company's (or with respect to the Allied Finance
Guarantee, Allied Parent's) assets, and shall, to the fullest extent permitted
by law, continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Securities is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by any
obligee on the Securities (or with respect to the Allied Finance Guarantee, on
the Guarantee of Allied Parent), whether as a "voidable preference," "fraudulent
transfer" or otherwise, all as though such payment or performance had not been
made. In the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the Securities shall, to the fullest extent permitted by
law, be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under this Senior Subordinated Guarantee.
The Guarantors or any particular Guarantor shall be released from
this Senior Subordinated Guarantee upon the terms and subject to certain
conditions provided in the Indenture.
By delivery of a supplemental indenture to the Trustee in accordance
with the terms of the Indenture, each Person that becomes a Subsidiary Guarantor
after the date of the Indenture will be deemed to have executed and delivered
this Subsidiary Guarantee for the benefit of the Holder of
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the Security upon which this Subsidiary Guarantee is endorsed, with the same
effect as if such Subsidiary Guarantor was named below and had executed and
delivered this Subsidiary Guarantee.
All terms used in this Senior Subordinated Guarantee which are
defined in the Indenture referred to in the Security upon which this Senior
Subordinated Guarantee is endorsed shall have the meanings assigned to them in
such Indenture.
This Senior Subordinated Guarantee shall not be valid or obligatory
for any purpose until the certificate of authentication on the Security upon
which this Senior Subordinated Guarantee is endorsed shall have been executed by
the Trustee under the Indenture by manual signature.
Reference is made to Article Thirteen of the Indenture for further
provisions with respect to this Senior Subordinated Guarantee.
THIS SENIOR SUBORDINATED GUARANTEE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, each of the Guarantors has caused this Senior
Subordinated Guarantee to be duly executed.
Allied Waste Industries, Inc.,
As Guarantor
By: _________________________
[Officer]
Attest:
__________________________
[Secretary]
[Assistant Secretary]
Each of the Subsidiary Guarantors
Listed on Schedule I to the
Indenture,
As Guarantor
By:* _________________________
[Officer]
Attest:*
_________________________
[Secretary]
[Assistant Secretary]
- --------
* Signing as duly authorized officer for each such Subsidiary Guarantor.
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<PAGE> 69
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $525,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section 303,
304, 305, 306, 307, 906, 1109 or in connection with an Offer to Purchase
pursuant to Section 1014 or 1015. The Company may issue Exchange Securities from
time to time pursuant to an Exchange Offer, in each case pursuant to a Board
Resolution and subject to Section 303, in authorized denominations in exchange
for a like principal amount of Original Securities. Upon any such exchange the
Original Securities shall be cancelled in accordance with Section 310 and shall
no longer be deemed Outstanding for any purpose. In no event shall the aggregate
principal amount of Original Securities and Exchange Securities Outstanding
exceed $525,000,000.
The Securities shall be known and designated as the "10 1/4% Senior
Subordinated Notes Due 2006" of the Company. Their Stated Maturity shall be
December 1, 2006 and they shall bear interest at the rate of 10.25% per annum
(the "Base Interest"), from December 5, 1996 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, as the case
may be, payable semi-annually on June 1 and December 1, commencing June 1, 1997,
until the principal thereof is paid or made available for payment; provided,
however, with respect to Original Securities, that if a Registration Default
occurs, as liquidated damages for such Registration Default, Special Interest,
in addition to the Base Interest, shall accrue during the Registration Default
Period for such Registration Default at a per annum rate of 0.25% for the first
90 days of such Registration Default Period, at a per annum rate of 0.50% for
the second 90 days of such Registration Default Period, at a per annum rate of
0.75% for the third 90 days of such Registration Default Period and at a per
annum rate of 1.0% thereafter for the remaining portion of such Registration
Default Period. The Company shall provide written notice to the Trustee of any
Registration Default and of the end of the Registration Default Period for such
Registration Default. Accrued Special Interest, if any, shall be paid in cash in
arrears semi-annually on June 1 and December 1 in each year.
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The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Company in the
Borough of Manhattan, The City of New York, New York, maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register; provided further
that all payments of the principal (and premium, if any) and interest on
Securities, the Holders of which have given wire transfer instructions to the
Company or its agent at least 10 Business Days prior to the applicable payment
date will be required to be made by wire transfer of immediately available funds
to the accounts specified by such Holders in such instructions.
The Securities shall be subject to redemption as provided in Article
Eleven.
The Securities shall be subject to repurchase by the Company
pursuant to an Offer to Purchase as provided in Sections 1014 and 1015.
The Securities shall not have the benefit of any sinking fund
obligations.
The Securities shall be subject to defeasance at the option of the
Company as provided in Article Twelve.
The Securities shall be Guaranteed by the Guarantors as provided in
Article Thirteen.
The Securities and each of the Senior Subordinated Guarantees shall
be subordinated in right of payment to Senior Debt of the Company and each of
the Guarantors, respectively, as provided in Article Fourteen.
Unless the context otherwise requires, the Original Securities and
the Exchange Securities shall constitute one series for all purposes under the
Indenture, including with respect to any amendment, waiver, acceleration or
other Act of Holders, redemption or Offer to Purchase.
SECTION 302. Denominations.
The Securities shall be issuable only in registered form without
coupons, and only in denominations of $1,000 and, any integral multiple thereof.
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SECTION 303. Execution, Authentication, Delivery
and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, Chief Executive Officer,
its President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company
and having endorsed (by attachment or imprint) thereon the Senior Subordinated
Guarantees executed as provided in Section 1302 by the Guarantors to the Trustee
for authentication, together with a Company Order for the authentication and
delivery of such Securities with such Senior Subordinated Guarantees endorsed
thereon; and the Trustee in accordance with such Company Order shall
authenticate and deliver such Securities with such Senior Subordinated
Guarantees endorsed thereon as in this Indenture provided and not otherwise.
At any time and from time to time after the execution and delivery
of this Indenture and after the effectiveness of a registration statement under
the Securities Act with respect thereto, the Company may deliver Exchange
Securities executed by the Company, and having endorsed thereon the Senior
Subordinated Guarantees executed under Section 1302 by the Guarantors, to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Exchange Securities and a like principal amount of Original
Securities for cancellation in accordance with Section 310 of this Indenture,
and the Trustee in accordance with the Company Order shall authenticate and
deliver such Securities, with the Senior Subordinated Guarantees endorsed
thereon. Prior to authenticating such Exchange Securities, and accepting any
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, if requested, and (subject to Section
601) shall be
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fully protected in relying upon, an Opinion of Counsel stating in substance
(a) that all conditions hereunder precedent to the authentication
and delivery of such Exchange Securities with the Senior Subordinated
Guarantees of the Guarantors endorsed thereon have been complied with and
that such Exchange Securities and the Senior Subordinated Guarantees of
the Guarantors endorsed thereon, when such Securities have been duly
authenticated and delivered by the Trustee (and subject to any other
conditions specified in such Opinion of Counsel), have been duly issued
and delivered and will constitute valid and legally binding obligations of
the Company and the Guarantors, respectively, enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and
(b) that the issuance of the Exchange Securities in exchange for
Original Securities has been effected in compliance with the Securities
Act.
Each Security shall be dated the date of its authentication.
No Security or Senior Subordinated Guarantee endorsed thereon shall
be entitled to any benefit under this Indenture or be valid or obligatory for
any purpose unless there appears on such Security a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder and that each Senior Subordinated
Guarantee endorsed thereon has been duly endorsed thereon and delivered
hereunder.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities and Senior
Subordinated Guarantees, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities with temporary
Senior Subordinated Guarantees endorsed thereon, which Securities and Senior
Subordinated Guarantees are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities and Senior
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Subordinated Guarantees, respectively, in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities and Senior Subordinated Guarantees may
determine, as evidenced by their execution thereof.
If temporary Securities are issued, the Company will cause
definitive Securities and Senior Subordinated Guarantees to be prepared without
unreasonable delay. After the preparation of definitive Securities and Senior
Subordinated Guarantees, the temporary Securities shall be exchangeable for
definitive Securities with definitive Senior Subordinated Guarantees endorsed
thereon, upon surrender of the temporary Securities at any office or agency of
the Company designated pursuant to Section 1002, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of authorized
denominations having endorsed thereon definitive Senior Subordinated Guarantees
executed by the Guarantors. Until so exchanged the temporary Securities and
Senior Subordinated Guarantees shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities and Senior Subordinated
Guarantees, respectively.
SECTION 305. Global Securities.
(a) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary (A) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be a clearing agency registered as such under the Exchange Act,
and in either case the Company fails to appoint a successor Depositary, (ii) the
Company executes and delivers to the Trustee a Company Order stating that it
elects to cause the issuance of the Securities in certificated form and that all
Global Securities shall be
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exchanged in whole for Securities that are not Global Securities (in which case
such exchange shall be effected by the Trustee) or (iii) there shall have
occurred and be continuing an Event of Default with respect to such Global
Security.
(c) If any Global Security is to be exchanged for other Securities
or cancelled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee to the Trustee, as Security Registrar, for exchange or
cancellation as provided in this Article Three. If any Global Security is to be
exchanged for other Securities or cancelled in part, or if another Security is
to be exchanged in whole or in part for a beneficial interest in any Global
Security, then either (i) such Global Security shall be so surrendered for
exchange or cancellation as provided in this Article Three or (ii) the principal
amount thereof shall be reduced or increased by an amount equal to the portion
thereof to be so exchanged or cancelled, or equal to the principal amount of
such other Security to be so exchanged for a beneficial interest therein, as the
case may be, by means of an appropriate adjustment made on the records of the
Trustee, as Security Registrar, whereupon the Trustee, in accordance with the
Applicable Procedures, shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Security, the Trustee shall, subject to
Section 306(c) and as otherwise provided in this Article Three, authenticate and
deliver any Securities issuable in exchange for such Global Security (or any
portion thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request
of the Trustee in connection with the occurrence of any of the events specified
in the preceding paragraph, the Company shall promptly make available to the
Trustee a reasonable supply of Securities that are not in the form of Global
Securities. The Trustee shall be entitled to rely upon any order, direction or
request of the Depositary or its authorized representative which is given or
made pursuant to this Article Three if such order, direction or request is given
or made in accordance with the Applicable Procedures.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article Three or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Security,
unless such Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.
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(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
Indenture, the Securities and the Senior Subordinated Guarantees, and owners of
beneficial interests in a Global Security shall hold such interests pursuant to
the Applicable Procedures. Accordingly, any such owner's beneficial interest in
a Global Security will be shown only on, and the transfer of such interest shall
be effected only through, records maintained by the Depositary or its nominee or
its Agent Members.
SECTION 306. Registration, Registration of Transfer and
Exchange Generally; Restrictions on Transfer
and Exchange; Securities Act Legends.
(a) Registration, Registration of Transfer and Exchange Generally.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee
a register (the register maintained in such office and in any other office or
agency of the Company designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers and exchanges of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers and exchanges of Securities as herein provided. Such
Security Register shall distinguish between Original Securities and Exchange
Securities.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations, of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture, each such new Security having endorsed thereon the Senior
Subordinated Guarantee executed by each Guarantor.
At the option of the Holder, and subject to the other provisions of
this Section 306, Securities may be exchanged for other Securities of any
authorized denominations, of a like aggregate principal amount, each such new
Security having endorsed thereon the Senior Subordinated Guarantee executed by
each Guarantor, upon surrender of the Securities to be exchanged at any such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate
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and deliver, the Securities which the Holder making the exchange is entitled to
receive.
All Securities and the Senior Subordinated Guarantees endorsed
thereon issued upon any registration of transfer or exchange of Securities shall
be the valid obligations of the Company and the respective Guarantors,
evidencing the same debt, and (except for the differences between Original
Securities and Exchange Securities provided for herein) entitled to the same
benefits under this Indenture, as the Securities and Senior Subordinated
Guarantees endorsed thereon, respectively, surrendered upon such registration of
transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Security Registrar)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 303, 304, 305, 306, 906, 1014, 1015 or 1109 not
involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 1105 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Indenture or the Securities, transfers and exchanges of
Securities and beneficial interests in a Global Security of the kinds specified
in this Section 306(b) shall be made only in accordance with this Section
306(b).
(i) Restricted Global Security to Regulation S Global Security.
If the owner of a beneficial interest in the Restricted Global Security
wishes at any time to transfer such interest to a Person who wishes to
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acquire the same in the form of a beneficial interest in the Regulation S
Global Security, such transfer may be effected only in accordance with the
provisions of this Clause (b)(i) and Clause (b)(vii) below and subject to
the Applicable Procedures. Upon receipt by the Trustee, as Security
Registrar, of (A) an order given by the Depositary or its authorized
representative directing that a beneficial interest in the Regulation S
Global Security in a specified principal amount be credited to a specified
Agent Member's account and that a beneficial interest in the Restricted
Global Security in an equal principal amount be debited from another
specified Agent Member's account and (B) a Regulation S Certificate,
satisfactory to the Trustee and duly executed by the owner of such
beneficial interest in the Restricted Global Security or his attorney duly
authorized in writing, then the Trustee, as Security Registrar but subject
to Clause (b)(vii) below, shall reduce the principal amount of the
Restricted Global Security and increase the principal amount of the
Regulation S Global Security by such specified principal amount as
provided in Section 305(c).
(ii) Regulation S Global Security to Restricted Global Security.
If the owner of a beneficial interest in the Regulation S Global Security
wishes at any time to transfer such interest to a Person who wishes to
acquire the same in the form of a beneficial interest in the Restricted
Global Security, such transfer may be effected only in accordance with
this Clause (b)(ii) and subject to the Applicable Procedures. Upon receipt
by the Trustee, as Security Registrar, of (A) an order given by the
Depositary or its authorized representative directing that a beneficial
interest in the Restricted Global Security in a specified principal amount
be credited to a specified Agent Member's account and that a beneficial
interest in the Regulation S Global Security in an equal principal amount
be debited from another specified Agent Member's account and (B) if such
transfer is to occur during the Restricted Period, a Restricted Securities
Certificate, satisfactory to the Trustee and duly executed by the owner of
such beneficial interest in the Regulation S Global Security or his
attorney duly authorized in writing, then the Trustee, as Security
Registrar, shall reduce the principal amount of the Regulation S Global
Security and increase the principal amount of the Restricted Global
Security by such specified principal amount as provided in Section 305(c).
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(iii) Restricted Non-Global Security to Restricted Global Security
or Regulation S Global Security. If the Holder of a Restricted Security
(other than a Global Security) wishes at any time to transfer all or any
portion of such Security to a Person who wishes to take delivery thereof
in the form of a beneficial interest in the Restricted Global Security or
the Regulation S Global Security, such transfer may be effected only in
accordance with the provisions of this Clause (b)(iii) and Clause (b)(vii)
below and subject to the Applicable Procedures. Upon receipt by the
Trustee, as Security Registrar, of (A) such Restricted Security as
provided in Section 306(a) and instructions satisfactory to the Trustee
directing that a beneficial interest in the Restricted Global Security or
Regulation S Global Security in a specified principal amount not greater
than the principal amount of such Security be credited to a specified
Agent Member's account and (B) a Restricted Securities Certificate, if the
specified account is to be credited with a beneficial interest in the
Restricted Global Security, or a Regulation S Certificate, if the
specified account is to be credited with a beneficial interest in the
Regulation S Global Security, in either case satisfactory to the Trustee
and duly executed by such Holder or his attorney duly authorized in
writing, then the Trustee, as Security Registrar but subject to Clause
(b)(vii) below, shall cancel such Restricted Security (and issue a new
Restricted Security in respect of any untransferred portion thereof) as
provided in Section 306(a) and increase the principal amount of the
Restricted Global Security or the Regulation S Global Security, as the
case may be, by the specified principal amount as provided in Section
305(c).
(iv) Regulation S Non-Global Security to Restricted Global
Security or Regulation S Global Security. If the Holder of a Regulation S
Security (other than a Global Security) wishes at any time to transfer all
or any portion of such Restricted Security to a Person who wishes to take
delivery thereof in the form of a beneficial interest in the Restricted
Global Security or the Regulation S Global Security, such transfer may be
effected only in accordance with this Clause (b)(iv) and Clause (b)(vii)
below and subject to the Applicable Procedures. Upon receipt by the
Trustee, as Security Registrar, of (A) such Restricted Security as
provided in Section 306(a) and instructions satisfactory to the Trustee
directing that a beneficial interest in the Restricted Global Security or
Regula-
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tion S Global Security in a specified principal amount not greater than
the principal amount of such Security be credited to a specified Agent
Member's account and (B) if the transfer is to occur during the Restricted
Period and the specified account is to be credited with a beneficial
interest in the Restricted Global Security, a Restricted Securities
Certificate satisfactory to the Trustee and duly executed by such Holder
or his attorney duly authorized in writing, then the Trustee, as Security
Registrar but subject to Clause (b)(vii) below, shall cancel such
Restricted Security (and issue a new Restricted Security in respect of any
untransferred portion thereof) as provided in Section 306(a) and increase
the principal amount of the Restricted Global Security or the Regulation S
Global Security, as the case may be, by the specified principal amount as
provided in Section 305(c).
(v) Non-Global Security to Non-Global Security. A Security that
is not a Global Security may be transferred, in whole or in part, to a
Person who takes delivery in the form of another Security that is not a
Global Security as provided in Section 306(a), provided that, if the
Security to be transferred in whole or in part is a Restricted Security,
or is a Regulation S Security and the transfer is to occur during the
Restricted Period, then the Trustee shall have received (A) a Restricted
Securities Certificate, satisfactory to the Trustee and duly executed by
the transferor Holder or his attorney duly authorized in writing, in which
case the transferee Holder shall take delivery in the form of a Restricted
Security, or (B) a Regulation S Certificate, satisfactory to the Trustee
and duly executed by the transferor Holder or his attorney duly authorized
in writing, in which case the transferee Holder shall take delivery in the
form of a Regulation S Security (subject in every case to Section 306(c)).
(vi) Exchanges between Global Security and Non-Global Security.
A beneficial interest in a Global Security may be exchanged for a Security
that is not a Global Security as provided in Section 305, provided that,
if such interest is a beneficial interest in the Restricted Global
Security, or if such interest is a beneficial interest in the Regulation S
Global Security and such exchange is to occur during the Restricted
Period, then such interest shall be exchanged for a Restricted Security
(subject in each case to Section 306(c)). A Security that is not a Global
Security may be exchanged for a beneficial interest in
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a Global Security only if (A) such exchange occurs in connection with a
transfer effected in accordance with Clause (b)(iii) or (iv) above or (B)
such Security is a Regulation S Security and such exchange occurs after
the Restricted Period.
(vii) Regulation S Global Security to be Held Through Euroclear or
Cedel during Restricted Period. The Company shall use its best efforts to
cause the Depositary to ensure that, until the expiration of the
Restricted Period, beneficial interests in the Regulation S Global
Security may be held only in or through accounts maintained at the
Depositary by Euroclear or Cedel (or by Agent Members acting for the
account thereof), and no person shall be entitled to effect any transfer
or exchange that would result in any such interest being held otherwise
than in or through such an account; provided that this Clause (b)(vii)
shall not prohibit any transfer or exchange of such an interest in
accordance with Clause (b)(ii) or (vi) above.
(c) Securities Act Legends. Rule 144A Securities, IAI Securities and
their respective Successor Securities shall bear a Restricted Securities Legend,
and Regulation S Securities and their Successor Securities shall bear a
Regulation S Legend, subject to the following:
(i) subject to the following Clauses of this Section 306(c), a
Security or any portion thereof which is exchanged, upon transfer or
otherwise, for a Global Security or any portion thereof shall bear the
Securities Act Legend borne by such Global Security while represented
thereby;
(ii) subject to the following Clauses of this Section 306(c), a
new Security which is not a Global Security and is issued in exchange for
another Security (including a Global Security) or any portion thereof,
upon transfer or otherwise, shall bear the Securities Act Legend borne by
such other Security, provided that, if such new Security is required
pursuant to Section 306(b)(v) or (vi) to be issued in the form of a
Restricted Security, it shall bear a Restricted Securities Legend and, if
such new Security is so required to be issued in the form of a Regulation
S Security, it shall bear a Regulation S Legend;
(iii) Registered Securities shall not bear a Securities Act
Legend;
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(iv) at any time after the Securities may be freely transferred
without registration under the Securities Act or without being subject to
transfer restrictions pursuant to the Securities Act, a new Security which
does not bear a Securities Act Legend may be issued in exchange for or in
lieu of a Security (other than a Global Security) or any portion thereof
which bears such a legend if the Trustee has received an Unrestricted
Securities Certificate, satisfactory to the Trustee and duly executed by
the Holder of such legended Security or his attorney duly authorized in
writing, and after such date and receipt of such certificate, the Trustee
shall authenticate and deliver such a new Security in exchange for or in
lieu of such other Security as provided in this Article Three;
(v) a new Security which does not bear a Securities Act Legend
may be issued in exchange for or in lieu of a Security (other than a
Global Security) or any portion thereof which bears such a legend if, in
the Company's judgment, placing such a legend upon such new Security is
not necessary to ensure compliance with the registration requirements of
the Securities Act, and the Trustee, at the direction of the Company,
shall authenticate and deliver such a new Security as provided in this
Article Three; and
(vi) notwithstanding the foregoing provisions of this Section
306(c), a Successor Security of a Security that does not bear a particular
form of Securities Act Legend shall not bear such form of legend unless
the Company has reasonable cause to believe that such Successor Security
is a "restricted security" within the meaning of Rule 144, in which case
the Trustee, at the direction of the Company, shall authenticate and
deliver a new Security bearing a Restricted Securities Legend in exchange
for such Successor Security as provided in this Article Three.
SECTION 307. Mutilated, Destroyed, Lost and
Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount, having endorsed
thereon the Senior Subordinated Guarantees executed by the Guarantors and
bearing a number not contemporaneously outstanding.
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If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by either of them to save
each of them, each Guarantor and any agent of any of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, having endorsed thereon the Senior Subordinated Guarantees executed by
the Guarantors and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security, and each Senior Subordinated
Guarantee endorsed thereon, shall constitute an original additional contractual
obligation of the Company and the relevant Guarantor, respectively, whether or
not the mutilated, destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities and
Senior Subordinated Guarantees, respectively, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies of any Holder with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
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SECTION 308. Payment of Interest; Interest
Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to
the date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the
name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder of Securities at
such Holder's address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the
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Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 309. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Guarantors, the Trustee and any agent of the Company, any
Guarantor or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Section 308) interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Guarantors, the Trustee nor any agent of
the Company, any Guarantor or the Trustee shall be affected by notice to the
contrary.
SECTION 310. Cancellation.
All Securities surrendered for payment, redemption, repurchase
pursuant to any Offer to Purchase, registration of transfer or exchange shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee
and, together with the Senior Subordinated Guarantees endorsed thereon, shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall, together with the Senior Subordinated Guarantees endorsed
thereon, be promptly cancelled by the Trustee. No
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Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee, together with the
Senior Subordinated Guarantees endorsed thereon, shall be disposed of by the
Trustee and the Trustee will certify as to such disposal to the reasonable
satisfaction of the Company.
SECTION 311. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months provided, however, that any Special
Interest on Original Securities and any interest on overdue principal of (and
premium, if any) and interest on any Securities, shall be computed on the basis
of a 365-day or 366-day year, as the case may be, and the number of days
actually elapsed during the relevant Registration Default Period or the period
of default in the payment of such overdue principal (and premium, if any) or
interest.
