<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 7, 1997
REGISTRATION NO. 333-31231
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ALLIED WASTE INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 4953 88-0228636
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION 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
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
HENRY L. HIRVELA
CHIEF FINANCIAL 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 the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ________
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE
TITLE OF CLASS OF AMOUNT TO BE AGGREGATE OFFERING PER AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT UNIT(1) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
11.30% Senior Discount Notes due 2007.............. $418,000,000 100% $418,000,000 $126,667(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) Previously paid.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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
PROSPECTUS
Allied Waste Industries, Inc.
OFFER TO EXCHANGE ALL OF ITS OUTSTANDING 11.30% SENIOR DISCOUNT NOTES
DUE 2007 FOR 11.30% SENIOR DISCOUNT NOTES DUE 2007
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON DECEMBER 16, 1997, UNLESS EXTENDED.
Allied Waste Industries, 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 11.30% Senior Discount Notes due 2007
(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
11.30% Senior Discount Notes due 2007 (the "Notes"), of which an aggregate of
$418,000,000 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.
The Exchange Notes will not accrue cash interest until June 1, 2002, and
thereafter cash interest will be payable semi-annually on June 1 and December 1
of each year, commencing December 1, 2002. The Exchange Notes will mature on
June 1, 2007. Holders of the Exchange Notes will be required to include the
original issue discount as interest income in advance of the receipt of the cash
payments to which such income is attributable. See "Description of the Exchange
Notes" and "Certain Federal Income Tax Consequences of an Investment in the
Exchange Notes." The Exchange Notes 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. Up to 33 1/3% in aggregate principal
amount of Exchanges Notes originally issued will be redeemable at the option of
the Company at any time or times prior to June 1, 2000 from the net proceeds of
one or more public offerings of capital stock of the Company at a redemption
price of 111.30% of their Accreted Value (as defined herein) as of, plus accrued
and unpaid interest to the date of redemption. Upon a Change of Control (as
defined herein), 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 (i)
in the case of any such purchase prior to June 1, 2002, 101% of their Accreted
Value as of the purchase date and (ii) in the case of any such purchase on or
after June 1, 2002, 101% of their principal amount, in each case, plus accrued
and unpaid interest to the date of purchase. See "Description of the Exchange
Notes."
The Exchange Notes will be senior unsecured obligations of the Company, will
rank pari passu in right of payment with all existing and future senior
unsecured obligations of the Company and will rank senior in right of payment to
any future subordinated obligations of the Company. Holders of secured
obligations of the Company will, however, have claims that are prior to the
claims of the holders of the Exchange Notes with respect to the assets securing
such secured obligations. The Company conducts its operations through its
subsidiary, Allied Waste North America, Inc. ("Allied Waste NA"), which is
subject, under the Senior Credit Facility (as defined herein) and its 10 1/4%
Senior Subordinated Notes due 2006 (the "Allied Waste NA Notes"), to certain
restrictions on its ability to pay funds to the Company. The Exchange Notes will
be effectively subordinated to all obligations, including trade payables, of the
Company's subsidiaries. As of June 30, 1997, the Exchange Notes will be
effectively subordinated to approximately $1,198.0 million of debt of the
Company's subsidiaries. See "Risk Factors -- Holding Company Structure;
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 December 16, 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 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 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) 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 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 10 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 November 10, 1997.
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-4 (No 333-31231), including any amendments thereto, under the Securities Act,
with respect to the Exchange Notes 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 Notes, 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.
The Company 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 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. The Company's common
stock is listed on the National Market tier of the Nasdaq Stock Market
("Nasdaq") and material filed by the Company can be inspected at the offices of
Nasdaq at 1735 K Street, N.W., Washington, D.C. 20006.
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated herein by reference (i) the Company's
Annual Report on Form 10-K for the year ended December 31, 1996, as amended;
(ii) the Company's Quarterly Reports on Form 10-Q, as amended