Solely for purposes of disclosure under the Interest Act (Canada),
if and to the extent it may be applicable, and only for such purposes, when
interest under this Indenture is calculated using a rate based on a year of 360
days, such rate, when expressed as an annual rate, is equivalent to (x) the
applicable rate based on a year of 360 days, (y) multiplied by the actual number
of days in the calendar year in which the period for which such interest is
payable (or compounded) ends, and (z) divided by 360. Nothing contained in this
paragraph shall in any way affect the amount of interest payable hereunder or
the manner in which interest shall accrue or shall be payable hereunder.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
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(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 307 and
(ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust,
as provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds
in trust for the purpose an amount sufficient to pay and discharge
the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any)
and interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company and the Guarantors; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee
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under Section 607, the obligations of the Trustee to any Authenticating Agent
under Section 614 and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of Clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of any interest upon any Security when it
becomes due and payable, and continuance of such default for a period of
30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security at its Maturity (whether or not such payment is
prohibited by Article Fourteen); or
(3) failure to perform or comply with the provisions of Sections
801, 1014 and 1015; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company or any Guarantor in this Indenture (other than a
covenant or warranty a default in whose performance or whose breach is
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elsewhere in this Section specifically dealt with) or the Securities, and
continuance of such default or breach for a period of 60 days after there
has been given, in the manner provided in Section 106, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least
10% in principal amount of the Outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(5) a default or defaults under the terms of any bond(s),
debenture(s), note(s) or other evidence(s) of, or obligations
constituting, Debt by the Company, any Guarantor or any Restricted
Subsidiary, or under any mortgage(s), indenture(s), agreement(s) or
instrument(s) under which there may be issued or by which there may be
secured or evidenced, any Debt of the Company, any Guarantor or any
Restricted Subsidiary with a principal amount then outstanding,
individually or in the aggregate, in excess of $25 million, whether such
Debt now exists or is hereafter Incurred, which default or defaults
constitute a failure to pay any portion of the principal or similar amount
of such Debt when due and payable after the expiration of any applicable
grace period with respect thereto or will have resulted in such Debt
becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable; or
(6) a final judgment or final judgments (not subject to appeal) for
the payment of money are entered against the Company, Allied Parent,
Allied Finance or any Restricted Subsidiary in an aggregate amount in
excess of $25 million by a court or courts of competent jurisdiction,
which judgments remain unstayed, undischarged or unbonded for a period of
60 days after the entry of such Judgment or Judgments; or
(7) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of the Company, Allied Parent,
Allied Finance or any Restricted Subsidiary in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company, Allied Parent, Allied Finance or any Restricted Subsidiary a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company, Allied Parent, Allied Finance or any
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Restricted Subsidiary under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company, Allied Parent,
Allied Finance or any Restricted Subsidiary or of any substantial part of
the property of the Company, Allied Parent, Allied Finance or any
Restricted Subsidiary, or ordering the winding up or liquidation of the
affairs of the Company, Allied Parent, Allied Finance or any Restricted
Subsidiary, and the continuance of any such decree or order for relief or
any such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(8) the commencement by the Company, Allied Parent, Allied Finance
or any Restricted Subsidiary of a voluntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by the Company, Allied Parent,
Allied Finance or any Restricted Subsidiary to the entry of a decree or
order for relief in respect of the Company, Allied Parent, Allied Finance
or any Restricted Subsidiary in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company, Allied Parent, Allied Finance or
any Restricted Subsidiary or the filing by the Company, Allied Parent,
Allied Finance or any Restricted Subsidiary of a petition or answer or
consent seeking reorganization or relief under any applicable Federal or
State law, or the consent by the Company, Allied Parent, Allied Finance or
any Restricted Subsidiary to the filing of such a petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Company, Allied
Parent, Allied Finance or any Restricted Subsidiary or of any substantial
part of the property of the Company, Allied Parent, Allied Finance or any
Restricted Subsidiary, or the making by the Company, Allied Parent, Allied
Finance or any Restricted Subsidiary of an assignment for the benefit of
creditors, or the admission by the Company, Allied Parent, Allied Finance
or any Restricted Subsidiary in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the
Company, Allied Parent, Allied Finance or any Restricted Subsidiary in
furtherance of any such action.
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SECTION 502. Acceleration of Maturity; Rescission
and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 501(7) or (8)) occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal of all the Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such principal
and any accrued interest shall become immediately due and payable. If an Event
of Default specified in Section 501(7) or (8) occurs and is continuing, the
principal of and any accrued interest on the Securities then Outstanding shall
automatically, and without any declaration or other action on the part of the
Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of a
majority in principal amount of the Outstanding Securities, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company or any of the Guarantors has paid
or deposited with the Trustee a sum sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any, on) any Securities
which have become due otherwise than by such declaration of
acceleration (including any Securities required to have been
purchased on the Purchase Date pursuant to an Offer to Purchase made
by the Company) and any interest thereon at the rate borne by the
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate provided therefor in the
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
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and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for
a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof or, with respect to any
Security required to have been purchased pursuant to an Offer to Purchase
made by the Company, at the Purchase Date thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
principal (and premium, if any) and interest that is overdue, at the rate
provided therefor in the Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
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SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company, any
Guarantor or any other obligor upon the Securities or the property of the
Company or its creditors or of any Guarantor or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions, including participation as a member, voting or
otherwise, of any committee of creditors, authorized under the Trust Indenture
Act in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
Notwithstanding the foregoing, no provision of this Indenture shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, on behalf of such Holders,
vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors' or other such committee.
SECTION 505. Trustee May Enforce Claims
Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities or any Senior Subordinated Guarantee may be prosecuted and enforced
by the Trustee without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
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SECTION 506. Application of Money Collected.
Subject to Article Fourteen, any money collected by the Trustee
pursuant to this Article, the Collateral Agreement or the Credit Suisse Letter
of Credit, in each case shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal (or premium, if any) or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the
Trustee under Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal (and
premium, if any) and interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
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(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, but subject
to the provisions of Article Fourteen, the Holder of any Security shall have the
right, which is absolute and unconditional, to receive payment of the principal
of (and premium, if any) and (subject to Section 308) interest on such Security
on the respective Stated Maturities expressed in such Security (or, in the case
of redemption or repurchase, on the Redemption Date or the Purchase Date, as the
case may be) and to institute suit for the enforcement of any such payment, and
such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 307, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any
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other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security (including any Security which is required to have
been purchased pursuant to an Offer to Purchase made by the Company), or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended
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without the consent of the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company, any Guarantor, the
Trustee or any Holder, or group of Holders, holding in the aggregate at least
10% in principal amount of the Outstanding Securities or in any suit instituted
by any Holder for the enforcement of principal of (and premium, if any) or
interest on any Security on or after the respective Stated Maturities expressed
in such Security (or, in the case of redemption, on or after the Redemption Date
or, in the case of any purchase required to be made pursuant to an Offer to
Purchase, on or after the Purchase Date).
SECTION 515. Waiver of Stay, Usury or Extension Laws.
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay, usury
or extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and each of the
Company and the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
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ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided
by the Trust Indenture Act, and shall include taking such actions and exercising
such rights with respect to the Collateral (pursuant to the Collateral Agreement
and making such drawings under the Credit Suisse Letter of Credit as may be
necessary to protect and enforce the rights of the Holders under the Securities
and this Indenture and as otherwise required by the other provisions of this
Indenture. Notwithstanding the foregoing, no provision of this Indenture or the
Collateral Agreement shall require the Trustee to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder or thereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not herein or therein expressly so provided, every
provision of this Indenture and the Collateral Agreement relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder
as and to the extent provided by the Trust Indenture Act; provided, however,
that in the case of any default of the character specified in Section 501(4), no
such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness
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or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
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negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) Except with respect to Section 1001, the Trustee shall have no
duty to inquire as to the performance by the Company or any Guarantor of
the covenants set forth n Article Ten beyond its good faith review of any
certificates or other notices received by it from the Company or any
Guarantor.
SECTION 604. Not Responsible for Recitals
or Issuance of Securities.
The recitals contained herein and in the Securities and the Senior
Subordinated Guarantees endorsed thereon, except the Trustee's certificates of
authentication, shall be taken as the statements of the Company or the
Guarantors, as the case may be, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture, the Securities or the Senior Subordinated
Guarantees endorsed thereon. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, any Guarantor or the
Trustee, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal
with the Company, any Guarantor and any other obligor upon the Securities and
the Senior Subordinated Guarantees with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other agent.
SECTION 606. Money Held in Trust.
Subject to the requirements of the Collateral Agreement with respect
to the Collateral, money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company or any Guarantor, as the case may
be.
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SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder and under the Collateral
Agreement (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture and the Collateral Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this trust and the trust contemplated by the Collateral
Agreement, including the costs and expenses, of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such, has
a combined capital and surplus of at least $50 million and has its Corporate
Trust Office located in the Borough of Manhattan, The City of New York. If such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of its supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus
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of such Person shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal;
Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Securities, delivered to the
Trustee and the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for
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at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company, the Guarantors and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder. Upon request of any
such successor Trustee, the Company and the Guarantors shall execute any and all
instruments for more fully and certainly
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vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation
or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection
of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company, any Guarantor or any other obligor upon the Securities or any Senior
Subordinated Guarantee, the Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Company, any
Guarantor or any such other obligor.
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents which
shall be authorized to act on behalf of the Trustee to authenticate Securities
issued upon original issue and upon exchange, registration of transfer, partial
redemption or partial purchase or pursuant to Section 307, and Securities so
authenticated, and the Senior Subordinated Guarantees endorsed thereon, shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if such Securities had been authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
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authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50 million and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment first-class postage prepaid, to each Holder of Securities at
such Holder's address as it appears in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor
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hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section, the Securities
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
______________________________,
As Trustee
By___________________________,
As Authenticating Agent
By___________________________
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee
Names and Addresses of Holders.
The Company will furnish or cause to be furnished
to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
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(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information;
Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company, the Guarantors and the Trustee that neither the
Company, the Guarantors nor the Trustee nor any agent of any of them shall be
held accountable by reason of any disclosure of information as to names and
addresses of Holders made pursuant to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
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SECTION 704. Reports by Company and Guarantors.
The Company and each of the Guarantors shall file with the Trustee
and the Commission, and transmit to Holders, such information, documents and
other reports, and such summaries thereof, as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant to such
Act; provided that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 shall be filed with the Trustee within 15 days after the
same is so required to be filed with the Commission.
SECTION 705. Officers' Certificate with Respect to Change
in Interest Rates.
Within five days after the day on which any Special Interest begins
accruing, and within five days after any Special Interest ceases to accrue, the
Company shall deliver an Officers' Certificate to the Trustee stating the
interest rate thereupon in effect for the Unregistered Securities (if any are
Outstanding) and the date on which such rate became effective.
ARTICLE EIGHT
Merger, Consolidation, Etc.
SECTION 801. Mergers, Consolidations and Certain
Transfers, Leases and Acquisitions of Assets.
The Company (a) shall not, and shall not permit any Restricted
Subsidiary to, consolidate with or merge into any Person, in the case of a
Restricted Subsidiary, in a transaction in which such Restricted Subsidiary
remains a Restricted Subsidiary, unless such Restricted Subsidiary consolidates
with or merges into a Wholly Owned Restricted Subsidiary; (b) shall not permit
any Person other than a Wholly Owned Restricted Subsidiary to consolidate with
or merge into (i) the Company or (ii) any Restricted Subsidiary in a transaction
in which such Restricted Subsidiary remains a Restricted Subsidiary; (c) shall
not, directly or indirectly, in one or a series of transactions, transfer,
convey, sell, lease or otherwise dispose of all or substantially all of the
properties and assets of the Company and its Subsidiaries on a consolidated
basis; and (d) shall not, and shall not permit any Restricted Subsidiary to, in
one or a series of transactions, (i) acquire Capital Stock of or other ownership
interests in any other Person such that such
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other Person becomes a Restricted Subsidiary (excluding the Acquisition and
other transactions with an aggregate purchase price of not more than $50 million
with respect to the consummation of which, as of the date of this Indenture, the
Company has entered into a letter of intent, option or other contract) or (ii)
directly or indirectly, purchase, lease or otherwise acquire all or
substantially all of the properties and assets of any Person or any existing
business (whether existing as a separate entity, subsidiary, division, unit or
otherwise) of any Person (excluding the Acquisition and other transactions with
an aggregate purchase price of not more than $50 million with respect to the
consummation of which, as of the date of this Indenture, the Company has entered
into a letter of intent, option or other contract); unless, in any such
transaction (or series) contemplated by Clause (a), (b), (c) or (d) above:
(1) immediately before and after giving effect to such transaction
(or series) and treating any Debt Incurred by the Company or a Subsidiary
of the Company as a result of such transaction (or series) as having been
Incurred by the Company or such Subsidiary at the time of such transaction
(or series), no Event of Default, and no event which, after notice or
lapse of time, or both, would become an Event of Default, shall have
occurred and be continuing;
(2) in case the Company shall consolidate with or merge into another
Person or shall directly or indirectly, in one or a series of
transactions, transfer, convey, sell, lease or otherwise dispose of all or
substantially all of its properties and assets as an entirety, the Person
formed by such consolidation or into which the Company is merged or the
Person which acquires by transfer, conveyance, sale, lease or other
disposition all or substantially all of the properties and assets of the
Company and its Subsidiaries on a consolidated basis (for purposes of this
Article Eight, a "Successor Company") shall be a corporation, partnership,
limited liability company or trust, shall be organized and validly
existing under the laws of the United States of America, any State thereof
or the District of Columbia and shall expressly assume by an indenture
supplemental hereto executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal
of (and premium, if any) and interest on all the Securities and the
performance of every covenant of this Indenture on the part of the Company
to be performed or observed;
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(3) immediately after giving effect to such transaction (or series),
the Consolidated Net Worth of the Company or, if applicable, the Successor
Company shall be equal to or greater than 90% of the Consolidated Net
Worth of the Company immediately prior to such transaction (or series);
(4) either (x) the Company or, if applicable, the Successor Company
would, at the time of such transaction (or series) and after giving pro
forma effect thereto as if such transaction (or series) had occurred at
the beginning of the most recently ended four full fiscal quarter period
for which internal financial statements are available immediately
preceding the date of such transaction (or series), have been permitted to
Incur at least $1.00 of additional Debt pursuant to the Consolidated
EBITDA Coverage Ratio test set forth in the first paragraph of Section
1008 or (y) the Consolidated EBITDA Coverage Ratio of the Company or, if
applicable, the Successor Company for the most recently ended four full
fiscal quarter period for which internal financial statements are
available immediately preceding consummation of such transaction (or
series) calculated on a pro forma basis as if such transaction (or series)
had occurred at the beginning of such four full fiscal quarter period,
would be no less than such Consolidated EBITDA Coverage Ratio, calculated
without giving effect to such transaction or series or any other
transactions (or series) that is subject to the provisions of this Section
and that occurred after the later of the Acquisition Closing and the date
that is twelve months before the date of such transaction (or series);
(5) if, as a result of any such transaction (or series), property
and assets of the Company or any Restricted Subsidiary of the Company
would become subject to a Lien which would not be permitted by Section
1012, the Company or, if applicable, the Successor Company, as the case
may be, will have taken such steps as necessary effectively to secure the
Securities equally and ratably with (or prior to, as provided in Section
1012) Debt secured by such Lien; and
(6) unless such transaction (or series) is referred to in Clause
(b)(ii) or Clause (d) above and involves an aggregate purchase price of
less than $50 million, the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
transaction (or series) and, if a
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supplemental indenture is required in connection with such transaction (or
series), such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction (or
series) have been complied with, and, with respect to such Officers'
Certificate, setting forth in reasonable detail the calculations referred
to in Clauses (3) and (4) above.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any transfer, conveyance, sale, lease or other
disposition of all or substantially all of the properties and assets of the
Company and its Subsidiaries on a consolidated basis, in each case in accordance
with Section 801, the Successor Company shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such Successor Company had been named as the Company
herein, and thereafter, except in the case of a lease, the predecessor Person
shall be relieved of all obligations and covenants under this Indenture and the
Securities.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures
Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution of the Company, the Guarantors, when authorized by respective
Board Resolutions of the Guarantors, and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
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(3) to secure the Securities pursuant to the requirements of Section
1012 or otherwise; or
(4) to comply with any requirements of the Commission in order to
effect qualification of this Indenture under the Trust Indenture Act in
connection with the issuance of the Exchange Securities and thereafter
maintain the qualification of this Indenture under the Trust Indenture
Act; or
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions
of this Indenture, provided that such action pursuant to this Clause (5)
shall not adversely affect the interests of the Holders in any material
respect; or
(6) to add new Subsidiary Guarantors pursuant to Section 1305; or
(7) to add to, change or eliminate any of the provisions of this
Indenture to permit or facilitate the issuance of Global Securities and
matters related thereto, provided that such action pursuant to this Clause
(7) shall not adversely affect the interests of the Holders in any
material respect.
SECTION 902. Supplemental Indentures
with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution of the Company, the Guarantors, when authorized by the respective
Board Resolutions of the Guarantors, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
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redemption thereof, or change the place of payment where, or the coin or
currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date or, in the case of an Offer to
Purchase which has been made, on or after the applicable Purchase Date),
or
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section , Section 513 or
Section 1021 except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, or
(4) modify any of the provisions of Article Fourteen of this
Indenture in a manner adverse to the Holders, or
(5) modify Sections 1014 and 1015 of this Indenture in a manner
adverse to the Holders thereof in any material respect, or
(6) following the mailing to a Holder of an Offer Document with
respect to an Offer to Purchase, modify the provisions of this Indenture
with respect to such Offer to Purchase in a manner adverse to such Holder
in any material respect.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in
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relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
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SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company or any Guarantor
in respect of the Securities, the Senior Subordinated Guarantees and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company and each Guarantor hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
SECTION 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of (and premium, if any) or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of (and premium, if any) or interest on
any Securities, deposit with a Paying Agent a sum sufficient to pay such amount,
such sum to be held as provided by the Trust Indenture Act,
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and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section , that
such Paying Agent will (i) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent (or, until such time as this Indenture shall
be qualified under the Trust Indenture Act, which would be applicable to it as
Paying Agent if the Indenture were so qualified) and (ii) during the continuance
of any default by the Company (or any other obligor upon the Securities) in the
making of any payment in respect of the Securities, upon the written request of
the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Subject to any applicable abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest on
any Security and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the
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date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 1004. Existence.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors of the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 1005. Maintenance of Properties.
The Company will cause substantially all properties used or useful
in the conduct of its business or the business of any Restricted Subsidiary to
be maintained and kept in good working order reasonable wear and tear excepted
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
including, without limitation, maintaining and operating its solid waste
landfills in substantial compliance with applicable federal, state, provincial
and local regulations, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company or any Restricted Subsidiary from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Restricted Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged
(1) all taxes, assessments and governmental charges levied or imposed upon the
Company or any of its Subsidiaries or upon the income, profits or property of
the Company or any of its Subsidiaries, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any of its Restricted Subsidiaries; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or
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discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
SECTION 1007. Maintenance of Insurance.
The Company shall, and the Company shall cause its Restricted
Subsidiaries to, keep at all times all of their properties which are of an
insurable nature insured against loss or damage, to provide required financial
assurances to governmental agencies under applicable environmental regulations
relating to its landfill and collection operations and to maintain liability
insurance, with insurers believed by the Company to be responsible, in each case
to the extent, in the judgment of the Company, to do so comports with good
business practice.
SECTION 1008. Limitation on Consolidated Debt.
The Company shall not Incur any Debt and shall not permit Restricted
Subsidiaries to Incur any Debt or issue Preferred Stock unless, immediately
after giving effect to the Incurrence of such Debt or issuance of such Preferred
Stock and the receipt and application of the proceeds thereof, the Consolidated
EBITDA Coverage Ratio of the Company for the four full fiscal quarters next
preceding the Incurrence of such Debt or issuance of such Preferred Stock,
calculated on a pro forma basis as if such Debt had been Incurred or such
Preferred Stock had been issued and the proceeds thereof had been received and
so applied at the beginning of the four full fiscal quarters, would be greater
than 2.0 to 1.0 if such Incurrence is on or prior to December 31, 1999 and 2.25
to 1.0 if thereafter.
Without regard to the foregoing limitations, the Company or any
Restricted Subsidiary of the Company may Incur the following Debt:
(i) Debt under the Bank Agreement in an aggregate principal amount
at any one time outstanding not to exceed the Bank Facility Limit then in
effect;
(ii) Debt evidenced by the Securities;
(iii) Debt evidenced by the Allied Canada Debentures;
(iv) Debt owed by the Company to any Restricted Subsidiary or Debt
owed by a Restricted Subsidiary to the Company or to a Restricted
Subsidiary; provided, however, that in the event that either (x) the
Company
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or the Restricted Subsidiary to which such Debt is owed transfers or
otherwise disposes of such Debt to a Person other than the Company or
another Restricted Subsidiary or (y) such Restricted Subsidiary ceases to
be a Restricted Subsidiary, the provisions of this Clause (iv) shall no
longer be applicable to such Debt and such Debt shall be deemed to have
been Incurred at the time of such transfer or other disposition or at the
time such Restricted Subsidiary ceases to be a Restricted Subsidiary;
(v) Debt outstanding on the date of this Indenture;
(vi) Debt Incurred in connection with an acquisition, merger or
consolidation transaction permitted under Article Eight of this Indenture,
which Debt (A) was issued by a Person prior to the time such Person
becomes a Restricted Subsidiary in such transaction (including by way of
merger or consolidation with the Company or another Restricted Subsidiary)
and was not issued in contemplation of such transaction or (B) is issued
by the Company or a Restricted Subsidiary to a seller in connection with
such transaction, in an amount in aggregate for all such Debt issued
pursuant to this Clause (vi) not to exceed $50 million at any one time
outstanding;
(vii) Debt consisting of Permitted Interest Rate or Currency
Protection Agreements;
(viii) Debt Incurred to renew, extend, refund or otherwise refinance any
Debt of the Company permitted in Clauses (i) through (vi) above; provided,
however, that in each case the principal amount of the Debt so Incurred
does not exceed the principal amount of the Debt so renewed, extended,
refunded or otherwise refinanced thereby; provided further, that Debt the
proceeds of which are used to refinance or refund Debt which is pari passu
to the Securities or Debt which is subordinate in right of payment to the
Securities shall only be permitted if (A) in the case of any refinancing
or refunding of Debt which is pari passu to the Securities, the
refinancing or refunding Debt is made pari passu to the Securities or
subordinate in right of payment to the Securities and, in the case of any
refinancing or refunding of Debt which is subordinate in right of payment
to the Securities, the refinancing or refunding Debt is made subordinate
in right of payment to the Securities to substantially the same extent as
or a greater extent than the Securities are
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subordinated to Senior Debt of the Company pursuant to the provisions of
Article Fourteen and (B) such refinancing or refunding Debt (x) does not
have a final Stated Maturity earlier than the final Stated Maturity of the
refinanced Debt or permit redemption or other retirement of such Debt
(including pursuant to an offer to purchase by the Company) at the option
of the holder thereof prior to the final Stated Maturity of the Debt being
refinanced or refunded, other than a redemption or other retirement at the
option of the holder of such Debt on terms and in circumstances that are
substantially similar to those on and in which the Debt being refinanced
may be redeemed or otherwise retired and (y) does not have a Weighted
Average Life less than the Weighted Average Life of the Debt being
refinanced; and
(ix) Debt not otherwise permitted to be Incurred pursuant to Clauses
(i) through (viii) above, which in aggregate amount, together with the
aggregate amount of all other Debt previously Incurred pursuant to this
Clause (ix) and then outstanding, does not exceed 5% of the Consolidated
Total Assets of the Company at the time of such Incurrence.
Notwithstanding the foregoing, the Company shall not permit Allied
Insurance to Incur any Debt other than reimbursement obligations with respect to
letters of credit and other financial assurance obligations issued to enable
Allied Insurance to issue insurance policies for the benefit of the Company and
its Restricted Subsidiaries.
SECTION 1009. Limitation on Layered and Junior Debt.
So long as any of the Securities are Outstanding, (i) the Company
shall not Incur or suffer to exist any Debt that is by its terms subordinate in
right of payment to any other Debt of the Company unless such Debt is also pari
passu with, or subordinate by its terms in right of payment to, the Securities
and (ii) Allied Parent shall not, and the Company shall not permit any
Subsidiary Guarantor to, Incur or suffer to exist any Debt that is by its terms
subordinate in right of payment to any other Debt of Allied Parent or the
Subsidiary Guarantor, as the case may be, unless such Debt is also pari passu
with or subordinate by its terms in right of payment to the Senior Subordinated
Guarantees of Allied Parent or the Subsidiary Guarantor, as the case may be.
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SECTION 1010. Limitation on Restricted Payments.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, (i) declare or pay any dividend, or make
any distribution, of any kind or character (whether in cash, property or
securities) in respect of any class of its Capital Stock or to the holders of
any class of its Capital Stock (excluding any dividends or distributions (u) to
the extent payable in shares of the Capital Stock of the Company (other than
Redeemable Interests) or in options, warrants or other rights to acquire the
Capital Stock of the Company (other than Redeemable Interests), (v) dividends or
distributions by a Restricted Subsidiary to the Company or another Wholly Owned
Restricted Subsidiary and (w) the payment of pro rata dividends by a Restricted
Subsidiary to holders of both minority and majority interests in such Restricted
Subsidiary); (ii) purchase, redeem or otherwise acquire or retire for value (a)
any Capital Stock of the Company or any Capital Stock of or other ownership
interests in any Subsidiary or any Affiliate or Related Person of the Company or
(b) any options, warrants or other rights to purchase or acquire, or any
securities convertible or exchangeable into, shares of Capital Stock of the
Company or any Capital Stock of or other ownership interests in any Subsidiary
or any Affiliate or Related Person of the Company (excluding, in each case of
(a) and (b), the purchase redemption or other acquisition or retirement by any
Restricted Subsidiary of any of its Capital Stock, other ownership interests or
options, warrants or rights to purchase such Capital Stock or other ownership
interests, in each case, owned by the Company or a Wholly Owned Restricted
Subsidiary); (iii) make, directly or indirectly, any Investment in any Person
that is not a Permitted Investment; or (iv) redeem, defease (whether legal,
covenant or other defeasance), repurchase, retire or otherwise acquire or retire
for value, prior to any scheduled maturity, repayment or sinking fund payment,
Debt of the Company (other than the Securities) that is pari passu with or
subordinate in right of payment to the Securities (each of the transactions
described in Clauses (i) through (iv) being referred to herein as a "Restricted
Payment"), if at the time thereof:
(1) an Event of Default, or an event that with the lapse of time or
the giving of notice, or both, would constitute an Event of Default, shall
have occurred and be continuing,
(2) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at
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the beginning of the Company's most recently ended four full fiscal
quarter period for which internal financial statements are available
immediately preceding the date of such Restricted Payment, not have been
permitted to Incur at least $1.00 of additional Debt pursuant to the
Consolidated EBITDA Coverage Ratio test set forth in the first paragraph
of Section 1008, or
(3) upon giving effect to such Restricted Payment, the aggregate of
all Restricted Payments (excluding Restricted Payments permitted by
Clauses (ii) and (iii) of the next succeeding paragraph) from the date of
this Indenture (the amount so expended, if other than in cash, determined
in good faith by the Board of Directors) exceeds the sum, without
duplication, of:
(a) 50% of the Consolidated Net Income (or, in case
Consolidated Net Income shall be negative, less 100% of such
deficit) of the Company for the period (taken as one accounting
period) from the beginning of its first fiscal quarter commencing
after the date of this Indenture through the end of the Company's
most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment;
(b) 100% of the aggregate net cash proceeds from the issuance
or sale to Allied Parent of Capital Stock (other than Redeemable
Interests) of the Company and options, warrants or other rights to
acquire Capital Stock (other than Redeemable Interests and Debt
convertible into Capital Stock) of the Company and the principal
amount of Debt and Redeemable Interests of the Company that has been
converted into or exchanged for Capital Stock (other than Redeemable
Interests) of the Company after the date of this Indenture; provided
that any such net proceeds received by the Company from an employee
stock ownership plan financed by loans from the Company or a
Subsidiary of the Company shall be included only to the extent such
loans have been repaid with cash on or prior to the date of
determination;
(c) 50% of any dividends received by the Company or a Wholly
Owned Restricted Subsidiary after the date of this Indenture from an
Unrestricted Subsidiary of the Company; and
(d) $10 million.
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The foregoing provisions of this Section 1010 shall not be violated
by reason of (i) the payment of any dividend within 60 days after declaration
thereof if at the declaration date such payment would have complied with the
foregoing provisions; (ii) any refinancing or refunding of Debt permitted
pursuant to Clause (viii) of the second paragraph of Section 1008; and (iii) the
purchase, redemption or other acquisition or retirement for value of any Capital
Stock of the Company or any options, warrants or rights to purchase or acquire
shares of Capital Stock of the Company in exchange for, or out of the net cash
proceeds of, the substantially concurrent issuance or sale (other than to a
Restricted Subsidiary of the Company) of Capital Stock (other than Redeemable
Interests) of the Company; provided that the amount of any such net cash
proceeds that are utilized for any such purchase, redemption or other
acquisition or retirement for value shall be excluded from Clause (3)(b) in the
foregoing paragraph.
Upon the designation of any Restricted Subsidiary as an Unrestricted
Subsidiary, an amount equal to the greater of the book value and the fair market
value of all assets of such Restricted Subsidiary at the end of the Company's
most recently ended fiscal quarter for which internal financial statements are
available prior to such designation will be deemed to be a Restricted Payment at
the time of such designation for purposes of calculating the aggregate amount of
Restricted Payments (including the Restricted Payment resulting from such
designation) permitted under the second preceding paragraph.
SECTION 1011. Limitations Concerning Distributions by Subsidiaries, Etc.
The Company shall not, and shall not permit any Restricted
Subsidiary to, suffer to exist any consensual encumbrance or restriction on the
ability of such Restricted Subsidiary (i) to pay, directly or indirectly,
dividends or make any other distributions in respect of its Capital Stock or
other ownership interests or pay any Debt or other obligation owed to the
Company or any other Restricted Subsidiary; (ii) to make, directly or
indirectly, loans or advances to the Company or any other Restricted Subsidiary;
or (iii) to sell, lease or transfer any of its property or assets to the Company
or any Wholly Owned Restricted Subsidiary, except, in any such case (i), (ii) or
(iii), any encumbrance or restriction:
(a) pursuant to the Securities, this Indenture, the Senior
Subordinated Guarantees or any other agreement in effect on the date of
this Indenture,
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(b) pursuant to the Bank Agreement, including any Guarantees of or
Liens securing the Senior Debt Incurred thereunder,
(c) pursuant to an agreement relating to any Debt Incurred by such
Subsidiary prior to and outstanding on the date on which such Subsidiary
became a Subsidiary of the Company (including by reason of a merger or
consolidation with another Subsidiary of the Company), provided that such
Debt was not Incurred in anticipation of becoming a Subsidiary,
(d) pursuant to an agreement which has been entered into for the
pending sale or disposition of all or substantially all of the Capital
Stock, other ownership interests or assets of such Subsidiary, provided
that such restriction terminates upon consummation or abandonment of such
disposition and upon termination of such agreement,
(e) pursuant to customary non-assignment provisions in leases or
purchase agreements entered into in the ordinary course of business,
(f) pursuant to purchase money obligations for property acquired in
the ordinary course of business or liens in connection therewith permitted
to be Incurred under Section 1012 that impose restrictions of the nature
described in Clause (iii) above on the property so acquired or
(g) pursuant to an agreement effecting a renewal, extension,
refinancing or refunding of Debt Incurred pursuant to an agreement
referred to in Clause (a) or (b) above; provided, however, that the
provisions relating to such encumbrance or restriction contained in such
renewal, extension, refinancing or refunding agreement are no more
restrictive in any material respect than the provisions contained in the
agreement being renewed, extended, refinanced or refunded, as determined
in good faith by the Board of Directors.
SECTION 1012. Limitation on Liens.
Allied Parent shall not, and the Company shall not, and shall not
permit any Restricted Subsidiary to, Incur any Lien on any property or assets of
Allied Parent, the Company or any such Restricted Subsidiary, now owned or
hereafter acquired, to secure any Debt that is pari passu or subordinate in
right of payment to the Securities or the Senior Subordinated Guarantees without
making, or causing
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such Restricted Subsidiary to make, effective provision for securing the
Securities or the Senior Subordinated Guarantees, as the case may be (and, if
the Company shall so determine, any other Debt of the Company or of such
Subsidiary that is not pari passu or subordinate in right of payment to the
Securities or the Senior Subordinated Guarantees), (i) in the case of Debt that
is pari passu with the Securities or the Senior Subordinated Guarantees, as the
case may be, pari passu with such Debt and (ii) in the case of Debt that is
subordinated in right of payment to the Securities or the Senior Subordinated
Guarantees, as the case may be, prior to such Debt, as to such property for as
long as such Debt shall be so secured.
SECTION 1013. Limitation on Transactions with Affiliates and Related Persons.
The Company shall not, and shall not permit any Restricted
Subsidiary of the Company to, directly or indirectly, enter into any transaction
(or series of related transactions) (including the purchase, sale, lease or
exchange of property, the rendering of any service or the making of any loan or
advance) after the date of this Indenture with any Affiliate or Related Person
unless:
(i) such Affiliate or Related Person is (both before and after such
transaction) (a) Allied Parent or a Wholly Owned Restricted Subsidiary of
the Company or (b) another Restricted Subsidiary of the Company, the
minority interests in which are not held by any Affiliate or Related
Person; or
(ii) where the total consideration given or to be provided by the
Company or such Restricted Subsidiary in or pursuant to such transaction
(or series) (including cash, the fair value of non-cash property and the
assumption of Debt) (a) will be no more than $1 million, the Chief
Executive Officer, the Chief Operating Officer or the Chief Financial
Officer certifies in an Officers' Certificate that the terms of the
transaction (or series) are in the best interests of the Company or such
Restricted Subsidiary and are no less favorable to the Company or such
Restricted Subsidiary than those that could be obtained in a comparable
arm's-length transaction with an entity that is not an Affiliate or
Related Person, (b) will be in excess of $1 million but no more than $5
million, a majority of the disinterested members of the Board of Directors
determines in its good faith judgment, as evidenced by a Board Resolution,
that the terms of the transaction are in the best interests of the Company
or
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such Restricted Subsidiary and are no less favorable to the Company or
such Restricted Subsidiary than those that could be obtained in a
comparable arm's-length transaction with an entity that is not an
Affiliate or a Related Person; or (c) will be in excess of $5 million, a
nationally recognized investment banking firm (which may not be an
Affiliate or Related Person of the Company), in a written opinion
delivered to the Board of Directors prior to consummation of such
transaction (or series) that the terms of the transaction (or series) are
in the best interests of the Company or such Restricted Subsidiary and are
no less favorable to the Company or such Restricted Subsidiary than those
that could be obtained in a comparable arm's-length transaction with an
entity that is not an Affiliate or Related Person;
provided, however, that the foregoing restriction shall not apply to the
Intercompany Agreements as in effect on the date of this Indenture or the
transactions contemplated thereby.
SECTION 1014. Limitation on Certain Asset Dispositions.
(a) The Company shall not make, and shall not permit any Restricted
Subsidiary to make, any Asset Disposition in one or more related transactions
unless:
(i) the Company (or such Restricted Subsidiary, as the case may be)
receives consideration at the time of such disposition at least equal to
the fair market value of the shares or the assets disposed of, as
determined in good faith by the Board of Directors of the Company and
evidenced by a Board Resolution for any transaction (or series of
transactions) involving in excess of $1 million and not involving solely a
sale of equipment or other assets specifically contemplated by the
Company's capital expenditure budget previously approved by the Board of
Directors;
(ii) at least 75% of the consideration received by the Company (or
such Subsidiary) for such disposition consists of (u) cash or readily
marketable cash equivalents, (v) the assumption of Debt or other
liabilities reflected on the consolidated balance sheet of the Company and
its Restricted Subsidiaries in accordance with generally accepted
accounting principles (excluding Debt or any other liabilities subordinate
in right of payment to the Securities) and release of the Company and its
Restricted Subsidiaries from all liability in respect of the Debt or other
liabilities
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assumed, (w) assets used in, or stock or other ownership interests in a
Person that upon the consummation of such Asset Disposition becomes a
Restricted Subsidiary and will be principally engaged in, the business of
the Company or any of its Wholly-Owned Restricted Subsidiaries as such
business is conducted immediately prior to such Assets Disposition or (x)
any combination thereof, and
(iii) 100% of the Net Available Proceeds from such Asset Disposition
(including from the sale of any marketable cash equivalents received
therein), less any Reinvested Amounts, are applied by the Company (or a
Restricted Subsidiary) (A) first, within one year from the later of the
date of such Asset Disposition or the receipt of such Net Available
Proceeds, to repayment (in whole or in part) of Senior Debt of the Company
or its Restricted Subsidiaries then outstanding under any agreements or
instruments which would require such application or which would prohibit
payments pursuant to Clause (B) following; (B) second, to the extent Net
Available Proceeds are not required to be applied to Senior Debt as
specified in Clause (A), to purchases of Outstanding Securities pursuant
to an Offer to Purchase (to the extent such an offer is not prohibited by
the terms of any Senior Debt then outstanding) at a purchase price equal
to 100% of their principal amount plus accrued interest to the date of
purchase (provided, however, that installments of interest whose Stated
Maturity is on or prior to the Purchase Date will be payable to the
Holders of such Securities registered as such at the close of business on
the relevant Regular Record Dates according to their terms and as set
forth in Section 308); and (C) third, to the extent of any remaining Net
Available Proceeds following completion of such Offer to Purchase, to any
other use as determined by the Company which is not otherwise prohibited
by this Indenture.
Notwithstanding the foregoing, the Company shall not be required to
comply with the requirements of Clause (iii) of the preceding paragraph (i) if
the Net Available Proceeds (less Reinvested Amounts) available for use to make
an Offer to Purchase, together with all Net Available Proceeds (less Reinvested
Amounts) from prior Asset Dispositions which were available for use to make an
Offer to Purchase but pursuant to this paragraph were not so used, are less than
$50 million or (ii) to the extent the Company elects to redeem the Securities
with the Net Available Proceeds pursuant to the fourth paragraph on the reverse
of the form of Security set forth in Section 203.
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Notwithstanding the foregoing, if any Restricted Subsidiary in which
a Reinvested Amount is invested becomes an Unrestricted Subsidiary thereafter,
then such change in status shall be deemed to be an Asset Disposition with Net
Available Proceeds of cash in an amount equal to such Reinvested Amount, and
such an amount of cash shall be applied pursuant to Clause (iii) above (subject
to this paragraph).
Notwithstanding the foregoing, the Company shall not be required to
comply with the requirements described in Clause (ii) above of the third
preceding paragraph if the Asset Disposition is an Excepted Disposition.
(b) The Company shall mail the Offer Document for an Offer to
Purchase required pursuant to Section 1014(a) within 30 days after the date
which is one year after the later of the date of consummation of the Asset
Disposition referred to in Section 1014(a) or the receipt of the Net Available
Proceeds from such Asset Disposition. The aggregate principal amount of the
Securities to be offered to be purchased pursuant to the Offer to Purchase shall
equal the Net Available Proceeds required to be made available therefor pursuant
to Clause (iii)(B) of Section 1014(a) (rounded down to the next lowest integral
multiple of $1,000). Each Holder shall be entitled to tender all or any portion
of the Securities owned by such Holder pursuant to the Offer to Purchase,
subject to the requirement that any portion of a Security tendered must be
tendered in an integral multiple of $1,000 principal amount.
The Company shall not be entitled to any credit against its
obligations under this Section 1014 for the principal amount of any Securities
acquired or redeemed by the Company otherwise than pursuant to the Offer to
Purchase pursuant to this Section 1014.
(c) Not later than the date of the Offer Document with respect to an
Offer to Purchase pursuant to this Section 1014, the Company shall deliver to
the Trustee an Officers' Certificate as to (i) the Purchase Amount, (ii) the
allocation of the Net Available Proceeds from the Asset Disposition pursuant to
which such Offer to Purchase is being made, including, with respect to
Reinvested Amounts, the assets acquired and a statement that such assets will be
used in the business of the Company and any of its Wholly Owned Restricted
Subsidiaries as such business was conducted prior to such Asset Disposition, and
(iii) the compliance of such allocation with the provisions of Section 1014 (a)
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The Company and the Trustee shall perform their respective
obligations specified in the Offer Document for the Offer to Purchase. On or
prior to the Purchase Date, the Company shall (i) accept for payment (on a pro
rata basis, if necessary) Securities or portions thereof tendered pursuant to
the Offer to Purchase, (ii) deposit with the Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) money sufficient to pay the purchase price of all Securities or
portions thereof so accepted and (iii) deliver or cause to be delivered to the
Trustee all Securities so accepted together with an Officers' Certificate
stating the Securities or portions thereof accepted for payment by the Company.
The Paying Agent (or the Company, if so acting) shall promptly mail or deliver
to Holders of Securities so accepted payment in an amount equal to the Purchase
Price for each $1,000 principal amount of Securities so accepted, and the
Company shall promptly execute a new Security or Securities equal in principal
amount to any unpurchased portion of the Security surrendered, and the
Guarantors shall promptly execute their Senior Subordinated Guarantees to be
endorsed thereon, and thereafter the Trustee shall promptly authenticate and
mail or deliver to such Holders such new Security or Securities. Any Security
not accepted for payment shall be promptly mailed or delivered by the Company to
the Holder thereof. The Company shall publicly announce the results of the Offer
to Purchase on or as soon as practicable after the Purchase Date.
(d) Notwithstanding the foregoing, this Section 1014 shall not apply
to any Asset Disposition which constitutes a transfer, conveyance, sale, lease
or other disposition of all or substantially all of the properties and assets of
the Company and its Subsidiaries subject to Section 801.
SECTION 1015. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder of a
Security shall have the right, subject to the provisions of Article Fourteen, to
have such Security repurchased by the Company on the terms and conditions set
forth in this Section 1015 and this Indenture. The Company shall, within 30 days
following the date the Company becomes aware of the consummation of a
transaction that results in a Change of Control, mail an Offer Document with
respect to an Offer to Purchase all Outstanding Securities at a purchase price
equal to 101% of their aggregate principal amount plus accrued interest to the
Purchase Date (provided, however, that installments of interest whose Stated
Maturity is on or
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prior to the Purchase Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Regular Record Dates according to their terms and as
set forth in Section 308). Each Holder shall be entitled to tender all or any
portion of the Securities owned by such Holder pursuant to the Offer to
Purchase, subject to the requirement that any portion of a Security tendered
must be tendered in an integral multiple of $1,000 principal amount.
(b) The Company and the Trustee shall perform their respective
obligations specified in the Offer Document for the Offer to Purchase. Prior to
the Purchase Date, the Company shall (i) accept for payment Securities or
portions thereof tendered pursuant to the Offer to Purchase, (ii) deposit with
the Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) money sufficient to pay
the Purchase Price of all Securities or portions thereof so accepted and (iii)
deliver or cause to be delivered to the Trustee all Securities so accepted
together with an Officers' Certificate stating the Securities or portions
thereof accepted for payment by the Company. The Paying Agent (or the Company if
so acting) shall promptly mail or deliver to Holders of Securities so accepted
payment in an amount equal to the Purchase Price for each $1,000 of Securities
so accepted, and the Company shall promptly execute a new Security or Securities
equal in principal amount to any unpurchased portion of the Security surrendered
as requested by the Holder, and the Guarantors shall promptly execute their
Senior Subordinated Guarantees to be endorsed thereon, and thereafter the
Trustee shall promptly authenticate and mail or deliver to such Holders such new
Security or Securities. Any Security not accepted for payment shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company shall
publicly announce the results of the Offer to Purchase on or as soon as
practicable after the Purchase Date.
(c) A "Change of Control" shall be deemed to have occurred in the
event that, after the date of this Indenture, (i) any Person, or any Persons
acting together that would constitute a "group" (a "Group", which term also
includes each member thereof) for purposes of Section 13(d) under the Exchange
Act or any successor provision, together with any Affiliates or Related Persons
thereof, shall beneficially own (within the meaning of Rule 13d-3 of the
Exchange Act or any successor provision) 50% or more of the total voting power
of all classes of Voting Stock of Allied Parent; (ii) any Person or Group,
together with any Affiliates or Related Persons thereof, shall succeed in
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having sufficient of its nominees elected to the Board of Directors of Allied
Parent such that such nominees, when added to any existing director remaining on
the Board of Directors of Allied Parent after such election who is an Affiliate
or Related Person of such Person or Group, shall constitute a majority of the
Board of Directors of Allied Parent; (iii) there occurs any transaction or
series of related transactions, and the beneficial owners of the Voting Stock of
Allied Parent immediately prior to such transaction (or series) do not,
immediately after such transaction (or series), beneficially own Voting Stock
representing more than 50% of the total voting power of all classes of Voting
Stock of Allied Parent (or in the case of a transaction (or series) in which
another entity becomes a successor to Allied Parent, of the successor entity);
or (iv) the Company ceases to be a Subsidiary of Allied Parent.
SECTION 1016. Provision of Financial Information.
(a) So long as any of the Securities are Outstanding, and in
addition to and without limitation of the Company's obligations pursuant to
Section 704, whether or not the Company is required to be subject to Section
13(a) or 15(d) of the Exchange Act, or any successor provisions, the Company
(unless not permitted by the Commission to do so) shall file with the Commission
the annual reports, quarterly reports and other documents which the Company
would have been required to file with the Commission pursuant to such Section
13(a) or 15(d) or any successor provisions if the Company were so required, such
documents to be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which the Company would have been required so
to file such documents if the Company were so required. The Company shall also
in any event (a) within 15 days of each Required Filing Date (i) transmit by
mail to all Holders, as their names and addresses appear in the Security
Register, without cost to such Holders, and (ii) file with the Trustee, copies
of the annual reports, quarterly reports and other documents which the Company
files with the Commission pursuant to such Section 13(a) or 15(d) or any
successor provisions thereto or would have been required to file with the
Commission pursuant to such Section 13(a) or 15(d) or any successor provisions
thereto if the Company were required to comply with such Sections or successor
provisions and (b) if filing such documents by the Company with the Commission
is not permitted under the Exchange Act, promptly upon written request supply
copies of such documents to any prospective Holder. Notwithstanding the
foregoing, the Trustee shall have no duty to review such documents for purposes
of
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determining compliance with any provisions of this Indenture.
(b) If the Company at any time is not subject to the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act (or any
successor provisions) while any Securities constitute Restricted Securities, it
will take all actions necessary to permit resales of the Restricted Securities
and the Senior Subordinated Guarantees endorsed thereon to be made pursuant to
Rule 144A, including furnishing to any holder of such a security (or a
beneficial interest therein), or to any prospective purchaser designated by such
holder, upon the request of such holder, such financial and other information as
may be required to be delivered under paragraph (d)(4) of Rule 144A to permit
such resales and that information that would be required if the Company were
subject to the informational requirements of Sections 13 or 15(d) of the
Exchange Act.
SECTION 1017. Resale of Acquired Securities.
The Company shall not, and shall cause its Affiliates not to, resell
or otherwise dispose of any Securities acquired by them, whether pursuant to
Section 1014 or 1015, in the open market or otherwise, and shall, and shall
cause its Affiliates to, surrender all such Securities acquired to the Trustee
for cancellation.
SECTION 1018. Unrestricted Subsidiaries.
The Company at any time may designate any Person that is a
Subsidiary, or after the date of this Indenture becomes a Subsidiary, of the
Company as an "Unrestricted Subsidiary", whereupon (and until such Person ceases
to be an Unrestricted Subsidiary) such Person and each other Person that is then
or thereafter becomes a Subsidiary of such Person shall be deemed to be an
Unrestricted Subsidiary for all purposes of this Indenture. In addition, the
Company may at any time terminate the status of any Subsidiary as an
Unrestricted Subsidiary, whereupon such Subsidiary and each other Subsidiary of
the Company (if any) of which such Subsidiary is a Subsidiary shall be a
Restricted Subsidiary for all purposes of this Indenture. Each such designation
or termination shall be evidenced by a Board Resolution and shall be effective
upon the later of (i) the date specified therein and (ii) the delivery by the
Company to the Trustee of such Board Resolution and an Officer's Certificate
stating that the requirements of this Section 1018 will have been satisfied upon
effectiveness of such designation or termination.
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Notwithstanding the foregoing, no change in the status of a
Subsidiary of the Company from a Restricted Subsidiary to an Unrestricted
Subsidiary or from an Unrestricted Subsidiary to a Restricted Subsidiary shall
be effective, and no Person may otherwise become a Restricted Subsidiary, if:
(a) the Consolidated EBITDA Coverage Ratio for the four full fiscal
quarters of the Company next preceding the effective date of such
purported change or other event, calculated on a pro forma basis as if
such change or other event had been effective at the beginning of such
period, would not exceed 2.0 to 1.0 if such purported change is to occur
on or prior to December 31, 1999 and 2.25 to 1.0 if thereafter,
(b) in the case of any change in status of such a Subsidiary from a
Restricted Subsidiary to an Unrestricted Subsidiary, the Restricted
Payment resulting from such change would violate Clause (3) of the first
paragraph of Section 1010, or
(c) such change or other event would otherwise result (after the
giving of notice or the lapse of time, or both) in an Event of Default.
In addition and notwithstanding the foregoing, no Restricted
Subsidiary of the Company may become an Unrestricted Subsidiary, and the status
of any Unrestricted Subsidiary as an Unrestricted Subsidiary shall be deemed to
have been immediately terminated (whereupon such Subsidiary and each other
Subsidiary of the Company (if any) of which such Subsidiary is a Subsidiary will
be a Restricted Subsidiary) at any time when:
(i) such Subsidiary (A) has outstanding Debt that is Unpermitted
Debt or (B) owns or holds any Capital Stock of or other ownership
interests in, or a Lien on any property of, the Company or any of its
Restricted Subsidiaries;
(ii) the Company or any other Restricted Subsidiary (A) provides
credit support for, or a Guaranty of, any Debt of such Subsidiary
(including any undertaking, agreement or instrument evidencing such Debt)
or (B) is directly or indirectly liable for any Debt of such Subsidiary;
or
(iii) such Subsidiary fails to notify in writing the holders of its
Debt for borrowed money that such Debt
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is without recourse to the property and assets of the Company and its
Restricted Subsidiaries.
Any termination of the status of an Unrestricted Subsidiary as an Unrestricted
Subsidiary pursuant to the preceding sentence shall be deemed to result in a
breach of this Section 1018 in any circumstance in which the Company would not
have been permitted to change the status of such Unrestricted Subsidiary to the
status of a Restricted Subsidiary pursuant to the provisions of the preceding
paragraph. "Unpermitted Debt" means any Debt of a Subsidiary of the Company if
(x) a default thereunder (or under any instrument or agreement pursuant to or by
which such Debt is issued, secured or evidenced), or any right that the holders
thereof may have to take enforcement action against such Subsidiary or its
property or other assets, would permit (whether or not after the giving of
notice or the lapse of time or both) the holders of any Debt of the Company or
any other Restricted Subsidiary of the Company to declare the same due and
payable prior to the date on which it otherwise would have become due and
payable or otherwise to take any enforcement action against the Company or any
such other Restricted Subsidiary or (y) such Debt is secured by a Lien on any
property of the Company or any of its other Restricted Subsidiaries.
Each Person that is or becomes a Subsidiary of the Company shall be
deemed to be a Restricted Subsidiary for all purposes of this Indenture at all
times when it is a Subsidiary of the Company that is not an Unrestricted
Subsidiary. Each Person that is or becomes a Wholly Owned Subsidiary of the
Company shall be deemed to be a Wholly Owned Restricted Subsidiary at all times
when it is a Wholly Owned Subsidiary of the Company that is not an Unrestricted
Subsidiary.
SECTION 1019. Limitation on Sale of
Capital Stock of Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, issue, transfer, convey, sell, lease or otherwise dispose of any
shares of Capital Stock of or other ownership interests in a Restricted
Subsidiary, or options, warrants or other rights to acquire, or securities
convertible into or exchangeable for, such Capital Stock or other ownership
interests, to any Person (other than the Company or a Wholly Owned Restricted
Subsidiary) except in a transaction that consists of a transfer, conveyance,
sale, lease or other disposition of all the Capital Stock of and other ownership
interests in such Restricted Subsidiary owned by the Company and any Subsidiary
of the Company, and
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that is in accordance with the provisions of Section 1014 to the extent such
provisions apply.
SECTION 1020. Restriction on Business and Incurrence of
Debt by Allied Finance.
Allied Finance shall not, and Allied Parent shall not permit Allied
Finance to, engage in any activities, transactions or business, including,
without limitation, the Incurrence of any Debt, provided that the foregoing
shall not prohibit Allied Finance from (i) issuing upon the Acquisition Closing
the Allied Finance Debentures to Laidlaw in exchange for the Allied Canada
Debentures pursuant to the Debenture Exchange Agreement to be entered into by
Allied Finance and Laidlaw in the form attached as Exhibit M to the Stock
Purchase Agreement, (ii) holding the Allied Canada Debentures and (iii) engaging
in any other activities and transactions that are directly related to its status
as an obligor under the Allied Finance Debentures or its status as a holder of
the Allied Canada Debentures.
SECTION 1021. Statement by Officers as to
Default; Compliance Certificates.
(a) The Company will deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company ending after the date of this
Indenture an Officers' Certificate, stating whether or not to the best knowledge
of the signers thereof the Company or any Guarantor is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company or any Guarantor shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge.
(b) The Company shall deliver to the Trustee, as soon as possible
and in any event within 30 days after the Company becomes aware of the
occurrence of an Event of Default or an event which, with notice or the lapse of
time or both, would constitute an Event of Default, an Officers' Certificate
setting forth the details of such Event of Default or default, and the action
which the Company proposes to take with respect thereto.
SECTION 1022. Waiver of Certain Covenants.
The Company or any Guarantor may omit in any particular instance to
comply with any covenant or condition set forth in Section 801 and Sections 1004
through 1021, inclusive, if before the time for such compliance the
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Holders of at least a majority in principal amount of the Outstanding Securities
shall, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and each of the Guarantors and the duties of the Trustee in
respect of any such covenant or condition shall remain in full force and effect;
provided, however, with respect to an Offer to Purchase as to which an Offer
Document has been mailed, no such waiver may be made or shall be effective
against any Holder tendering Securities pursuant to such Offer to Purchase, and
the Company may not omit to comply with the terms of such Offer Document as to
such Holder, unless such Holder shall have waived such requirement.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Collateral Agreement; Special Mandatory
Redemption.
Pursuant to the Collateral Agreement, the net proceeds of the
Offering initially will be invested in securities that are the direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged and such securities will be deposited in a
segregated collateral trust account with the Trustee (the "Collateral Account").
Pursuant to the Collateral Agreement, the due and punctual payment and
performance of all obligations and indebtedness of the Company, whether now or
hereafter existing, under the Securities and this Indenture, including, without
limitation, Special Interest and interest accrued thereon after the commencement
of a bankruptcy, reorganization or similar proceeding involving the Company to
the extent permitted by applicable law (collectively, the "Secured Obligations")
will be secured by a first priority lien in favor of the Trustee on the
Collateral Account, the securities and any other assets in the Collateral
Account and all other assets constituting Collateral under the Collateral
Agreement (the "Collateral"), subject to the release of such lien and the
release of such Collateral to the Company upon the satisfaction of the
conditions precedent specified in Section 4.2 of the Collateral Agreement for
such release.
In the event (a) the Company has concluded, in its sole judgment,
that the Acquisition will not be consummated
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on or prior to March 5, 1997, as certified to the Trustee pursuant to the
requirements of the Collateral Agreement, or (b) for any other reason, funds are
not released from the Collateral Account pursuant to Section 4.2 of the
Collateral Agreement for purposes of funding the Acquisition, the Company shall
redeem all Outstanding Securities at a Redemption Price of 100.5% of the
principal amount of the Securities plus accrued and unpaid interest (including
Special Interest) to the Redemption Date (the "Special Mandatory Redemption").
Notwithstanding any other provision in this Indenture, the Special Mandatory
Redemption, and any payments by the Company or the Trustee to the Holders of the
Securities pursuant thereto, shall not be subject to the provisions of Article
Fourteen.
SECTION 1102. Redemption at the Election of the Company.
Subject to Article Fourteen, the Securities may be redeemed at the
election of the Company, at the times and the Redemption Prices and subject to
the conditions and other requirements specified in the form of Security
hereinbefore set forth.
SECTION 1103. Applicability of Article.
Redemption of Securities, either at the election of the Company or
mandatory, as permitted or required by any provision of the Securities and this
Indenture, shall be made in accordance with such provision and the applicable
provisions of this Article.
SECTION 1104. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1102 shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company of less than all the Securities, the Company
shall, at least 60 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities to be
redeemed. In addition, in case of any redemption at the election of the Company
pursuant to Section 1102, the Company shall, at least 60 days prior to the
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee),
furnish the Trustee with an Officers' Certificate evidencing compliance with
Section 1102 (after giving effect to such proposed redemption).
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SECTION 1105. Selection by Trustee of Securities
to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $1,000 or any integral multiple thereof) of the principal amount of
Securities of a denomination larger than $1,000.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1106. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 (7 in the case of the Special Mandatory
Redemption) nor more than 60 (10 in the case of the Special Mandatory
Redemption) days prior to the Redemption Date, to each Holder of Securities to
be redeemed, at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) whether the redemption is being made pursuant to Section 1101 or
1102 and, if being made pursuant to Section 1102, a brief statement
setting forth the Company's right to effect such redemption and the
Company's basis therefor,
(4) if less than all the Outstanding Securities are to be redeemed,
the identification (and, in the case of partial redemption of any
Securities, the
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principal amounts) of the particular Securities to be redeemed,
(5) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price,
(7) that in the case that a Security is only redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to
the Holder of such Security without service charge, a new Security or
Securities in an aggregate amount equal to the unredeemed portion of the
Security, with the Senior Subordinated Guarantees duly endorsed thereon,
and
(8) if the redemption is being made pursuant to Section 1102, the
aggregate principal amount of all Securities that will have been redeemed
pursuant to Section 1102 through and including the Redemption Date for
which such notice is being given.
Notice of redemption of Securities to be redeemed pursuant to this
Article Eleven shall be given by the Company; provided that notice of redemption
shall be given by the Trustee in the name and at the expense of the Company in
the case of the Special Mandatory Redemption or in other cases where the Company
has so requested.
SECTION 1107. Deposit of Redemption Price;
Liquidation of Collateral Account
and Draw on Credit Suisse
Letter of Credit.
(a) In the case of redemption pursuant to Section 1102, prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be redeemed
on that date.
(b) In the event of a Special Mandatory Redemption pursuant to
Section 1101, the Trustee shall pay the Holders on the Redemption Date pursuant
to Section 1108 (i) first, out of amounts available from the Collateral Account
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and (ii) second, in the event that the amount by which by the aggregate amount
payable to Holders pursuant to the Special Mandatory Redemption exceeds the
amount available from the Collateral Account, from a drawing by the Trustee on
the Credit Suisse Letter of Credit in the amount of such excess. In the event
the aggregate amount payable to Holders pursuant to the Special Mandatory
Redemption exceeds the aggregate amount available from the Collateral Account
and from the Credit Suisse Letter of Credit, prior to any Redemption Date for
such Special Mandatory Redemption, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay such excess. Notwithstanding any other provision of this
Indenture, all payments to be made to the Holders pursuant to the Special
Mandatory Redemption from the Collateral Account and from drawings under the
Credit Suisse Letter of Credit shall be made directly by the Trustee as set
forth above, and no such payment shall be made through the Company or a Paying
Agent.
SECTION 1108. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company or Paying Agent or, in the case of the Special Mandatory
Redemption, the Trustee, at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Regular Record Dates according to
their terms and the provisions of Section 308.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of (and premium, if any) and
interest on such Security shall be deemed overdue and shall, until paid, bear
interest from the Redemption Date at the rate provided by the Security.
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SECTION 1109. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities (each with a Senior Subordinated Guarantee
of each Guarantor executed by each such Guarantor and endorsed thereon), of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance
or Covenant Defeasance.
The Company may at its option by Board Resolution, at any time after
the Exchange Offer has been consummated (or, if applicable, the Shelf
Registration Statement has been declared or otherwise become effective) in
accordance with the Exchange and Registration Rights Agreement, elect to have
either Section 1202 or Section 1203 applied to the Outstanding Securities upon
compliance with the conditions set forth below in this Article Twelve.
SECTION 1202. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1201
applicable to this Section, the Company shall be deemed to have been discharged
from its obligations with respect to the Outstanding Securities and the
provisions of Article Fourteen shall cease to be effective, on and after the
date the conditions set forth below are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that (i) the Company shall be deemed to
have paid and discharged the entire indebtedness represented by the Outstanding
Securities and to have satisfied all its other obligations under such Securities
and this Indenture insofar as such Securities are concerned (and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging the
same) and (ii) the Guarantors shall be released from all of their
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obligations under their Senior Subordinated Guarantees and under Article
Thirteen of this Indenture, except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 1204 and
as more fully set forth in such Section, payments in respect of the principal
of (and premium, if any) and interest on such Securities when such payments are
due, (B) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 307, 1002, 1003 and 1016, (C) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (D) this Article
Twelve. Subject to compliance with this Article Twelve the Company may exercise
its option under this Section 1202 notwithstanding the prior exercise of its
option under Section 1203.
SECTION 1203. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1201
applicable to this Section, (i) the Company shall be released from its
obligations under Sections 1005 through 1015, inclusive, Sections 1017, 1018 and
1019 and Clauses (3), (4) and (5) of Section 801, (ii) the occurrence of an
event specified in Section 501(3) (with respect to Section 801, only Clauses
(1), (3), (4) and (5) thereof), 501(4) (with respect to any of Sections 1005
through 1015, inclusive, and Sections 1017, 1018 and 1019), 501(5) and 501(6)
shall not be deemed to be an Event of Default and (iii) the provisions of
Article Thirteen hereof shall cease to be effective on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance").
For this purpose, such covenant defeasance means that the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such Section, Clause or Article, whether directly
or indirectly by reason of any reference elsewhere herein to any such Section,
Clause or Article or by reason of any reference in any such Section , Clause or
Article to any other provision herein or in any other document; but the
remainder of this Indenture and such Securities shall be unaffected thereby.
SECTION 1204. Conditions to Defeasance or
Covenant Defeasance.
The following shall be the conditions to application of either
Section 1202 or Section 1203 to the then Outstanding Securities:
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(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 609 who shall agree to comply with the provisions of this
Article Twelve applicable to it) as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Securities,
(A) money in an amount, or (B) U.S. Government Obligations which through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before
the due date of any payment, money in an amount, or (C) a combination
thereof, in an amount sufficient in the opinion of a nationally recognized
firm of independent public accountants expressed in a written opinion with
respect thereto delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying trustee) to pay and
discharge, the principal of (premium, if any) and each installment of
interest on the Securities on the Stated Maturity of such principal or
installment of interest in accordance with the terms of this Indenture and
of such Securities.
(2) In the case of an election under Section 1202, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date of this Indenture there
has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such opinion shall confirm that, the
Holders of the Outstanding Securities will not recognize gain or loss for
Federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to Federal income tax on the same amount, in
the same manner and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred.
(3) In the case of an election under Section 1203, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Securities will not recognize gain or loss for
Federal income tax purposes as a result of such deposit and covenant
defeasance and will be subject to Federal income tax on the same amount,
in the same manner and at the same times as would have been the case if
such deposit and covenant defeasance had not occurred.
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(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that the Securities, if then listed on any
securities exchange or approved for trading in any automated quotation
system, will not be delisted or disapproved for such trading as a result
of such deposit.
(5) At the time of such deposit: (A) no default in the payment of
all or a portion of principal of (or premium, if any) or interest on any
Senior Debt of the Company shall have occurred and be continuing, and no
event of default with respect to any Senior Debt of the Company shall have
occurred and be continuing and shall have resulted in such Senior Debt
becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable and (B) no other event of
default with respect to any Senior Debt of the Company shall have occurred
and be continuing permitting (after notice or the lapse of time, or both)
the holders of such Senior Debt (or a trustee on behalf of the holders
thereof) to declare such Senior Debt due and payable prior to the date on
which it would otherwise have become due and payable, or, in the case of
either Clause (A) or Clause (B) above, each such default or event of
default shall have been cured or waived or shall have ceased to exist.
(6) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as subsections 501(7)
and (8) are concerned, at any time during the period ending on the 91st
day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period).
(7) Such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the meaning
of such Act).
(8) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under
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Section 1202 or the covenant defeasance under Section 1203 (as the case
may be) have been complied with.
(10) Such defeasance or covenant defeasance shall not result in the
trust arising from such deposit constituting an investment company as
defined in the Investment Company Act of 1940, as amended from time to
time, or such trust shall be qualified under such act or exempt from
regulation thereunder.
SECTION 1205. Deposited Money and U.S. Government
Obligations to be Held in Trust;
Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee--collectively, for purposes of
this Section 1205, the "Trustee") pursuant to Section 1204 in respect of the
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities,
of all sums due and to become due thereon in respect of principal (and premium,
if any) and interest, but such money need not be segregated from other funds
except to the extent required by law. Money so held in trust shall not be
subject to the provisions of Article Fourteen.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1204 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Securities.
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request and be relieved of all liability with respect to any money or U.S.
Government Obligations held by it as provided in Section 1204 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written opinion with respect thereto delivered to the Trustee,
are in excess of the amount thereof which would then be required to be deposited
to effect an equivalent defeasance or covenant defeasance.
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SECTION 1206. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1202 or 1203 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Twelve until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 1202 or 1203;
provided, however, that if the Company makes any payment of principal of (and
premium, if any) or interest on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
the Paying Agent.
ARTICLE THIRTEEN
Senior Subordinated Guarantee
SECTION 1301. Senior Subordinated Guarantee.
Each of Allied Parent and the Subsidiary Guarantors hereby jointly
and severally unconditionally guarantees to each Holder of a Security
authenticated and delivered by the Trustee, and to the Trustee on behalf of such
Holder, the due and punctual payment of the principal of (and premium, if any)
and interest on such Security when and as the same shall become due and payable,
whether at the Stated Maturity or by acceleration, call for redemption, purchase
or otherwise, in accordance with the terms of such Security and of this
Indenture. In case of the failure of the Company punctually to make any such
payment, each of Allied Parent and the Subsidiary Guarantors hereby jointly and
severally agrees to cause such payment to be made punctually when and as the
same shall become due and payable, whether at the Stated Maturity or by
acceleration, call for redemption, purchase or otherwise, and as if such payment
were made by the Company.
Each of the Guarantors further agrees, jointly and severally and on
a senior subordinated basis, that any amounts to be paid by such Guarantor under
its Senior Subordinated Guarantee will be paid without deduction or withholding
for or on account of any and all present or future tax, duty, assessment or
governmental charge imposed upon or as a result of such payment by the
government of Canada, or any province or other political subdivision or
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taxing authority thereof or therein, or if deduction or withholding of any such
tax, duty, assessment or charge shall at any time be required by or on behalf of
the government of Canada or any such province, political subdivision or taxing
authority, such Guarantor will pay such additional amount in respect of
principal (and premium, if any) and interest as may be necessary in order that
the net amounts paid to the Holders of the Securities or the Trustee, as the
case may be, pursuant to its Senior Subordinated Guarantee after such deduction
or withholding shall not be less than the amount provided for in the Securities
to be then due and payable; except that no such additional amount shall be
payable in respect of any Securities to any Holder (a) who is subject to such
tax, duty, assessment or governmental charge in respect of such Securities by
reason of its being connected with Canada otherwise than merely by the holding
or ownership of such Securities, or (b) who is not dealing at arm's length with
any of the Guarantors (within the meaning of the Income Tax Act (Canada) as
reenacted or amended from time to time).
Each of the Guarantors hereby jointly and severally agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of any Security or this Indenture, the absence of
any action to enforce the same, any creation, exchange, release or
non-perfection of any Lien on any collateral for, or any release or amendment or
waiver of any term of any other Guarantee of, or any consent to departure from
any requirement of any other Guarantee, of all or any of the Securities, the
election by the Trustee or any of the Holders in any proceeding under Chapter 11
of Title 11 of the United States Code (the "Bankruptcy Code") of the application
of Section 1111(b)(2) of the Bankruptcy Code, any borrowing or grant of a
security interest by the Company, as debtor-in-possession, under Section 364 of
the Bankruptcy Code, the disallowance, under Section 502 of the Bankruptcy Code,
of all or any portion of the claims of the Trustee or any of the Holders for
payment of any of the Securities, any waiver or consent by the Holder of any
Security or by the Trustee with respect to any provisions thereof or of this
Indenture, the obtaining of any judgment against the Company or any action to
enforce the same or any other circumstances which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each of the Guarantors
hereby waives the benefits of diligence, presentment, demand of payment, any
requirement that the Trustee or any of the Holders protect, secure, perfect or
insure any security interest in or other Lien on any property subject thereto or
exhaust any right or take any action against the Company (or, with respect to
the Allied
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Finance Guarantee, Allied Parent) or any other Person or any collateral, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company (or, with respect to
the Allied Finance Guarantee, Allied Parent), protest or notice with respect to
any Security or the indebtedness evidenced thereby and all demands whatsoever,
and covenants, that this Senior Subordinated Guarantee will not be discharged in
respect of any Security except by complete performance of the obligations
contained in such Security and in this Senior Subordinated Guarantee. Each of
the Guarantors hereby agrees that, in the event of a default in payment of
principal (or premium, if any) or interest on any Security, whether at its
Stated Maturity or by acceleration, call for redemption, purchase or otherwise,
legal proceedings may be instituted by the Trustee on behalf of, or by, the
Holder of such Security, subject to the terms and conditions set forth in this
Indenture, directly against each of the Guarantors to enforce its Senior
Subordinated Guarantee without first proceeding against the Company (or, with
respect to the Allied Finance Guarantee, Allied Parent). Each Guarantor agrees
that if, after the occurrence and during the continuance of an Event of Default,
the Trustee or any of the Holders are prevented by applicable law from
exercising their respective rights to accelerate the maturity of the Securities,
to collect interest on the Securities or to enforce or exercise any other right
or remedy with respect to the Securities, or the Trustee or the Holders are
prevented from taking any action to realize on any collateral, such Guarantor
agrees to pay to the Trustee for the account of the Holders, upon demand
therefor, the amount that would otherwise have been due and payable had such
rights and remedies been permitted to be exercised by the Trustee or any of the
Holders.
No provision of any Senior Subordinated Guarantee or Security or of
the Indenture shall alter or impair the Senior Subordinated Guarantee of any
Guarantor, which is absolute and unconditional, of the due and punctual payment
of the principal (and premium, if any) and interest on the Security upon which
such Senior Subordinated Guarantee is endorsed.
Each Guarantor shall be subrogated to all rights of the Holders of
the Securities upon which its Senior Subordinated Guarantee is endorsed against
the Company in respect of any amounts paid by such Guarantor on account of such
Security pursuant to the provisions of its Senior Subordinated Guarantee or this
Indenture; Allied Finance shall be subrogated to all rights of the Holders of
the Securities with respect to which the Allied Finance
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Guarantee is issued against Allied Parent in respect of any amounts paid by it
on account of the Parent Guarantee pursuant to the provisions of the Allied
Finance Guarantee; provided, however, that no Guarantor shall be entitled to
enforce or to receive any payments arising out of, or based upon, such right of
subrogation until the principal of (and premium, if any) and interest on all
Securities issued hereunder shall have been paid in full.
Each Senior Subordinated Guarantee shall remain in full force and
effect and continue to be effective should any petition be filed by or against
the Company (or, with respect to the Allied Finance Guarantee, Allied Parent)
for liquidation or reorganization, should the Company (or, with respect to the
Allied Finance Guarantee, Allied Parent) become insolvent or make an assignment
for the benefit of creditors or should a receiver or trustee be appointed for
all or any significant part of the assets of the Company (or, with respect to
the Allied Finance Guarantee, Allied Parent) and shall, to the fullest extent
permitted by law, continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Securities is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee on the Securities, whether as a "voidable preference,"
"fraudulent transfer" or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Securities shall, to the fullest
extent permitted by law, be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.
No stockholder, officer, director, employer or incorporator, past,
present or future, of any Guarantor, as such, shall have any personal liability
under any Senior Subordinated Guarantee by reason of his, her or its status as
such stockholder, officer, director, employer or incorporator.
To the extent that any Subsidiary Guarantor shall be required to pay
any amounts on account of the Securities pursuant to its Senior Subordinated
Guarantee in excess of the greater of (i) the amount of the economic benefit
actually received by such Subsidiary Guarantor from the issuance of the
Securities and (ii) an amount calculated as the product of (A) the aggregate
amount payable by the Subsidiary Guarantors on account of the Securities
pursuant to their Senior Subordinated Guarantees times (B) the proportion
(expressed as a fraction) that such Subsidiary Guarantor's net worth at the date
enforcement of its Senior
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Subordinated Guarantee is sought bears to the aggregate net worth of all
Subsidiary Guarantors at such date, then such Subsidiary Guarantor shall be
reimbursed by the other Subsidiary Guarantors for the amount of such excess, pro
rata, based upon the respective net worth of such other Subsidiary Guarantors at
the date enforcement of its Senior Subordinated Guarantees is sought. This
paragraph is intended only to define the relative rights of the Subsidiary
Guarantors as among themselves, and nothing set forth in this paragraph is
intended to or shall impair the joint and several obligations of the Guarantors
under their respective Senior Subordinated Guarantees.
The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise or such right does not impair the
rights of the Holders under any Senior Subordinated Guarantee.
SECTION 1302. Execution and Delivery of Senior
Subordinated Guarantees.
The Senior Subordinated Guarantees to be endorsed on the Securities
shall include the terms of the Senior Subordinated Guarantee set forth in
Section 1301 and any other terms that may be set forth in the form established
pursuant to Section 205. Each of the Guarantors hereby agrees to execute its
Senior Subordinated Guarantee, in a form established pursuant to Section 205, to
be endorsed on each Security authenticated and delivered by the Trustee.
The Senior Subordinated Guarantee shall be executed on behalf of
each respective Guarantor by any one of such Guarantor's Chairman of the Board,
Vice Chairman of the Board, President or Vice Presidents, attested by its
Secretary or Assistant Secretary. The signature of any or all of these officers
on the Senior Subordinated Guarantee may be manual or facsimile and may be
pursuant to a duly executed power of attorney.
A Senior Subordinated Guarantee bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of a
Guarantor shall bind such Guarantor, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of the Security on which such Senior Subordinated Guarantee is endorsed
or did not hold such offices at the date of such Senior Subordinated Guarantee.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due
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delivery of the Senior Subordinated Guarantee endorsed thereon on behalf of the
Guarantors. Each of the Guarantors hereby jointly and severally agrees that its
Senior Subordinated Guarantee set forth in Section 1301 shall remain in full
force and effect notwithstanding any failure to endorse a Senior Subordinated
Guarantee on any Security.
SECTION 1303. Subsidiary Guarantors May Consolidate, Etc.,
on Certain Terms.
Except as may be provided in Section 1304 and in Articles Eight and
Ten, nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of a Subsidiary Guarantor with or into the
Company or a Guarantor or shall prevent any sale or conveyance of the property
of a Subsidiary Guarantor as an entirety or substantially as an entirety to the
Company or a Guarantor.
SECTION 1304. Release of Guarantors.
(a) Concurrently with any consolidation or merger of a Subsidiary
Guarantor or any sale or conveyance of the property of a Subsidiary Guarantor as
an entirety or substantially as an entirety, in each case as permitted by
Section 1303, and upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such consolidation,
merger, sale or conveyance was made in accordance with Section 1303, the Trustee
shall execute any documents reasonably required in order to evidence the release
of such Subsidiary Guarantor from its obligations under its Subsidiary
Guarantees endorsed on the Securities and under this Article Thirteen. Any
Subsidiary Guarantor not released from its obligations under its Subsidiary
Guarantees endorsed on the Securities and under this Article Thirteen shall
remain liable for the full amount of principal of (and premium, if any) and
interest on the Securities and for the other obligations of a Subsidiary
Guarantor under its Subsidiary Guarantees endorsed on the Securities and under
this Article Thirteen.
(b) Concurrently with the defeasance of the Securities under Section
1202 or the covenant defeasance of the Securities under Section 1203, the
Guarantors shall be released from all of their obligations under their Senior
Subordinated Guarantees endorsed on the Securities and under this Article
Thirteen.
(c) Upon the consummation of any transaction (whether involving a
sale or other disposition of securities, a merger, a designation as an
Unrestricted Subsidiary or otherwise) whereby any Subsidiary Guarantor ceases to
be
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a Restricted Subsidiary and which transaction is otherwise in compliance with
the provisions of this Indenture, such Subsidiary Guarantor shall automatically
be released from all obligations under its Subsidiary Guarantees endorsed on the
Securities and under this Article Thirteen.
SECTION 1305. Additional Guarantors.
(a) Allied Finance shall, and the Company shall cause Allied Finance
to, upon the closing of the Acquisition, unconditionally guarantee (the "Allied
Finance Guarantee") to each Holder of a Security authenticated and delivered by
the Trustee, and to the Trustee on behalf of such Holder, the due and punctual
payment of Allied Parent's obligations under the Parent Guarantee when and as
the same shall become due and payable, whether at the Stated Maturity or by
acceleration, call for redemption, purchase or otherwise, in accordance with the
terms of such Security and of this Indenture. Pursuant the Allied Finance
Guarantee, in case of Allied Parent's failure of punctually to make any such
payment, Allied Finance shall agree to cause such payment to be made punctually
when and as the same shall become due and payable, whether at the Stated
Maturity or by acceleration, call for redemption, purchase or otherwise, and as
if such payment were made by Allied Parent. Allied Finance shall become a
Guarantor by executing and delivering to the Trustee (a) a supplemental
indenture, in form and substance satisfactory to the Trustee, which subjects
Allied Finance to the obligations set forth above, to the other provisions in
this Indenture with respect to the Allied Finance Guarantee and to the
provisions under this Indenture applicable to Guarantors generally and (b) an
Opinion of Counsel to the effect that such supplemental indenture has been duly
authorized and executed by Allied Finance and constitutes the legal, valid,
binding and enforceable obligation of Allied Finance (subject to such customary
exceptions concerning creditors' rights and equitable principles as may be
acceptable to the Trustee in its discretion).
(b) The Company shall cause each Person that becomes a Restricted
Subsidiary after the date of this Indenture (other than Med Track), upon
becoming a Restricted Subsidiary, to become a Subsidiary Guarantor with respect
to the Securities. Any such Person shall become a Subsidiary Guarantor by
executing and delivering to the Trustee (a) a supplemental indenture, in form
and substance satisfactory to the Trustee, which subjects such Person to the
provisions of this Indenture as a Subsidiary Guarantor and (b) an Opinion of
Counsel to the effect that such supplemental indenture has been duly authorized
and executed by such
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Person and constitutes the legal, valid, binding and enforceable obligation of
such Person (subject to such customary exceptions concerning creditors' rights
and equitable principles as may be acceptable to the Trustee in its discretion).
ARTICLE FOURTEEN
Subordination of Securities
and Senior Subordinated Guarantees
SECTION 1401. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article (subject to the provisions
of Article Four and Article Twelve and Section 1101), (i) the payment of the
principal of (and premium, if any) and interest on the Securities and any other
obligations in respect of the Securities (including any obligation to repurchase
Securities) are hereby expressly made subordinate and subject in right of
payment to the prior payment in full of all Senior Debt of the Company, and (ii)
the payment of each Guarantor's obligations in respect of its Senior
Subordinated Guarantee is hereby expressly made subordinate and subject in right
of payment to the prior payment in full of all the obligations of such Guarantor
under all Senior Debt of such Guarantor.
SECTION 1402. Payment Over of Proceeds Upon
Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company, then and in any
such event specified in (a), (b) or (c) above (each such event, if any, herein
sometimes referred to as a "Company Proceeding") the holders of all Senior Debt
of the Company shall first be entitled to receive payment in full of all amounts
due or to become due on or in respect of all such Senior Debt, or provision
shall be made for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of such Senior Debt,
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before the Holders of the Securities are entitled to receive any payment or
distribution of any kind or character from the Company, whether in cash,
property or securities (including any payment or distribution which may be
payable or deliverable by reason of the payment of any other Debt of the Company
subordinated to the payment of the Securities on account of principal of (or
premium, if any) or interest (including Special Interest) on or other
obligations in respect of the Securities or on account of any purchase or other
acquisition of Securities by the Company or Allied Parent or any Subsidiary of
the Company (all such payments, distributions, purchases and acquisitions herein
referred to, individually and collectively, as a "Company Securities Payment"),
and to that end the holders of Senior Debt of the Company shall be entitled to
receive, for application to the payment thereof, any Company Securities Payment
which may be payable or deliverable in respect of the Securities in any such
Company Proceeding.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to any Guarantor or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of any Guarantor, whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy, or (c) any assignment for the benefit
of creditors or any other marshalling of assets and liabilities of any
Guarantor, then and in any such event specified in (a), (b) or (c) above (each
such event, if any, herein sometimes referred to as a "Guarantor Proceeding";
the Company Proceeding and the Guarantor Proceeding each may be referred to as a
"Proceeding") the holders of all Senior Debt of such Guarantor shall first be
entitled to receive payment in full of all amounts due or to become due on or in
respect of all such Senior Debt, or provision shall be made for such payment in
cash or cash equivalents or otherwise in a manner satisfactory to the holders of
such Senior Debt, before the Holders of the Securities are entitled to receive
any payment or distribution of any kind or character from such Guarantor,
whether in cash, property or securities (including any payment or distribution
which may be payable or deliverable by reason of the payment of any other Debt
of such Guarantor subordinated to the payment of its Senior Subordinated
Guarantee by such Guarantor) on account of its Senior Subordinated Guarantee
(all such payments and distributions herein referred to, individually and
collectively, as a "Guarantor Securities Payment"; any of the Company Securities
Payment and the Guarantor Securities Payment each may be referred to as a
"Securities Payment"), and to that end the holders of Senior Debt of such
Guarantor
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shall be entitled to receive, for application to the payment thereof, any
Guarantor Securities Payment which may be payable or deliverable in respect of
the Senior Subordinated Guarantee by such Guarantor in any such Guarantor
Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section , the Trustee or the Holder of any Security shall have received any
Securities Payment before all Senior Debt the Company or the Guarantor, as
applicable, is paid in full or payment thereof provided for in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of such Senior
Debt, then and in such event such Securities Payment shall be paid over or
delivered forthwith to the holders of Senior Debt for application to the payment
of such Senior Debt remaining unpaid, to the extent necessary to pay such Senior
Debt in full, after giving effect to any concurrent payment or distribution to
or for the holders of such Senior Debt.
The consolidation of the Company or any Guarantor with, or the
merger of the Company or any Guarantor into, another Person or the liquidation
or dissolution of the Company or any Guarantor following the conveyance or
transfer of all or substantially all of its properties and assets as an entirety
to another Person upon the terms and conditions set forth in Article Eight shall
not be deemed a Proceeding for the purposes of this Section if the Person formed
by such consolidation or into which the Company or any Guarantor is merged or
the Person which acquires by conveyance or transfer such properties and assets
as an entirety, as the case may be, shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions set forth in Article
Eight.
SECTION 1403. No Payment When Senior Debt in Default.
In the event that any Company Senior Payment Default (as defined
below) shall have occurred and be continuing, then no Company Securities Payment
shall be made unless and until such Company Senior Payment Default shall have
been cured or waived or shall have ceased to exist or all amounts then due and
payable in respect of Senior Debt of the Company shall have been paid in full,
or provision shall have been made for such payment in cash or otherwise in a
manner satisfactory to the holders of such Senior Debt. "Company Senior Payment
Default" means (i) any default in the payment of principal of (or premium, if
any) or interest on any Senior Debt of the Company and (ii) any event of default
with respect to Senior Debt of the Company which has resulted in such Senior
Debt becoming or being declared due
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and payable prior to the date on which it would otherwise
have become due and payable.
In the event that any Guarantor Senior Payment Default (as defined
below) with respect to any Guarantor shall have occurred and be continuing, then
no Guarantor Securities Payment shall be made by such Guarantor unless and until
such Guarantor Senior Payment Default shall have been cured or waived or shall
have ceased to exist or all amounts then due and payable in respect of the
Senior Debt of such Guarantor shall have been paid in full, or provision shall
have been made for such payment in cash or otherwise in a manner satisfactory to
the holders of Senior Debt of such Guarantor. "Guarantor Senior Payment Default"
means, with respect to any Guarantor, (i) any default in the payment of
principal of (or premium, if any) or interest on any Senior Debt of such
Guarantor and (ii) any event of default with respect to Senior Debt of such
Guarantor which has resulted in such Senior Debt becoming or being declared due
and payable prior to the date on which it would otherwise have become due and
payable. Any Company Senior Payment Default or Guarantor Senior Payment Default
may be referred to herein as a "Senior Payment Default".
In the event that any Company Senior Nonmonetary Default (as defined
below) shall have occurred and be continuing, then, upon the receipt by the
Company and the Trustee of written notice of such Company Senior Nonmonetary
Default from the Agent Bank under the Bank Agreement (or if such Agreement has
been terminated, from any holder of Senior Debt of the Company with a principal
amount in excess of $50 million), no Company Securities Payment shall be made
during the period (the "Company Payment Blockage Period") commencing on the date
of such receipt of such written notice and ending on the earlier of (i) the date
on which such Company Senior Nonmonetary Default shall have been cured or waived
or shall have ceased to exist and any acceleration of Senior Debt of the Company
shall have been rescinded or annulled or the Senior Debt of the Company to which
such Company Senior Nonmonetary Default relates shall have been discharged or
(ii) the 179th day after the date of such receipt of such written notice. No
more than one Company Payment Blockage Period may be commenced with respect to
the Securities during any consecutive 360-day period. For all purposes of this
paragraph, no Senior Nonmonetary Default that existed or was continuing on the
date of commencement of any Company Payment Blockage Period shall be, or be
made, the basis for the commencement of a subsequent Company Payment Blockage
Period whether or not within a period of 360 consecutive days by holders of
Senior Debt of the Company or their representatives unless such
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Company Senior Nonmonetary Default shall have been cured for a period of not
less than 90 consecutive days. "Company Senior Nonmonetary Default" means the
occurrence or existence and continuance of any event of default, or of any event
which, after notice or lapse of time (or both), would become an event of
default, under the terms of any instrument pursuant to which any Senior Debt of
the Company is outstanding, permitting (after notice or lapse of time or both)
one or more holders of such Senior Debt (or a trustee or agent on behalf of the
holders thereof) to declare such Senior Debt due and payable prior to the date
on which it would otherwise become due and payable, other than a Company Senior
Payment Default.
In the event that a Guarantor Senior Nonmonetary Default (as defined
below) with respect to any Guarantor shall have occurred and be continuing,
then, upon the receipt by such Guarantor and the Trustee of written notice of
such Guarantor Senior Nonmonetary Default from a holder of Senior Debt of such
Guarantor with a principal amount in excess of $50 million, no Guarantor
Securities Payment shall be made by such Guarantor during the period (a
"Guarantor Payment Blockage Period") commencing on the date of such receipt of
such written notice and ending on the earlier of (i) the date on which such
Guarantor Senior Nonmonetary Default shall have been cured or waived or shall
have ceased to exist and any acceleration of Senior Debt of such Guarantor shall
have been rescinded or annulled or the Senior Debt of such Guarantor to which
such Guarantor Senior Nonmonetary Default relates shall have been discharged or
(ii) the 179th day after the date of such receipt of such written notice. No
more than one Guarantor Payment Blockage Period may be commenced with respect to
the Securities during any 360-day period. For all purposes of this paragraph, no
Guarantor Senior Nonmonetary Default with respect to a Guarantor that existed or
was continuing on the date of commencement of any Guarantor Payment Blockage
Period with respect to such Guarantor shall be, or be made, the basis for the
commencement of a Guarantor subsequent Payment Blockage Period with respect to
such Guarantor whether or not within a period of 360 consecutive days by holders
of Senior Debt of such Guarantor or their representatives unless such Guarantor
Senior Nonmonetary Default shall have been cured for a period of not less than
90 consecutive days. A "Guarantor Senior Nonmonetary Default" means, with
respect to any Guarantor, the occurrence or existence and continuance of any
event of default, or of any event which, after notice or lapse of time (or
both), would become an event of default, under the terms of any instrument
pursuant to which any Senior Debt of such Guarantor is outstanding, permitting
(after notice or lapse
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of time or both) one or more holders of such Senior Debt (or a trustee or agent
on behalf of the holders thereof) to declare such Senior Debt due and payable
prior to the date on which it would otherwise become due and payable, other than
a Guarantor Senior Payment Default. Any of the Company Senior Nonmonetary
Default and the Guarantor Senior Nonmonetary Defaults may be referred to herein
as a "Senior Nonmonetary Default".
In the event that, notwithstanding the foregoing, the Company or any
Guarantor shall make any Company Securities Payment or Guarantor Securities
Payment, as the case may be, to the Trustee or any Holder prohibited by the
foregoing provisions of this Section , then and in such event such Securities
Payment shall be paid over and delivered forthwith to the holders of the Senior
Debt of the Company or the Guarantor, as the case may be.
The provisions of this Section shall not apply to any Securities
Payment with respect to which Section 1402 would be applicable.
SECTION 1404. Certain Payments Permitted.
Nothing contained in this Article or elsewhere in this Indenture or
in any of the Securities or the Senior Subordinated Guarantees endorsed thereon
shall prevent (a) the Company or any Guarantor, at any time except during the
pendency of any Proceeding referred to in Section 1402 or under the conditions
described in Section 1403, from making Securities Payments, or (b) the Company
from meeting its obligations with respect to the Special Mandatory Redemption,
any payments by the Company to the Holders of the Securities or the application
by the Trustee of any funds from the Collateral Account or any other Collateral
under the Collateral Agreement pursuant to the Special Mandatory Redemption.
SECTION 1405. Subrogation to Rights of Holders of Senior
Debt.
Subject to the payment in full in cash of all amounts due or to
become due on or in respect of Senior Debt of the Company or a Guarantor, as the
case may be, or the provision for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of such Senior Debt, the
Holders of the Securities shall be subrogated to the rights of the holders of
such Senior Debt to receive payments and distributions of cash, property and
securities applicable to such Senior Debt until the principal of (and premium,
if any) and interest on the
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Securities or the obligation under such Guarantor's Senior Subordinated
Guarantee, as the case may be, shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior Debt of
the Company or a Guarantor of any cash, property or securities to which the
Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article, and no payments over pursuant to the provisions of
this Article to the holders of Senior Debt of the Company or such Guarantor, as
the case may be, by Holders of the Securities or the Trustee, shall, as among
the Company or such Guarantor, as the case may be, its creditors other than
holders of Senior Debt and the Holders of the Securities, be deemed to be a
payment or distribution by the Company or such Guarantor, as applicable, to or
on account of the Senior Debt of the Company or such Guarantor, as the case may
be.
SECTION 1406. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Debt on the other hand. Nothing contained in this Article or
elsewhere in this Indenture or in the Securities is intended to or shall (a)
impair, as among the Company or any Guarantor, as applicable, its creditors
other than holders of Senior Debt and the Holders of the Securities with the
Guarantees endorsed thereon, the obligation of the Company or any Guarantor, as
applicable, which is absolute and unconditional (and which, subject to the
rights under this Article of the holders of Senior Debt, is intended to rank
equally with all other general obligations of the Company), to pay to the
Holders of the Securities with the Guarantees endorsed thereon the principal of
(and premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company or any Guarantor, as applicable, of the
Holders of the Securities with the Guarantees endorsed thereon and creditors of
the Company or any Guarantor, as applicable, other than the holders of Senior
Debt; or (c) prevent the Trustee or the Holder of any Security with the
Guarantees endorsed thereon from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article of the holders of Senior Debt to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
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SECTION 1407. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 1408. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or any Guarantor or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Company or any Guarantor with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Debt, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter or
increase, Senior Debt, or otherwise amend or supplement in any manner Senior
Debt or any instrument evidencing the same or any agreement under which Senior
Debt is outstanding; (ii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt; (iii) release any
Person liable in any manner for the collection of Senior Debt; and (iv) exercise
or refrain from exercising any rights against the Company, the Guarantors and
any other Person.
SECTION 1409. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities or any of the Senior Subordinated
Guarantees. Notwithstanding the provisions of this Article or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the
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<PAGE> 160
Trustee in respect of the Securities or any of the Senior Subordinated
Guarantees, unless and until the Trustee shall have received written notice
thereof from the Company or a holder of Senior Debt or from any trustee
therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 601, shall be entitled in all respects to
assume that no such facts exist, provided that nothing in this Section 1409
shall impair the subordination provisions of this Article Fourteen.
Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a trustee, representative
or agent therefor) to establish that such notice has been given by a holder of
Senior Debt (or a trustee, representative or agent therefor). In the event that
the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Debt to participate in
any payment or distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Debt held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 1410. Reliance on Judicial Order or Certificate
of Liquidating Agent.
Upon any payment or distribution of assets or securities of the
Company or any Guarantor referred to in this Article, the Trustee, subject to
the provisions of Section 601, and the Holders of the Securities shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such Proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other indebtedness of the
Company or any Guarantor, as the case may be, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article.
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<PAGE> 161
SECTION 1411. Trustee Not Fiduciary for Holders of Senior
Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and shall not be liable to any such holders if it shall
in good faith mistakenly pay over or distribute to Holders of Securities or to
the Company or any Guarantor or to any other Person cash, property or securities
to which any holders of Senior Debt shall be entitled by virtue of this Article
or otherwise.
SECTION 1412. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Debt which may at
any time be held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.
Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 607.
SECTION 1413. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1412 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 1414. Defeasance of this Article Fourteen.
The subordination of the Securities and the Senior Subordinated
Guarantees provided by this Article Fourteen is expressly made subject to the
provisions for defeasance or covenant defeasance in Articles Four and Twelve
and, anything herein to the contrary notwithstanding, upon the effectiveness of
any such defeasance or covenant defeasance, the Securities then Outstanding and
the Senior Subordinated Guarantees relating thereto shall thereupon cease to be
subordinated pursuant to this Article Fourteen.
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<PAGE> 162
ARTICLE FIFTEEN
Jurisdiction and Consent to Service of Process
SECTION 1501. Jurisdiction and Consent to Service of
Process.
(a) Each of the Company and the Guarantors hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or Federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to the Securities, the
Senior Subordinated Guarantees, this Indenture or the Collateral Agreement, or
for recognition or enforcement of any judgment, and each of such Persons hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the Company and the
Guarantors agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Article Fifteen shall
affect any right that any Holder or the Trustee may otherwise have to bring any
action or proceeding relating to the Securities, the Senior Subordinated
Guarantees, this Indenture or the Collateral Agreement against the Company, any
Guarantor or their respective properties in the courts of any jurisdiction.
(b) Each of the Company and the Guarantors hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to the Securities, the
Senior Subordinated Guarantees, this Indenture or the Collateral Agreement in
any New York State or Federal court. Each of the Company and the Guarantors
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each of the Company and the Guarantors irrevocably consents to
service of process in the manner provided for notices in Section 105. Nothing in
this Agreement will affect the right of any Holder or the Trustee to serve
process in any other manner permitted by law.
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<PAGE> 163
--------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<PAGE> 164
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
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
Attest:
/s/ Steven M. Helm
- --------------------
Steven M. Helm
ALLIED WASTE INDUSTRIES, INC.,
As Guarantor
By:/s/ Henry L. Hirvela
--------------------------------
Name: Henry L. Hirvela
Title: Vice President
By:/s/ Roger A. Ramsey
--------------------------------
Name: Roger A. Ramsey
Title: Chief Executive Officer
Attest:
/s/ Steven M. Helm
- --------------------
Steven M. Helm
ALLIED WASTE FINANCE (CANADA) LTD.,
As future Guarantor of the
obligations of Allied
Waste Industries, Inc.
under the Parent Guarantee
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<PAGE> 165
By:/s/ Steven M. Helm
--------------------------------
Name: Steven M. Helm
Title: Secretary
Attest:
/s/ Henry L. Hirvela
- -----------------------
Henry L. Hirvela
Each of the Subsidiary Guarantors
Listed on Schedule I hereto,
As Guarantor
By:*/s/ Henry L. Hirvela
--------------------------------
Name: Henry L. Hirvela
Title: Executive Vice President
By:**/s/ Steven M. Helm
--------------------------------
Name: Steven M. Helm
Title: Secretary and Treasurer
Attest:*
/s/ Steven M. Helm
- ------------------------
Steven M. Helm
FIRST BANK NATIONAL
ASSOCIATION,
As Trustee
By:/s/ Richard H. Prokosch
--------------------------------
Name: Richard H. Prokosch
Title: Trust Officer
- --------
* Signing as duly authorized officer for each such Subsidiary Guarantor
other than Allied Canada.
** Signing as duly authorized officer for Allied Canada.
-151-
<PAGE> 166
Attest:
/s/ Christina Hatfield
- -----------------------
Christina Hatfield
-152-
<PAGE> 167
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK)
On the 5th day of December, 1996, before me personally came Roger A.
Ramsey, to me known, who, being by me duly sworn, did depose and say that he is
the Chief Executive Officer of Allied Waste North America, Inc. and Allied Waste
Industries, Inc., two of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.
/s/ Tissapeh Abedinejad
---------------------------
-153-
<PAGE> 168
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK)
On the 5th day of December, 1996, before me personally came Henry L.
Hirvela, to me known, who, being by me duly sworn, did depose and say that he is
the Vice President and CFO of Allied Waste North America, Inc. and Allied Waste
Industries, Inc., two of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.
/s/ Tissapeh Abedinejad
---------------------------
-154-
<PAGE> 169
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK)
On the 5th day of December, 1996, before me personally came Steven
M. Helm, to me known, who, being by me duly sworn, did depose and say that he is
the Secretary Treasurer of Allied Waste Finance (Canada) Ltd., as future
Guarantor of the obligations of Allied Waste Industries, Inc. under the Parent
Guarantee, described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
/s/ Tissapeh Abedinejad
---------------------------
-155-
<PAGE> 170
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK)
On the 5th day of December, 1996, before me personally came Henry L.
Hirvela, to me known, who, being by me duly sworn, did depose and say that he is
the Executive Vice President of each of the Subsidiary Guarantors (other than
Allied Waste Holdings (Canada) Ltd.) listed on Schedule I to, and which executed
the foregoing, instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and that he signed
his name thereto by like authority.
/s/ Tissapeh Abedinejad
---------------------------
-156-
<PAGE> 171
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK)
On the 5th day of December, 1996, before me personally came Steven
M. Helm, to me known, who, being by me duly sworn, did depose and say that he is
the Secretary and Treasurer of Allied Waste Holdings (Canada) Ltd., one of the
Guarantors described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
/s/ Tissapeh Abedinejad
---------------------------
-157-
<PAGE> 172
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK)
On the 5th day of December, 1996, before me personally came Richard
H. Prokosch, to me known, who, being by me duly sworn, did depose and say that
he is a Trust Officer of First Bank National Association, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
/s/ Tissapeh Abedinejad
---------------------------
<PAGE> 173
SCHEDULE I
LIST OF SUBSIDIARY GUARANTORS
Allied Waste Holdings (Canada) Ltd.
A and W Disposal Service, Inc.
Acme Scavenger Service, Inc.
Allied Waste Industries (Midwest), Inc.
Allied Waste Industries of Illinois, Inc.
Allied Waste of California, Inc.
Allied Waste Systems, Inc. (Ill. corp.)
Brickyard Disposal & Recycling, Inc.
Citiwaste, Inc.
Consolidated Processing, Inc.
Duckett Disposal, Inc.
Duke Refuse Disposal, Inc.
Illinois Landfill, Inc.
John Spot Portable Services, Inc.
K & H Disposal, Inc.
Lee County Landfill, Inc.
Midwest Waste RDF, Inc.
National Waste Industries, Inc.
National Waste Services, Inc.
Peter Laning Sons, Inc.
Post Disposal Service, Inc.
R. 18, Inc.
RCS, Inc.
Sanitary Waste Services, Inc.
South Holland Scavenger Service, Inc.
South Suburban Disposal, Inc.
Southwest Disposal Service, Inc.
Streator Area Landfill, Inc.
Superior Scavenger, Inc.
Upper Rock Island County Landfill, Inc.
USI/Hustlers, Inc.
Van Weelden Brothers, Inc.
AAWI, Inc.
Allied Enviro Engineering, Inc. (Tex. corp.)
Allied Waste Services, Inc.
Environmental Development Corp.
EOS Environmental, Inc.
Allied Enviroengineering, Inc. (Del. corp.)
Allied Waste Alabama, Inc.
Allied Waste Systems, Inc. (Del. corp.)
AWIN Finance Company, Inc.
AWIN Leasing Company, Inc.
Container Corporation of Carolina
Vermilion Waste Systems, Inc.
Allied Waste Hauling of Georgia, Inc.
Allied Waste Industries of Georgia, Inc.
Bulldog Johnny, Inc.
I-1
<PAGE> 174
Clayco Sanitation Company
Haul-All Sanitation, Inc.
Johnny on the Spot--Portable Toilets, Inc.
Southern States Environmental Services, Inc.
Allied Waste Industries (Arizona), Inc.
Allied Waste Industries (Southwest), Inc.
Apache Junction Landfill Corporation
Best Disposal Services, Inc.
Mr. Potty, Inc.
Pen-Rob, Inc.
Pinal County Landfill Corp.
Sun Services & Liquid Waste Removal, Inc.
Superior Services Waste Management, Inc.
Allied Waste Industries (Colorado), Inc.
Allied Waste Industries of Alamosa, Inc.
L&M Disposal, Inc.
Allied Waste Industries (Missouri), Inc.
Autoshred, Inc.
Bluff Trash Service, Inc.
Cass County Disposal, Inc.
Chuck's Disposal Services, Inc.
Lemons Landfill Corporation
Lemons Waste Systems, Inc.
Midwest Land Development Corp.
Midwest Landfill Corporation
Midwest Waste, Inc.
Midwest Waste Industrial, Inc.
North American Recycling, Inc.
Ozark Foothills Regional Recycling Facility, Inc.
Poplar Bluff Construction and Development Company, Inc.
Sanico, Inc.
T. and W. Disposal Company, Inc.
Willey Enterprises, Inc.
Allied Waste Industries (New Mexico), Inc.
Environmental Control, Inc.
Sanco, Inc.
Allied Waste Industries of Indiana, Inc.
Allied Waste Industries of Northwest Indiana, Inc.
Allied Waste Industries of Plymouth, Inc.
Illiana Disposal Service, Inc.
Newton County Development Corp.
Ooms Bros. Disposal Service, Inc.
Service Waste, Inc.
Wastehaul, Inc.
Allied Waste Industries of Tennessee, Inc.
Allied Waste Industries of Virginia, Inc.
Allied Waste Industries of Wyoming, Inc.
Community Refuse Disposal, Inc.
Dopheide Sanitary Service, Inc.
Organized Sanitary Collectors and Recyclers, Inc.
Oscar's Collection Systems of Fremont, Inc.
W.J. Flyte Corporation
I-2
<PAGE> 175
CRX Inc.
I-3
<PAGE> 176
ANNEX A -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to Section 306(b)(i), (iii) and (v)
of the Indenture)
First Bank National Association
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
Re: 10 1/4% Senior Notes due 2006 of
Allied Waste North America, Inc.
(the "Securities")
--------------------------------
Reference is made to the Indenture, dated as of December 1, 1996
(the "Indenture"), from Allied Waste North America, Inc. (the "Company"), the
Guarantors named therein and Allied Waste Finance (Canada) Ltd., as future
Guarantor to First Bank National Association, as Trustee. Terms used herein and
defined in the Indenture or in Regulation S or Rule 144 under the U.S.
Securities Act of 1933 (the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
Regulation S Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an
A-1
<PAGE> 177
effective registration statement under the Securities Act, it is being effected
in accordance with Rule 904 or Rule 144 under the Securities Act and with all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:
(1) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities, an
affiliate of the Company or any such distributor or a person acting
on behalf of any of the foregoing;
(B) the offer of the Specified Securities was not made to a
person in the United States;
(C) either:
(i) at the time the buy order was originated, the
Transferee was outside the United States or the Owner and any
person acting on its behalf reasonably believed that the
Transferee was outside the United States, or
(ii) the transaction is being executed in, on or through
the facilities of the Eurobond market, as regulated by the
Association of International Bond Dealers, or another
designated offshore securities market and neither the Owner
nor any person acting on its behalf knows that the transaction
has been prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the United
States by or on behalf of the Owner or any affiliate thereof;
(E) if the Owner is a dealer in securities or has received a
selling concession, fee or other renumeration in respect of the
Specified Securities, and the transfer is to occur during the
Restricted Period, then the requirements of Rule 904(c)(1) have been
satisfied; and
(F) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
A-2
<PAGE> 178
(2) Rule 144 Transfers. If the transfer is being effected pursuant
to Rule 144:
(A) the transfer is occurring after a holding period of at
least two years (computed in accordance with paragraph (d) of Rule
144) has elapsed since the Specified Securities were last acquired
from the Company or from an affiliate of the Company, whichever is
later, and is being effected in accordance with the applicable
amount, manner of sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at
least three years has elapsed since the Specified Securities were
last acquired from the Company or from an affiliate of the Company,
whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company, the Guarantors and the Initial
Purchasers.
Dated: ------------------------------------------------
(Print the name of the Undersigned, as such term
is defined in the second paragraph of this
certificate.)
By:
---------------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership
or fiduciary, the title of the person signing on
behalf of the Undersigned must be stated.)
A-3
<PAGE> 179
ANNEX B -- Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 306(b)(ii), (iii), (iv) and (v)
of the Indenture)
First Bank National Association
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
Re: 10 1/4% Senior Notes due 2006 of
Allied Waste North America, Inc.
(the "Securities")
--------------------------------
Reference is made to the Indenture, dated as of December 1, 1996
(the "Indenture"), from Allied Waste North America, Inc. (the "Company"), the
Guarantors named therein and Allied Waste Finance (Canada) Ltd., as future
Guarantor to First Bank National Association, as Trustee. Terms used herein and
defined in the Indenture or in Rule 144A or Rule 144 under the U.S. Securities
Act of 1933 (the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
ISIN No(s), If any. ____________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a Restricted
Security. In
B-1
<PAGE> 180
connection with such transfer, the Owner hereby certifies that, unless such
transfer is being effected pursuant to an effective registration statement under
the Securities Act, it is being effected in accordance with Rule 144A or Rule
144 under the Securities Act and all applicable securities laws of the states of
the United States and other jurisdictions. Accordingly, the Owner hereby further
certifies as:
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably
believe is a "qualified institutional buyer" within the meaning of
Rule 144A, acquiring for its own account or for the account of a
qualified institutional buyer; and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the
Owner may be relying on Rule 144A in connection with the transfer;
and
(2) Rule 144 Transfers. If the transfer is being effected pursuant
to Rule 144:
(A) the transfer is occurring after a holding period of at
least two years (computed in accordance with paragraph (d) of Rule
144) has elapsed since the Specified Securities were last acquired
from the Company or from an affiliate of the Company, whichever is
later, and is being effected in accordance with the applicable
amount, manner of sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at
least three years has elapsed since the Specified Securities were
last acquired from the Company or from an affiliate of the Company,
whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company.
B-2
<PAGE> 181
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company, the Guarantors and the Initial
Purchasers.
Dated:
------------------------------------------------
(Print the name of the Undersigned, as such term
is defined in the second paragraph of this
certificate.)
By:
---------------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership
or fiduciary, the title of the person signing on
behalf of the Undersigned must be stated.)
B-3
<PAGE> 182
ANNEX C -- Form of Unrestricted
Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to Section 306(c))
First Bank National Association
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
Re: 10 1/4% Senior Notes due 2006 of
Allied Waste North America, Inc.
(the "Securities")
--------------------------------
Reference is made to the Indenture, dated as of December 1, 1996
(the "Indenture"), from Allied Waste North America, Inc. (the "Company"), the
Guarantors named therein and Allied Waste Finance (Canada) Ltd., as future
Guarantor to First Bank National Association, as Trustee. Terms used herein and
defined in the Indenture or in Rule 144 under the U.S. Securities Act of 1933
(the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged
for Securities bearing no Securities Act Legend pursuant to Section 306(c) of
the Indenture. In connection with such exchange, the Owner hereby certifies
C-1
<PAGE> 183
that the exchange is occurring after a holding period of at least three years
(computed in accordance with paragraph (d) of Rule 144) has elapsed since the
Specified Securities were last acquired from the Company or from an affiliate of
the Company, whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company. The Owner also
acknowledges that any future transfers of the Specified Securities must comply
with all applicable securities laws of the states of the United States and other
jurisdictions.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company, the Guarantors and the Initial
Purchasers.
Dated:
------------------------------------------------
(Print the name of the Undersigned, as such term
is defined in the second paragraph of this
certificate.)
By:
---------------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership
or fiduciary, the title of the person signing on
behalf of the Undersigned must be stated.)
C-2
<PAGE> 1
Exhibit 10.1
Conformed Copy
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, dated as of December 5, 1996,
among Allied Waste North America, Inc., a Delaware corporation (the "Company"),
Allied Waste Industries, Inc., a Delaware corporation and sole stockholder of
the Company ("Allied Parent"), Goldman, Sachs & Co., Citicorp Securities Inc.
and CS First Boston Corporation, as representatives of the purchasers (the
"Purchasers"), identified on Schedule I to the Note Purchase Agreement (as
defined herein), of the 10 1/4% Senior Subordinated Notes due December 1, 2006,
of the Company, which are unconditionally guaranteed, jointly and severally, by
Allied Parent and substantially all of the subsidiaries of the Company and
Allied Parent.
The Company proposes to issue and sell to the Purchasers (as defined
herein) upon the terms set forth in the Note Purchase Agreement the Securities
(as defined herein). As an inducement to the Purchasers to enter into the Note
Purchase Agreement and in satisfaction of a condition to the obligations of the
Purchasers thereunder, the Company agrees with the Purchasers for the benefit of
holders (as defined herein) from time to time of the Registrable Securities (as
defined herein) as follows:
1. Certain Definitions.
For purposes of this Exchange and Registration Rights Agreement, the
following terms shall have the following respective meanings:
"Acquisition" shall mean the acquisition pursuant to the Stock Purchase
Agreement by Allied Parent and certain of its subsidiaries of substantially
all of the non-hazardous solid waste management business conducted by
Laidlaw Inc., a Canadian corporation ("Laidlaw"), in the United States and
Canada.
"Acquisition Closing" shall mean the date on which the Acquisition is
closed pursuant to the Stock Purchase Agreement.
"Base Interest" shall mean the interest that would otherwise accrue on
the Securities under the terms thereof and the Indenture, without giving
effect to the provisions of this Agreement.
The term "broker-dealer" shall mean any broker or dealer registered
with the Commission under the Exchange Act.
"Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the
Exchange Act or the Securities Act, whichever is the relevant statute for
the particular purpose.
"Effective Time," in the case of (i) an Exchange Registration, shall
mean the time and date as of which the Commission declares the Exchange
Registration Statement effective or as of which the Exchange Registration
Statement otherwise becomes effective and (ii) a Shelf Registration, shall
mean the time and date as of which the Commission declares the Shelf
Registration Statement effective or as of which the Shelf Registration
Statement otherwise becomes effective.
<PAGE> 2
"Electing Holder" shall mean any holder of Registrable Securities that
has returned a completed and signed Notice and Questionnaire to the Company
in accordance with Section 3(d)(ii) or 3(d)(iii) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, or any
successor thereto, as the same shall be amended from time to time.
"Exchange Offer" shall have the meaning assigned thereto in Section
2(a) hereof.
"Exchange Registration" shall have the meaning assigned thereto in
Section 3(c) hereof.
"Exchange Registration Statement" shall have the meaning assigned
thereto in Section 2(a) hereof.
"Exchange Securities" shall have the meaning assigned thereto in
Section 2(a) hereof.
"Guarantors" shall have the meaning assigned thereto in the Indenture.
The term "holder" shall mean each of the Purchasers and other persons
who acquire Registrable Securities from time to time (including any
successors or assigns), in each case for so long as such person owns any
Registrable Securities.
"Indenture" shall mean the Indenture, dated as of December 1, 1996,
among the Company, the Guarantors and First Bank National Association, as
Trustee, as the same shall be amended from time to time.
"Note Purchase Agreement" shall mean the Purchase Agreement, dated as
of November 25, 1996, between the Purchasers, the Company and the
Guarantors relating to the Securities.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.
The term "person" shall mean a corporation, association, partnership,
organization, business, individual, government or political subdivision
thereof or governmental agency.
"Registrable Securities" shall mean the Securities; provided, however,
that a Security shall cease to be a Registrable Security when (i) in the
circumstances contemplated by Section 2(a) hereof, the Security has been
exchanged for an Exchange Security in an Exchange Offer as contemplated in
Section 2(a) hereof (provided that any Exchange Security received by a
broker-dealer in an Exchange Offer in exchange for a Registrable Security
that was not acquired by the broker-dealer directly from the Company will
also be a Registrable Security through and including the earlier of the
90th day after the Exchange Offer is completed or such time as such
broker-dealer no longer owns such Security); (ii) in the circumstances
contemplated by Section 2(b) hereof, a Shelf Registration Statement
registering such Security under the Securities Act has been declared or
becomes effective and such Security has been sold or otherwise transferred
by the holder thereof pursuant to and in a manner contemplated
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<PAGE> 3
by such effective Shelf Registration Statement; (iii) such Security is sold
pursuant to Rule 144 under circumstances in which any legend borne by such
Security relating to restrictions on transferability thereof, under the
Securities Act or otherwise, is removed by the Company or pursuant to the
Indenture; (iv) such Security is eligible to be sold pursuant to paragraph
(k) of Rule 144; or (v) such Security shall cease to be outstanding.
"Registration Default" shall have the meaning assigned thereto in
Section 2(c) hereof.
"Registration Expenses" shall have the meaning assigned thereto in
Section 4 hereof.
"Resale Period" shall have the meaning assigned thereto in Section 2(a)
hereof.
"Restricted Holder" shall mean (i) a holder that is an affiliate of the
Company within the meaning of Rule 405, (ii) a holder who acquires Exchange
Securities outside the ordinary course of such holder's business, (iii) a
holder who has arrangements or understandings with any person to
participate in the Exchange Offer for the purpose of distributing Exchange
Securities and (iv) a holder that is a broker-dealer, but only with respect
to Exchange Securities received by such broker-dealer pursuant to an
Exchange Offer in exchange for Registrable Securities acquired by the
broker-dealer directly from the Company.
"Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such
rule promulgated under the Securities Act (or any successor provision), as
the same shall be amended from time to time.
"Securities" shall mean, collectively, the 10 1/4% Senior Subordinated
Notes due December 1, 2006 of the Company to be issued and sold to the
Purchasers, and securities issued in exchange therefor or in lieu thereof
pursuant to the Indenture. Each Security is entitled to the benefit of the
guarantees provided for in the Indenture (the "Guarantees") and, unless the
context otherwise requires, any reference herein to a "Security," an
"Exchange Security" or a "Registrable Security" shall include a reference
to the related Guarantees.
"Securities Act" shall mean the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.
"Shelf Registration" shall have the meaning assigned thereto in Section
2(b) hereof.
"Shelf Registration Statement" shall have the meaning assigned thereto
in Section 2(b) hereof.
"Special Interest" shall have the meaning assigned thereto in Section
2(c) hereof.
"Stock Purchase Agreement" shall mean the Stock Purchase Agreement,
dated as of September 17, 1996, among Allied Parent, the Company and Allied
Waste Holdings (Canada) Ltd., a Canadian corporation and a wholly owned
subsidiary of the Company, and Laidlaw, Laidlaw Transportation, Inc., a
Delaware corporation and an indirect wholly-owned subsidiary of Laidlaw
("LTI"), Laidlaw Waste Systems, Inc., a Delaware corporation and a
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<PAGE> 4
wholly-owned subsidiary of LTI, Laidlaw Waste Systems (Canada) Ltd., a
Canadian corporation and a wholly-owned subsidiary of Laidlaw and Laidlaw
Medical Services Ltd., a Canadian corporation and a wholly-owned subsidiary
of Laidlaw.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or
any successor thereto, and the rules, regulations and forms promulgated
thereunder, all as the same shall be amended from time to time.
Unless the context otherwise requires, any reference herein to a "Section"
or "clause" refers to a Section or clause, as the case may be, of this Exchange
and Registration Rights Agreement, and the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Exchange and
Registration Rights Agreement as a whole and not to any particular Section or
other subdivision.
2. Registration Under the Securities Act.
(a) Except as set forth in Section 2(b) below, the Company agrees to file
under the Securities Act, as soon as practicable, but no later than 60 days
after the Acquisition Closing, a registration statement relating to an offer to
exchange (such registration statement, the "Exchange Registration Statement",
and such offer, the "Exchange Offer") any and all of the Securities for a like
aggregate principal amount of debt securities issued by the Company and
guaranteed by the Guarantors, which debt securities and guarantees are
substantially identical to the Securities and the related Guarantees,
respectively (and are entitled to the benefits of a trust indenture which is
substantially identical to the Indenture or is the Indenture and which has been
qualified under the Trust Indenture Act), except that they have been registered
pursuant to an effective registration statement under the Securities Act and do
not contain provisions for the additional interest contemplated in Section 2(c)
below (such new debt securities hereinafter called "Exchange Securities"). The
Company agrees to use its best efforts to cause the Exchange Registration
Statement to become effective under the Securities Act as soon as practicable,
but no later than 180 days after the Acquisition Closing. The Exchange Offer
will be registered under the Securities Act on the appropriate form and will
comply with all applicable tender offer rules and regulations under the Exchange
Act. The Company further agrees to use its best efforts to commence and complete
the Exchange Offer promptly, but no later than 45 days after such registration
statement has become effective, hold the Exchange Offer open for at least 30
days and issue Exchange Securities for all Registrable Securities that have been
properly tendered and not withdrawn on or prior to the expiration of the
Exchange Offer. The Exchange Offer will be deemed to have been "completed" only
if the debt securities and related guarantees received by holders other than
Restricted Holders in the Exchange Offer for Registrable Securities are, upon
receipt, transferable by each such holder without need for further compliance
with Section 5 of the Securities Act and the Exchange Act (except for the
requirement to deliver a prospectus included in the Exchange Registration
Statement applicable to resales by broker-dealers of Exchange Securities
received by such broker-dealer pursuant to an Exchange Offer in exchange for
Registrable Securities other than those acquired by the broker-dealer directly
from the Company), and without material restrictions under the blue sky or
securities laws of a substantial majority of the States of the United States of
America. The Exchange Offer shall be deemed to have been completed upon the
earlier to occur of (i) the Company having exchanged the Exchange Securities for
all outstanding Registrable Securities pursuant to the Exchange Offer and
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<PAGE> 5
(ii) the Company having exchanged, pursuant to the Exchange Offer, Exchange
Securities for all Registrable Securities that have been properly tendered and
not withdrawn before the expiration of the Exchange Offer, which shall be on a
date that is at least 30 days following the commencement of the Exchange Offer.
The Company agrees (x) to include in the Exchange Registration Statement a
prospectus for use in connection with any resales of Exchange Securities by a
broker-dealer, other than resales of Exchange Securities received by a
broker-dealer pursuant to an Exchange Offer in exchange for Registrable
Securities acquired by the broker-dealer directly from the Company, and (y) to
keep such Exchange Registration Statement effective for a period (the "Resale
Period") beginning when Exchange Securities are first issued in the Exchange
Offer and ending upon the earlier of the expiration of the 90th day after the
Exchange Offer has been completed or such time as such broker-dealers no longer
own any Registrable Securities. With respect to such Exchange Registration
Statement, each broker-dealer that holds Exchange Securities received in an
Exchange Offer in exchange for Registerable Securities not acquired by it
directly from the Company shall have the benefit of the rights of
indemnification and contribution set forth in Sections 6(a), (c), (d) and (e)
hereof.
(b) If prior to the time the Exchange Offer is completed existing
Commission interpretations are changed such that the Securities or any related
Guarantees received by holders other than Restricted Holders in the Exchange
Offer for Registrable Securities are not or would not be, upon receipt,
transferable by each such holder without need for further compliance with
Section 5 of the Securities Act (except for the requirement to deliver a
prospectus included in the Exchange Registration Statement applicable to resales
by broker-dealers of Exchange Securities received by such broker-dealer pursuant
to an Exchange Offer in exchange for Registrable Securities other than those
acquired by the broker-dealer directly from the Company), in lieu of conducting
the Exchange Offer contemplated by Section 2(a) the Company shall file under the
Securities Act as soon as practicable, but no later than the later of 30 days
after the time such obligation to file arises and 60 days after the Acquisition
Closing, a "shelf" registration statement providing for the registration of, and
the sale on a continuous or delayed basis by the holders of, all of the
Registrable Securities, pursuant to Rule 415 or any similar rule that may be
adopted by the Commission (such filing, the "Shelf Registration" and such
registration statement, the "Shelf Registration Statement"). In addition, in the
event that the Purchasers shall not have resold all of the Securities initially
purchased by them from the Company pursuant to the Note Purchase Agreement prior
to the consummation of the Exchange Offer, the Company shall file under the
Securities Act as soon as practicable a Shelf Registration Statement. The
Company agrees to use its best efforts (i) to cause the Shelf Registration
Statement to become or be declared effective no later than 120 days after such
Shelf Registration Statement is filed and to keep such Shelf Registration
Statement continuously effective in order to permit the prospectus forming a
part thereof to be usable by holders for resales of Registrable Securities for a
period ending on the earlier of the third anniversary of the Effective Time or
such time as there are no longer any Registrable Securities outstanding,
provided, however, that no holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement or to use the prospectus
forming a part thereof for resales of Registrable Securities unless such holder
is an Electing Holder, and (ii) after the Effective Time of the Shelf
Registration Statement, promptly upon the request of any holder of Registrable
Securities that is not then an Electing Holder, to take any action reasonably
necessary to enable such holder to use the prospectus forming a part thereof for
resales of Registrable Securities, including, without limitation, any action
necessary to identify such holder as a selling securityholder in the Shelf
Registration Statement, provided, however, that nothing
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<PAGE> 6
in this Clause (ii) shall relieve any such holder of the obligation to return a
completed and signed Notice and Questionnaire to the Company in accordance with
Section 3(d)(iii) hereof. The Company further agrees to supplement or make
amendments to the Shelf Registration Statement, as and when required by the
rules, regulations or instructions applicable to the registration form used by
the Company for such Shelf Registration Statement or by the Securities Act or
rules and regulations thereunder for shelf registration, and the Company agrees
to furnish to each Electing Holder copies of any such supplement or amendment
prior to its being used or promptly following its filing with the Commission.
(c) In the event that (i) the Company has not filed the Exchange
Registration Statement or Shelf Registration Statement on or before the date on
which such registration statement is required to be filed pursuant to Section
2(a) or 2(b), respectively, or (ii) such Exchange Registration Statement or
Shelf Registration Statement has not become effective or been declared effective
by the Commission on or before the date on which such registration statement is
required to become or be declared effective pursuant to Section 2(a) or 2(b),
respectively, or (iii) the Exchange Offer has not been completed within 45 days
after the initial effective date of the Exchange Registration Statement relating
to the Exchange Offer (if the Exchange Offer is then required to be made) or
(iv) any Exchange Registration Statement or Shelf Registration Statement
required by Section 2(a) or 2(b) hereof is filed and declared effective but
shall thereafter either be withdrawn by the Company or shall become subject to
an effective stop order issued pursuant to Section 8(d) of the Securities Act
suspending the effectiveness of such registration statement (except as
specifically permitted herein) without being succeeded immediately by an
additional registration statement filed and declared effective (each such event
referred to in clauses (i) through (iv), a "Registration Default" and each
period during which a Registration Default has occurred and is continuing, a
"Registration Default Period"), then, as liquidated damages for such
Registration Default, subject to the provisions of Section 9(b), special
interest ("Special Interest"), in addition to the Base Interest, shall accrue at
a per annum rate of 0.25% for the first 90 days of the Registration Default
Period, at a per annum rate of 0.50% for the second 90 days of the Registration
Default Period, at a per annum rate of 0.75% for the third 90 days of the
Registration Default Period and at a per annum rate of 1.0% thereafter for the
remaining portion of the Registration Default Period.
(d) Each of Allied Parent and the Company shall take, and shall cause each
Guarantor to take, all reasonable actions necessary or advisable to be taken by
it to ensure that the transactions contemplated herein are effected as so
contemplated, including all reasonable actions necessary or desirable to
register the Guarantees under the registration statement contemplated in Section
2(a) or 2(b) hereof, as applicable.
(e) Any reference herein to a registration statement as of any time shall
be deemed to include any document incorporated, or deemed to be incorporated,
therein by reference as of such time and any reference herein to any
post-effective amendment to a registration statement as of any time shall be
deemed to include any document incorporated, or deemed to be incorporated,
therein by reference as of such time.
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<PAGE> 7
3. Registration Procedures.
If the Company files a registration statement pursuant to Section 2(a) or
Section 2(b), the following provisions shall apply:
(a) At or before the Effective Time of the Exchange Offer or the Shelf
Registration, as the case may be, the Company shall qualify the Indenture under
the Trust Indenture Act of 1939.
(b) In the event that such qualification would require the appointment of a
new trustee under the Indenture, the Company shall appoint a new trustee
thereunder pursuant to the applicable provisions of the Indenture.
(c) In connection with the Company's obligations with respect to the
registration of Exchange Securities as contemplated by Section 2(a) (the
"Exchange Registration"), if applicable, the Company shall, as soon as
practicable (or as otherwise specified):
(i) prepare and file with the Commission, as soon as practicable but no
later than 60 days after the Acquisition Closing, an Exchange Registration
Statement on any form which may be utilized by the Company and which shall
permit the Exchange Offer and resales of Exchange Securities by
broker-dealers during the Resale Period to be effected as contemplated by
Section 2(a), and use its best efforts to cause such Exchange Registration
Statement to become effective as soon as practicable thereafter, but no
later than 180 days after the Acquisition Closing;
(ii) as soon as practicable prepare and file with the Commission such
amendments and supplements to such Exchange Registration Statement and the
prospectus included therein as may be necessary to effect and maintain the
effectiveness of such Exchange Registration Statement for the periods and
purposes contemplated in Section 2(a) hereof and as may be required by the
applicable rules and regulations of the Commission and the instructions
applicable to the form of such Exchange Registration Statement, and
promptly provide each broker-dealer holding Exchange Securities with such
number of copies of the prospectus included therein (as then amended or
supplemented), in conformity in all material respects with the requirements
of the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder, as such broker-dealer reasonably
may request prior to the expiration of the Resale Period, for use in
connection with resales of Exchange Securities;
(iii) promptly notify each broker-dealer that has requested or received
copies of the prospectus included in such registration statement, and
confirm such advice in writing, (A) when such Exchange Registration
Statement or the prospectus included therein or any prospectus amendment or
supplement or post-effective amendment has been filed, and, with respect to
such Exchange Registration Statement or any post-effective amendment, when
the same has become effective, (B) of any comments by the Commission and by
the blue sky or securities commissioner or regulator of any state with
respect thereto or any request by the Commission for amendments or
supplements to such Exchange Registration Statement or prospectus or for
additional information, (C) of the issuance by the Commission of any stop
order suspending the effectiveness of such Exchange Registration Statement
or the initiation
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<PAGE> 8
or threatening of any proceedings for that purpose, (D) if at any time the
representations and warranties of the Company contemplated by Section 5
cease to be true and correct in all material respects, (E) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Exchange Securities for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose, or (F) at
any time during the Resale Period when a prospectus is required to be
delivered under the Securities Act, that such Exchange Registration
Statement, prospectus, prospectus amendment or supplement or post-effective
amendment does not conform in all material respects to the applicable
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder or contains an untrue
statement of a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
(iv) in the event that the Company would be required, pursuant to
Section 3(e)(iii)(F) above, to notify any broker-dealers holding Exchange
Securities, without unreasonable delay prepare and furnish to each such
holder a reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to purchasers of such Exchange
Securities during the Resale Period, such prospectus shall conform in all
material respects to the applicable requirements of the Securities Act and
the Trust Indenture Act and the rules and regulations of the Commission
thereunder and shall not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances
then existing;
(v) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of such Exchange Registration Statement
or any post-effective amendment thereto at the earliest practicable date;
(vi) use its reasonable best efforts to (A) register or qualify the
Exchange Securities under the securities laws or blue sky laws of such
jurisdictions as are contemplated by Section 2(a) no later than the
commencement of the Exchange Offer, (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions
until the expiration of the Resale Period and (C) take any and all other
actions as may be reasonably necessary or advisable to enable each
broker-dealer holding Exchange Securities to consummate the disposition
thereof in such jurisdictions; provided, however, that neither the Company
nor any Guarantor shall be required for any such purpose to (1) qualify as
a foreign corporation in any jurisdiction wherein it would not otherwise be
required to qualify but for the requirements of this Section 3(c)(vi), (2)
consent to general service of process in any such jurisdiction or (3) make
any changes to its certificate of incorporation or by-laws or any agreement
between it and its stockholders;
(vii) use its reasonable best efforts to obtain the consent or approval
of each governmental agency or authority, whether federal, state or local,
which may be required to effect the Exchange Registration, the Exchange
Offer and the offering and sale of Exchange Securities by broker-dealers
during the Resale Period;
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<PAGE> 9
(viii) provide a CUSIP number for all Exchange Securities, not later
than the applicable Effective Time;
(ix) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders as soon as
practicable but no later than eighteen months after the effective date of
such Exchange Registration Statement, an earning statement of the Company
and its subsidiaries complying with Section 11(a) of the Securities Act
(including, at the option of the Company, Rule 158 thereunder).
(d) In connection with the Company's obligations with respect to the Shelf
Registration, if applicable, the Company shall, as soon as practicable (or as
otherwise specified):
(i) prepare and file with the Commission, as soon as practicable but in
any case within the time periods specified in Section 2(b), a Shelf
Registration Statement on any form which may be utilized by the Company and
which shall register all of the Registrable Securities for resale by the
holders thereof in accordance with such method or methods of disposition as
may be specified by such of the holders as, from time to time, may be
Electing Holders and use its reasonable best efforts to cause such Shelf
Registration Statement to become effective as soon as practicable but in
any case within the time periods specified in Section 2(b);
(ii) not less than 30 calendar days prior to the Effective Time of the
Shelf Registration Statement, mail the Notice and Questionnaire to the
holders of Registrable Securities; no holder shall be entitled to be named
as a selling securityholder in the Shelf Registration Statement as of the
Effective Time, and no holder shall be entitled to use the prospectus
forming a part thereof for resales of Registrable Securities at any time,
unless such holder has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for response set forth
therein; provided, however, holders of Registrable Securities shall have at
least 28 calendar days from the date on which the Notice and Questionnaire
is first mailed to such holders to return a completed and signed Notice and
Questionnaire to the Company;
(iii) after the Effective Time of the Shelf Registration Statement,
upon the request of any holder of Registrable Securities that is not then
an Electing Holder, promptly send a Notice and Questionnaire to such
holder; provided that the Company shall not be required to take any action
to name such holder as a selling securityholder in the Shelf Registration
Statement or to enable such holder to use the prospectus forming a part
thereof for resales of Registrable Securities until such holder has
returned a completed and signed Notice and Questionnaire to the Company;
(iv) as soon as practicable prepare and file with the Commission such
amendments and supplements to such Shelf Registration Statement and the
prospectus included therein as may be necessary to effect and maintain the
effectiveness of such Shelf Registration Statement for the period specified
in Section 2(b) hereof and as may be required by the applicable rules and
regulations of the Commission and the instructions applicable to the form
of such Shelf Registration Statement, and furnish to the Electing Holders
copies of any such supplement or amendment simultaneously with or prior to
its being used or filed with the Commission;
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<PAGE> 10
(v) comply with the provisions of the Securities Act with respect to
the disposition of all of the Registrable Securities covered by such Shelf
Registration Statement in accordance with the intended methods of
disposition by the Electing Holders provided for in such Shelf Registration
Statement;
(vi) provide (A) the Electing Holders, (B) the underwriters (which
term, for purposes of this Exchange and Registration Rights Agreement,
shall include a person deemed to be an underwriter within the meaning of
Section 2(11) of the Securities Act), if any, thereof, (C) any sales or
placement agent therefor, (D) counsel for any such underwriter or agent and
(E) not more than one counsel for all the Electing Holders the opportunity
to participate in the preparation of such Shelf Registration Statement,
each prospectus included therein or filed with the Commission and each
amendment or supplement thereto;
(vii) for a reasonable period prior to the filing of such Shelf
Registration Statement, and throughout the period specified in Section
2(b), make available at reasonable times at the Company's principal place
of business or such other reasonable place for inspection by the persons
referred to in Section 3(d)(vi) who shall certify to the Company that they
have a current intention to sell the Registrable Securities pursuant to the
Shelf Registration such financial and other information and books and
records of the Company, and cause the officers, employees, counsel and
independent certified public accountants of the Company to respond to such
inquiries, as shall be reasonably necessary, in the judgment of the
respective counsel referred to in such Section, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
provided, however, that each such party shall be required to maintain in
confidence and not to disclose to any other person any information or
records reasonably designated by the Company as being confidential, until
such time as (A) such information becomes a matter of public record
(whether by virtue of its inclusion in such registration statement or
otherwise), or (B) such person shall be required so to disclose such
information pursuant to a subpoena or order of any court or other
governmental agency or body having jurisdiction over the matter (subject to
the requirements of such order, and only after such person shall have given
the Company prompt prior written notice of such requirement), or (C) such
information is required to be set forth in such Shelf Registration
Statement or the prospectus included therein or in an amendment to such
Shelf Registration Statement or an amendment or supplement to such
prospectus in order that such Shelf Registration Statement, prospectus,
amendment or supplement, as the case may be, complies with applicable
requirements of the federal securities laws and the rules and regulations
of the Commission and does not contain an untrue statement of a material
fact or omit to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing;
(viii) promptly notify each of the Electing Holders, any sales or
placement agent therefor and any underwriter thereof (which notification
may be made through any managing underwriter that is a representative of
such underwriter for such purpose) and confirm such advice in writing, (A)
when such Shelf Registration Statement or the prospectus included therein
or any prospectus amendment or supplement or post-effective amendment has
been filed, and, with respect to such Shelf Registration Statement or any
post-effective amendment, when the same has become effective, (B) of any
comments by the Commission and by the blue sky or securities commissioner
or regulator of any state with respect thereto or any
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<PAGE> 11
request by the Commission for amendments or supplements to such Shelf
Registration Statement or prospectus or for additional information, (C) of
the issuance by the Commission of any stop order suspending the
effectiveness of such Shelf Registration Statement or the initiation or
threatening of any proceedings for that purpose, (D) if at any time the
representations and warranties of the Company contemplated by Section
3(d)(xvii) or Section 5 cease to be true and correct in all material
respects, (E) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, or (F) if at any time when a prospectus is
required to be delivered under the Securities Act, such Shelf Registration
Statement, prospectus, prospectus amendment or supplement or post-effective
amendment does not conform in all material respects to the applicable
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder or contains an untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
(ix) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of such registration statement or any
post-effective amendment thereto at the earliest practicable date;
(x) if requested by any managing underwriter or underwriters, any
placement or sales agent or any Electing Holder, promptly incorporate in a
prospectus supplement or post-effective amendment such information as is
required by the applicable rules and regulations of the Commission and as
such managing underwriter or underwriters, such agent or such Electing
Holder specifies should be included therein relating to the terms of the
sale of such Registrable Securities, including information with respect to
the principal amount of Registrable Securities being sold by such Electing
Holder or agent or to any underwriters, the name and description of such
Electing Holder, agent or underwriter, the offering price of such
Registrable Securities and any discount, commission or other compensation
payable in respect thereof, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the offering of the
Registrable Securities to be sold by such Electing Holder or agent or to
such underwriters; and make all required filings of such prospectus
supplement or post-effective amendment promptly after notification of the
matters to be incorporated in such prospectus supplement or post-effective
amendment;
(xi) furnish to each Electing Holder, each placement or sales agent, if
any, therefor, each underwriter, if any, thereof and the respective counsel
referred to in Section 3(d)(vi) an executed copy (or, in the case of an
Electing Holder, a conformed copy) of such Shelf Registration Statement,
each such amendment and supplement thereto (in each case including all
exhibits thereto (in the case of an Electing Holder of Registrable
Securities, upon request) and documents incorporated by reference therein)
and such number of copies of such Shelf Registration Statement (excluding
exhibits thereto and documents incorporated by reference therein unless
specifically so requested by such Electing Holder, agent or underwriter, as
the case may be) and of the prospectus included in such Shelf Registration
Statement (including each preliminary prospectus and any summary
prospectus), in conformity in all material respects with the applicable
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder, and such other
documents, as
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such Electing Holder, agent, if any, and underwriter, if any, may
reasonably request in order to facilitate the offering and disposition of
the Registrable Securities owned by such Electing Holder, offered or sold
by such agent or underwritten by such underwriter and to permit such
Electing Holder, agent and underwriter to satisfy the prospectus delivery
requirements of the Securities Act; and the Company hereby consents to the
use of such prospectus (including such preliminary and summary prospectus)
and any amendment or supplement thereto by each such Electing Holder and by
any such agent and underwriter, in each case in the form most recently
provided to such person by the Company, in connection with the offering and
sale of the Registrable Securities covered by the prospectus (including
such preliminary and summary prospectus) or any supplement or amendment
thereto;
(xii) use its reasonable best efforts to (A) register or qualify the
Registrable Securities to be included in such Shelf Registration Statement
under such securities laws or blue sky laws of such jurisdictions as any
Electing Holder and each placement or sales agent, if any, therefor and
underwriter, if any, thereof shall reasonably request, (B) keep such
registrations or qualifications in effect and comply with such laws so as
to permit the continuance of offers, sales and dealings therein in such
jurisdictions during the period the Shelf Registration is required to
remain effective under Section 2(b) above and for so long as may be
necessary to enable any such Electing Holder, agent or underwriter to
complete its distribution of Securities pursuant to such Shelf Registration
Statement and (C) take any and all other actions as may be reasonably
necessary or advisable to enable each such Electing Holder, agent, if any,
and underwriter, if any, to consummate the disposition in such
jurisdictions of such Registrable Securities; provided, however, that
neither the Company nor any Guarantor shall be required for any such
purpose to (1) qualify as a foreign corporation in any jurisdiction wherein
it would not otherwise be required to qualify but for the requirements of
this Section 3(d)(xii), (2) consent to general service of process in any
such jurisdiction or (3) make any changes to its certificate of
incorporation or by-laws or any agreement between it and its stockholders;
(xiii) use its reasonable best efforts to obtain the consent or
approval of each governmental agency or authority, whether federal, state
or local, which may be required to effect the Shelf Registration or the
offering or sale in connection therewith or to enable the selling holder or
holders to offer, or to consummate the disposition of, their Registrable
Securities;
(xiv) cooperate with the Electing Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold, which
certificates shall be printed, lithographed or engraved, or produced by any
combination of such methods, and which shall not bear any restrictive
legends; and, in the case of an underwritten offering, enable such
Registrable Securities to be in such denominations and registered in such
names as the managing underwriters may request at least two business days
prior to any sale of the Registrable Securities;
(xv) provide a CUSIP number for all Registrable Securities, not later
than the applicable Effective Time;
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<PAGE> 13
(xvi) enter into one or more underwriting agreements, engagement
letters, agency agreements, "best efforts" underwriting agreements or
similar agreements, as appropriate, including customary provisions relating
to indemnification and contribution, and take such other actions in
connection therewith as any Electing Holders aggregating at least 20% in
aggregate principal amount of the Registrable Securities at the time
outstanding shall reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;
(xvii) whether or not an agreement of the type referred to in Section
3(d)(xvi) hereof is entered into and whether or not any portion of the
offering contemplated by the Shelf Registration is an underwritten offering
or is made through a placement or sales agent or any other entity, (A) make
such representations and warranties to the Electing Holders and the
placement or sales agent, if any, therefor and the underwriters, if any,
thereof in form, substance and scope as are customarily made in connection
with an offering of debt securities pursuant to any appropriate agreement
or to a registration statement filed on the form applicable to the Shelf
Registration; (B) obtain an opinion of counsel to the Company in customary
form and covering such matters, of the type customarily covered by such an
opinion, as the managing underwriters, if any, or as any Electing Holders
of at least 20% in aggregate principal amount of the Registrable Securities
at the time outstanding may reasonably request, addressed to such Electing
Holder or Electing Holders and the placement or sales agent, if any,
therefor and the underwriters, if any, thereof and dated the effective date
of such Shelf Registration Statement (and if such Shelf Registration
Statement contemplates an underwritten offering of a part or all of the
Registrable Securities, dated the date of the closing under the
underwriting agreement relating thereto) (it being agreed that the matters
to be covered by such opinion shall include the due incorporation and good
standing of the Company and its subsidiaries; the qualification of the
Company and its subsidiaries to transact business as foreign corporations;
the due authorization, execution and delivery of the relevant agreement of
the type referred to in Section 3(d)(xvi) hereof; the due authorization,
execution, authentication and issuance, and the validity and
enforceability, of the Securities; the absence of material legal or
governmental proceedings involving the Company; the absence of a breach by
the Company or any of its subsidiaries of, or a default under, material
agreements binding upon the Company or any subsidiary of the Company; the
absence of governmental approvals required to be obtained in connection
with the Shelf Registration, the offering and sale of the Registrable
Securities, this Exchange and Registration Rights Agreement or any
agreement of the type referred to in Section 3(d)(xvi) hereof, except such
approvals as may be required under state securities or blue sky laws; the
material compliance as to form of such Shelf Registration Statement and any
documents incorporated by reference therein and of the Indenture with the
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder, respectively; and, as
of the date of the opinion and of the Shelf Registration Statement or most
recent post-effective amendment thereto, as the case may be, the absence
from such Shelf Registration Statement and the prospectus included therein,
as then amended or supplemented, and from the documents incorporated by
reference therein (in each case other than the financial statements and
other financial information contained therein) of an untrue statement of a
material fact or the omission to state therein a material fact necessary to
make the statements therein not misleading (in the case of such documents,
in the light of the circumstances existing at the time that such documents
were filed with the Commission under
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<PAGE> 14
the Exchange Act)); (C) obtain a "cold comfort" letter or letters from the
independent certified public accountants of the Company addressed to the
selling Electing Holders, the placement or sales agent, if any, therefor or
the underwriters, if any, thereof, dated (i) the effective date of such
Shelf Registration Statement and (ii) the effective date of any prospectus
supplement to the prospectus included in such Shelf Registration Statement
or post-effective amendment to such Shelf Registration Statement which
includes unaudited or audited financial statements as of a date or for a
period subsequent to that of the latest such statements included in such
prospectus (and, if such Shelf Registration Statement contemplates an
underwritten offering pursuant to any prospectus supplement to the
prospectus included in such Shelf Registration Statement or post-effective
amendment to such Shelf Registration Statement which includes unaudited or
audited financial statements as of a date or for a period subsequent to
that of the latest such statements included in such prospectus, dated the
date of the closing under the underwriting agreement relating thereto),
such letter or letters to be in customary form and covering such matters of
the type customarily covered by letters of such type; (D) deliver such
documents and certificates, including officers' certificates, as may be
reasonably requested by any Electing Holders of at least 20% in aggregate
principal amount of the Registrable Securities at the time outstanding or
the placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof to evidence the accuracy of the
representations and warranties made pursuant to clause (A) above or those
contained in Section 5(a) hereof and the compliance with or satisfaction of
any agreements or conditions contained in the underwriting agreement or
other agreement entered into by the Company or any Guarantor; and (E)
undertake such obligations relating to expense reimbursement,
indemnification and contribution as are provided in Section 6 hereof;
(xviii) notify in writing each holder of Registrable Securities of any
proposal by the Company to amend or waive any provision of this Exchange
and Registration Rights Agreement pursuant to Section 9(h) hereof and of
any amendment or waiver effected pursuant thereto, each of which notices
shall contain the text of the amendment or waiver proposed or effected, as
the case may be;
(xix) in the event that any broker-dealer registered under the Exchange
Act shall underwrite any Registrable Securities or participate as a member
of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Rules of Fair Practice and the
By-Laws of the National Association of Securities Dealers, Inc. ("NASD") or
any successor thereto, as amended from time to time) thereof, whether as a
holder of such Registrable Securities or as an underwriter, a placement or
sales agent or a broker or dealer in respect thereof, or otherwise, assist
such broker-dealer in complying with the requirements of such Rules and
By-Laws, including by (A) if such Rules or By-Laws shall so require,
engaging a "qualified independent underwriter" (as defined in such Schedule
(or any successor thereto)) to participate in the preparation of the Shelf
Registration Statement relating to such Registrable Securities, to exercise
usual standards of due diligence in respect thereto and, if any portion of
the offering contemplated by such Shelf Registration Statement is an
underwritten offering or is made through a placement or sales agent, to
recommend the yield of such Registrable Securities, (B) indemnifying any
such qualified independent underwriter to the extent of the indemnification
of underwriters provided in Section 6 hereof (or to such other customary
extent as may be requested by such underwriter), and (C) providing such
information to such broker-dealer as may be required in order for such
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<PAGE> 15
broker-dealer to comply with the requirements of the Rules of Fair Practice
of the NASD; and
(xx) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders as soon as
practicable but in any event not later than eighteen months after the
effective date of such Shelf Registration Statement, an earning statement
of the Company and its subsidiaries complying with Section 11(a) of the
Securities Act (including, at the option of the Company, Rule 158
thereunder).
(e) In the event that the Company would be required, pursuant to Section
3(d)(viii)(F) above, to notify the Electing Holders, the placement or sales
agent, if any, therefor and the managing underwriters, if any, thereof, the
Company shall without delay prepare and furnish to each of the Electing Holders,
to each placement or sales agent, if any, and to each such underwriter, if any,
a reasonable number of copies of a prospectus supplemented or amended so that,
as thereafter delivered to purchasers of Registrable Securities, such prospectus
shall conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances then
existing. Each Electing Holder agrees that upon receipt of any notice from the
Company pursuant to Section 3(d)(viii)(F) hereof, such Electing Holder shall
forthwith discontinue the disposition of Registrable Securities pursuant to the
Shelf Registration Statement applicable to such Registrable Securities until
such Electing Holder shall have received copies of such amended or supplemented
prospectus, and if so directed by the Company, such Electing Holder shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Electing Holder's possession of the
prospectus covering such Registrable Securities at the time of receipt of such
notice.
(f) In the event of a Shelf Registration, in addition to the information
required to be provided by each Electing Holder in its Notice Questionnaire, the
Company may require such Electing Holder to furnish to the Company such
additional information regarding such Electing Holder and such Electing Holder's
intended method of distribution of Registrable Securities as may be required in
order to comply with the Securities Act. Each such Electing Holder agrees to
notify the Company as promptly as practicable of any inaccuracy or change in
information previously furnished by such Electing Holder to the Company or of
the occurrence of any event in either case as a result of which any prospectus
relating to such Shelf Registration contains or would contain an untrue
statement of a material fact regarding such Electing Holder or such Electing
Holder's intended method of disposition of such Registrable Securities or omits
to state any material fact regarding such Electing Holder or such Electing
Holder's intended method of disposition of such Registrable Securities required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing, and promptly to furnish to the
Company any additional information required to correct and update any previously
furnished information or required so that such prospectus shall not contain,
with respect to such Electing Holder or the disposition of such Registrable
Securities, an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing.
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<PAGE> 16
(g) Until the expiration of three years after the Acquisition Closing, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144) to, resell any of the Securities that have been reacquired by any of
them except pursuant to an effective registration statement under the Securities
Act.
4. Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company's performance of or compliance with this
Exchange and Registration Rights Agreement, including (a) all Commission and any
NASD registration, filing and review fees and expenses including fees and
disbursements of counsel for the placement or sales agent or underwriters in
connection with such registration, filing and review, (b) all fees and expenses
in connection with the qualification of the Securities for offering and sale
under the State securities and blue sky laws referred to in Section 3(d)(xii)
hereof and determination of their eligibility for investment under the laws of
such jurisdictions as any managing underwriters or the Electing Holders may
designate, including any fees and disbursements of counsel for the Electing
Holders (subject to the limitations of Clause (i) below) or underwriters in
connection with such qualification and determination, (c) all expenses relating
to the preparation, printing, production, distribution and reproduction of each
registration statement required to be filed hereunder, each prospectus included
therein or prepared for distribution pursuant hereto, each amendment or
supplement to the foregoing, the expenses of preparing the Securities for
delivery and the expenses of printing or producing any underwriting agreements,
agreements among underwriters, selling agreements and blue sky or legal
investment memoranda and all other documents in connection with the offering,
sale or delivery of Securities to be disposed of (including certificates
representing the Securities), (d) messenger, telephone and delivery expenses
relating to the offering, sale or delivery of Securities and the preparation of
documents referred in clause (c) above, (e) fees and expenses of the Trustee
under the Indenture, any agent of the Trustee and any counsel for the Trustee
and of any collateral agent or custodian, (f) internal expenses (including all
salaries and expenses of the Company's officers and employees performing legal
or accounting duties), (g) fees, disbursements and expenses of counsel and
independent certified public accountants of the Company (including the expenses
of any opinions or "cold comfort" letters required by or incident to such
performance and compliance), (h) fees, disbursements and expenses of any
"qualified independent underwriter" engaged pursuant to Section 3(d)(xix)
hereof, (i) fees, disbursements and expenses of one counsel for the Electing
Holders retained in connection with a Shelf Registration, as selected by the
Electing Holders of at least a majority in aggregate principal amount of the
Registrable Securities held by Electing Holders (which counsel shall be
reasonably satisfactory to the Company), (j) any fees charged by securities
rating services for rating the Securities, and (k) fees, expenses and
disbursements of any other persons, including special experts, retained by the
Company in connection with such registration (collectively, the "Registration
Expenses"). To the extent that any Registration Expenses are incurred, assumed
or paid by any holder of Registrable Securities or any placement or sales agent
therefor or underwriter thereof, the Company shall reimburse such person for the
full amount of the Registration Expenses so incurred, assumed or paid promptly
after receipt of a request therefor. Notwithstanding the foregoing, the holders
of the Registrable Securities being registered shall pay all agency fees and
commissions and underwriting discounts and commissions attributable to the sale
of such Registrable Securities and the fees and disbursements of any
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<PAGE> 17
counsel or other advisors or experts retained by such holders (severally or
jointly), other than the counsel and experts specifically referred to above.
5. Representations and Warranties.
The Company represents and warrants to, and agrees with, each Purchaser and
each of the holders from time to time of Registrable Securities that:
(a) Each registration statement covering Registrable Securities and
each prospectus (including any preliminary or summary prospectus) contained
therein or furnished pursuant to Section 3(d) or Section 3(c) hereof and
any further amendments or supplements to any such registration statement or
prospectus, when it becomes effective or is filed with the Commission, as
the case may be, and, in the case of an underwritten offering of
Registrable Securities, at the time of the closing under the underwriting
agreement relating thereto, will conform in all material respects to the
applicable requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and at all times subsequent to the Effective Time
when a prospectus would be required to be delivered under the Securities
Act, other than from (i) such time as a notice has been given to holders of
Registrable Securities pursuant to Section 3(d)(viii)(F) or Section
3(c)(iii)(F) hereof until (ii) such time as the Company furnishes an
amended or supplemented prospectus pursuant to Section 3(e) or Section
3(c)(iv) hereof, each such registration statement, and each prospectus
(including any summary prospectus) contained therein or furnished pursuant
to Section 3(d) or Section 3(c) hereof, as then amended or supplemented,
will conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and regulations of
the Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing; 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 holder of Registrable Securities expressly for
use therein.
(b) Any documents incorporated by reference in any prospectus referred
to in Section 5(a) hereof, when they become or became effective or are or
were filed with the Commission, as the case may be, will conform or
conformed in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and none of such documents will
contain or contained an untrue statement of a material fact or will omit or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by a holder of Registrable Securities expressly for
use therein.
(c) The compliance by the Company with all of the provisions of this
Exchange and Registration Rights Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement
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<PAGE> 18
or instrument to which the Company or any subsidiary of the Company is a
party or by which the Company or any subsidiary of the Company is bound or
to which any of the property or assets of the Company or any subsidiary of
the Company is subject, nor will such action result in any violation of the
provisions of the certificate of incorporation, as amended, or the by-laws
of the Company or any Guarantor or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any subsidiary of the Company or any of their
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the consummation by the Company and the Guarantors of the
transactions contemplated by this Exchange and Registration Rights
Agreement, except the registration under the Securities Act of the
Securities, qualification of the Indenture under the Trust Indenture Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under State securities or blue sky laws
in connection with the offering and distribution of the Securities.
(d) This Exchange and Registration Rights Agreement has been duly
authorized, executed and delivered by the Company.
6. Indemnification.
(a) Indemnification by the Company. The Company shall indemnify and hold
harmless each of the holders of Registrable Securities included in an Exchange
Registration Statement, each of the Electing Holders of Registrable Securities
included in a Shelf Registration Statement and each person who participates as a
placement or sales agent or as an underwriter in any offering or sale of such
Registrable Securities against any losses, claims, damages or liabilities, joint
or several, to which such holder, agent or underwriter may become subject under
the Securities 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
Exchange Registration Statement or Shelf Registration Statement, as the case may
be, under which such Registrable Securities were registered under the Securities
Act, or any preliminary, final or summary prospectus contained therein or
furnished by the Company to any such holder, Electing Holder, agent or
underwriter, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and the Company shall, and it hereby agrees to, reimburse such
holder, such Electing Holder, such agent and such underwriter for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable to any such person 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 such registration statement, or preliminary, final or
summary prospectus, or amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by such person
expressly for use therein;
(b) Indemnification by the Holders and any Agents and Underwriters. The
Company may require, as a condition to including any Registrable Securities in
any registration statement filed pursuant to Section 2(b) hereof and to entering
into any underwriting agreement with respect
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<PAGE> 19
thereto, that the Company shall have received an undertaking reasonably
satisfactory to it from the Electing Holder of such Registrable Securities and
from each underwriter named in any such underwriting agreement, severally and
not jointly, to (i) indemnify and hold harmless the Company, and all other
holders of Registrable Securities, against any losses, claims, damages or
liabilities to which the Company or such other holders of Registrable Securities
may become subject, under the Securities 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 such registration statement, or any preliminary,
final or summary prospectus contained therein or furnished by the Company to any
such Electing Holder, agent or underwriter, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Electing Holder or underwriter
expressly for use therein, and (ii) reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that no such Electing Holder shall be required to undertake liability
to any person under this Section 6(b) for any amounts in excess of the dollar
amount of the proceeds to be received by such Electing Holder from the sale of
such Electing Holder's Registrable Securities pursuant to such registration.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of written notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 6, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party other than under the indemnification provisions of or
contemplated by Section 6(a) or 6(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such 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 reasonably 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, such indemnifying party shall
not be liable to such indemnified party 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 or claim) 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.
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<PAGE> 20
(d) Contribution. If for any reason the indemnification provisions
contemplated by Section 6(a) or Section 6(b) are unavailable to or insufficient
to hold harmless an indemnified party 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 fault of the indemnifying party and the indemnified party 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 fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 6(d) were determined by
pro rata allocation (even if the holders or any agents or underwriters or all of
them were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 6(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 shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no holder shall be required to contribute any
amount in excess of the amount by which the dollar amount of the proceeds
received by such holder from the sale of any Registrable Securities (after
deducting any fees, discounts and commissions applicable thereto) exceeds the
amount of any damages which such holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission, and no underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The holders' and any underwriters' obligations in this
Section 6(d) to contribute shall be several in proportion to the principal
amount of Registrable Securities registered or underwritten, as the case may be,
by them and not joint.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of
each holder, agent and underwriter and each person, if any, who controls any
holder, agent or underwriter within the meaning of the Securities Act; and the
obligations of the holders and any agents or underwriters contemplated by this
Section 6 shall be in addition to any liability which the respective holder,
agent or underwriter may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company (including any
person who, with his consent, is named in any registration statement as about to
become a director of the Company) and to each person, if any, who controls the
Company within the meaning of the Securities Act.
-20-
<PAGE> 21
7. Underwritten Offerings.
(a) Selection of Underwriters. If any of the Registrable Securities covered
by the Shelf Registration are to be sold pursuant to an underwritten offering,
the managing underwriter or underwriters thereof shall be designated by Electing
Holders holding at least a majority in aggregate principal amount of the
Registrable Securities to be included in such offering, provided that such
designated managing underwriter or underwriters is or are reasonably acceptable
to the Company.
(b) Participation by Holders. Each holder of Registrable Securities hereby
agrees with each other such holder that no such holder may participate in any
underwritten offering hereunder unless such holder (i) agrees to sell such
holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
8. Rule 144.
The Company covenants to the holders of Registrable Securities that to the
extent it shall be required to do so under the Exchange Act, the Company shall
timely file the reports required to be filed by it under the Exchange Act or the
Securities Act (including the reports under Section 13 and 15(d) of the Exchange
Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission
under the Securities Act) and the rules and regulations adopted by the
Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission. Upon the request of any holder of Registrable Securities in
connection with that holder's sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it has complied with
such requirements.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company represents, warrants, covenants
and agrees that it has not granted, and shall not grant, registration rights
with respect to Registrable Securities or any other securities which would be
inconsistent with the terms contained in this Exchange and Registration Rights
Agreement.
(b) Specific Performance. The parties hereto acknowledge that there would
be no adequate remedy at law if the Company or Allied Parent fails to perform
any of their respective obligations hereunder and that the Purchasers and the
holders from time to time of the Registrable Securities may be irreparably
harmed by any such failure, and accordingly agree that the Purchasers and such
holders, in addition to any other remedy to which they may be entitled at law or
in equity, shall be entitled to compel specific performance of the respective
obligations of the Company and Allied Parent under this Exchange and
Registration Rights Agreement in accordance with the
-21-
<PAGE> 22
terms and conditions of this Exchange and Registration Rights Agreement, in any
court of the United States or any State thereof having jurisdiction.
(c) Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, if delivered personally or by courier, or
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows: If to the Company, to it
at 7201 E. Camelback Road, Suite 375, Scottsdale, AZ 85251, Attention: Vice
President - Chief Financial Officer, with a copy to Porter & Hedges, LLP, 700
Louisiana, 35th Floor, Houston, TX 77002-2764, Attention: Robert G. Reedy, and
if to a holder, to the address of such holder set forth in the security register
or other records of the Company, or to such other address as the Company or any
such holder may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
(d) Parties in Interest. All the terms and provisions of this Exchange and
Registration Rights Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the parties hereto and the holders from time to
time of the Registrable Securities and the respective successors and assigns of
the parties hereto and such holders. In the event that any transferee of any
holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be deemed a
beneficiary hereof for all purposes and such Registrable Securities shall be
held subject to all of the terms of this Exchange and Registration Rights
Agreement, and by taking and holding such Registrable Securities such transferee
shall be entitled to receive the benefits of, and be conclusively deemed to have
agreed to be bound by all of the applicable terms and provisions of this
Exchange and Registration Rights Agreement. If the Company shall so request, any
such successor, assign or transferee shall agree in writing to acquire and hold
the Registrable Securities subject to all of the applicable terms hereof.
(e) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Exchange and Registration
Rights Agreement or made pursuant hereto shall remain in full force and effect
regardless of any investigation (or statement as to the results thereof) made by
or on behalf of any holder of Registrable Securities, any director, officer or
partner of such holder, any agent or underwriter or any director, officer or
partner thereof, or any controlling person of any of the foregoing, and shall
survive delivery of and payment for the Registrable Securities pursuant to the
Note Purchase Agreement and the transfer and registration of Registrable
Securities by such holder and the consummation of an Exchange Offer.
(f) LAW GOVERNING. THIS EXCHANGE AND REGISTRATION RIGHTS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
(g) Headings. The descriptive headings of the several Sections and
paragraphs of this Exchange and Registration Rights Agreement are inserted for
convenience only, do not constitute a part of this Exchange and Registration
Rights Agreement and shall not affect in any way the meaning or interpretation
of this Exchange and Registration Rights Agreement.
-22-
<PAGE> 23
(h) Entire Agreement; Amendments. This Exchange and Registration Rights
Agreement and the other writings referred to herein (including the Indenture and
the form of Securities) or delivered pursuant hereto which form a part hereof
contain the entire understanding of the parties with respect to its subject
matter. This Exchange and Registration Rights Agreement supersedes all prior
agreements and understandings between the parties with respect to its subject
matter. This Exchange and Registration Rights Agreement may be amended and the
observance of any term of this Exchange and Registration Rights Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company and the
holders of at least a majority in aggregate principal amount of the Registrable
Securities at the time outstanding. Each holder of any Registrable Securities at
the time or thereafter outstanding shall be bound by any amendment or waiver
effected pursuant to this Section 9(h), whether or not any notice, writing or
marking indicating such amendment or waiver appears on such Registrable
Securities or is delivered to such holder.
(i) Inspection. For so long as this Exchange and Registration Rights
Agreement shall be in effect, this Exchange and Registration Rights Agreement
and a complete list of the names and addresses of all the holders of Registrable
Securities shall be made available for inspection and copying on any business
day by any holder of Registrable Securities for proper purposes only (which
shall include any purpose related to the rights of the holders of Registrable
Securities under the Securities, the Indenture and this Agreement) at the
offices of the Company at the address thereof set forth in Section 9(c) above
and at the office of the Trustee under the Indenture.
(j) Counterparts. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
Agreed to and accepted as of the date referred to above.
ALLIED WASTE NORTH AMERICA, INC.
By: /s/ Henry L. Hirvela
-------------------------------
Name: Henry L. Hirvela
Title: Executive Vice President
By:/s/ Roger A. Ramsey
-------------------------------
Name: Roger A. Ramsey
Title: Chief Executive Officer
-23-
<PAGE> 24
ALLIED WASTE INDUSTRIES, INC.
By: /s/ Henry L. Hirvela
------------------------------
Name: Henry L. Hirvela
Title: Vice President
By:/s/ Roger A. Ramsey
-----------------------------
Name: Roger A. Ramsey
Title: Chief Executive Officer
GOLDMAN, SACHS & CO.
CITICORP SECURITIES, INC.
CS FIRST BOSTON CORPORATION
As Representatives of the several
Purchasers
By:/s/ Goldman, Sachs & Co.
------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Purchasers
-24-
<PAGE> 25
Exhibit A
ALLIED WASTE NORTH AMERICA, INC.
INSTRUCTION TO DTC PARTICIPANTS
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: [DATE]*
The Depository Trust Company ("DTC") has identified you as a DTC
Participant through which beneficial interests in the Allied Waste North
America, Inc. (the "Company") 10 1/4% Senior Subordinated Notes due 2006 (the
"Securities") are held.
The Company is in the process of registering the Securities under the
Securities Act of 1933 for resale by the beneficial owners thereof. In order to
have their Securities included in the registration statement, beneficial owners
must complete and return the enclosed Notice of Registration Statement and
Selling Securityholder Questionnaire.
It is important that beneficial owners of the Securities receive a copy
of the enclosed materials as soon as possible as their rights to have the
Securities included in the registration statement depend upon their returning
the Notice and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy
of the enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact Allied Waste North
America, Inc., 7201 Camelback Road, Suite 375, Scottsdale, AZ 85251, Attention:
Vice-President-Chief Financial Officer, (602) 423-2946.
- ------------------
* Not less than 28 calendar days from date of mailing.
<PAGE> 26
Allied Waste North America, Inc.
Notice of Registration Statement
and
Selling Securityholder Questionnaire
(Date)
Reference is hereby made to the Exchange and Registration Rights
Agreement (the "Exchange and Registration Rights Agreement") between Allied
Waste North America, Inc. (the "Company") and the Purchasers named therein.
Pursuant to the Exchange and Registration Rights Agreement, the Company has
filed with the United States Securities and Exchange Commission (the
"Commission") a registration statement on Form [___] (the "Shelf Registration
Statement") for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the "Securities Act"), of the Company's 10 1/4% Senior
Subordinated Notes due 2006 (the "Securities"). A copy of the Exchange and
Registration Rights Agreement is attached hereto. All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the
Exchange and Registration Rights Agreement.
Each beneficial owner of Registrable Securities (as defined below) is
entitled to have the Registrable Securities beneficially owned by it included in
the Shelf Registration Statement. In order to have Registrable Securities
included in the Shelf Registration Statement, this Notice of Registration
Statement and Selling Securityholder Questionnaire ("Notice and Questionnaire")
must be completed, executed and delivered to the Company's counsel at the
address set forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE].
Beneficial owners of Registrable Securities who do not complete, execute and
return this Notice and Questionnaire by such date (i) will not be named as
selling securityholders in the Shelf Registration Statement and (ii) may not use
the Prospectus forming a part thereof for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and related Prospectus.
The term "Registrable Securities" is defined in the Exchange and
Registration Rights Agreement.
A-2
<PAGE> 27
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in Item (3).
The undersigned, by signing and returning this Notice and Questionnaire, agrees
to be bound with respect to such Registrable Securities by the terms and
conditions of this Notice and Questionnaire and the Exchange and Registration
Rights Agreement, including, without limitation, Section 6 of the Registration
Rights Agreement, as if the undersigned Selling Securityholder were an original
party thereto.
Upon any sale of Registrable Securities pursuant to the Shelf
Registration Statement, the Selling Securityholder will be required to deliver
to the Company and Trustee the Notice of Transfer set forth in Appendix A to the
Prospectus and as Exhibit B to the Exchange and Registration Rights Agreement.
The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:
A-3
<PAGE> 28
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Securityholder:
______________________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as in
(a) above) of Registrable Securities Listed in Item (3) below:
______________________________________________________________
(c) Full Legal Name of DTC Participant (if applicable and if not
the same as (b) above) Through Which Registrable Securities
Listed in Item (3) below are Held:
______________________________________________________________
(2) Address for Notices to Selling Securityholder:
______________________________________________________________
______________________________________________________________
______________________________________________________________
Telephone: ___________
Fax: ___________
Contact Person: ___________
(3) Beneficial Ownership of Securities:
Except as set forth below in this Item (3), the undersigned
does not beneficially own any Securities.
(a) Principal amount of Registrable Securities beneficially
owned: ___________________________________________________
CUSIP No(s). of such Registrable Securities: _____________
(b) Principal amount of Securities other than Registrable
Securities beneficially owned: ___________________________
CUSIP No(s). of such other Securities: ___________________
A-4
<PAGE> 29
(c) Principal amount of Registrable Securities which the
undersigned wishes to be included in the Shelf Registration
Statement: ___________________________________________________
CUSIP No(s). of such Registrable Securities to be included in
the Shelf Registration Statement: ____________________________
(4) Beneficial Ownership of Other Securities of the Company:
Except as set forth below in this Item (4), the undersigned
Selling Securityholder is not the beneficial or registered owner of any
other securities of the Company, other than the Securities listed above
in Item (3).
State any exceptions here:
(5) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder
nor any of its affiliates, officers, directors or principal equity
holders (5% or more) has held any position or office or has had any
other material relationship with the Company (or its predecessors or
affiliates) during the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling
Securityholder intends to distribute the Registrable Securities listed
above in Item (3) only as follows (if at all): Such Registrable
Securities may be sold from time to time directly by the undersigned
Selling Securityholder or, alternatively, through underwriters,
broker-dealers or agents. Such Registrable Securities may be sold in
one or more transactions at fixed prices, at prevailing market prices
at the time of sale, at varying prices determined at the time of sale,
or at negotiated prices. Such sales may be effected in transactions
(which may involve crosses or block transactions) (i) on any national
securities exchange or quotation service on which the Registered
Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such
exchanges or services or in the over-the-counter market, or (iv)
through the writing of options. In connection with sales of the
A-5
<PAGE> 30
Registrable Securities or otherwise, the Selling Securityholder may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the Registrable Securities in the course of hedging the positions they
assume. The Selling Securityholder may also sell Registrable Securities short
and deliver Registrable Securities to close out such short positions, or loan or
pledge Registrable Securities to broker-dealers that in turn may sell such
securities.
State any exceptions here:
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
provisions of the Exchange Act and the rules and regulations thereunder,
particularly Rule 10b-6.
In the event that the Selling Securityholder transfers all or any
portion of the Registrable Securities listed in Item (3) above after the date on
which such information is provided to the Company, the Selling Securityholder
agrees to notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Exchange and
Registration Rights Agreement.
By signing below, the Selling Securityholder consents to the disclosure
of the information contained herein in its answers to Items (1) through (6)
above and the inclusion of such information in the Shelf Registration Statement
and related Prospectus. The Selling Securityholder understands that such
information will be relied upon by the Company in connection with the
preparation of the Shelf Registration Statement and related Prospectus.
In accordance with the Selling Securityholder's obligation under
Section 3(d) of the Exchange and Registration Rights Agreement to provide such
information as may be required by law for inclusion in the Shelf Registration
Statement, the Selling Securityholder agrees to promptly notify the Company of
any inaccuracies or changes in the information provided herein which may occur
subsequent to the date hereof at any time while the Shelf Registration Statement
remains in effect. All notices hereunder and pursuant to the Exchange and
A-6
<PAGE> 31
Registration Rights Agreement shall be made in writing, by hand-delivery,
first-class mail, or air courier guaranteeing overnight delivery as follows:
(i) To the Company:
Allied Waste North America, Inc.
7201 Camelback Road, Suite 375
Scottsdale, AZ 85251
Attention: Vice-President-Chief Financial Officer
(602) 423-2946.
(ii) With a copy to:
Porter & Hedges, LLP
700 Louisiana, 35th Floor
Houston, TX 77002-2764
Attention: Robert G. Reedy
(713) 226-0600
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company's counsel, the terms of this Notice
and Questionnaire, and the representations and warranties contained herein,
shall be binding on, shall inure to the benefit of and shall be enforceable by
the respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder (with respect to the Registrable
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above. This Agreement shall be governed in all respects by the laws of the
State of New York.
A-7
<PAGE> 32
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated: ________________
__________________________________________________________
Selling Securityholder
(Print/type full legal name of beneficial
owner of Registrable Securities)
__________________________________________________________
By:
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:
Porter & Hedges, LLP
700 Louisiana, 35th Floor
Houston, TX 77002-2764
Attention: Robert G. Reedy
(713) 226-0600
A-8
<PAGE> 33
Exhibit B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
First Bank National Association
Allied Waste North America, Inc.
c/o First Bank National Association
First Trust Center
180 East Fifth Street
St. Paul, MN 55101
Attention: Trust Officer
Re: Allied Waste North America, Inc. (the "Company")
10 1/4% Senior Subordinated Notes due 2006
Dear Sirs:
Please be advised that _____________________ has transferred
$___________ aggregate principal amount of the above-referenced Notes pursuant
to an effective Registration Statement on Form [___] (File No. 333-____) filed
by the Company.
We hereby certify that the prospectus delivery requirements, if any, of
the Securities Act of 1933, as amended, have been satisfied and that the
above-named beneficial owner of the Notes is named as a "Selling Holder" in the
Prospectus dated ___________, 199_ or in supplements thereto, and that the
aggregate principal amount of the Notes transferred are the Notes listed in such
Prospectus opposite such owner's name.
Dated:
Very truly yours,
________________________
(Name)
By: ________________________
(Authorized Signature)
B-1
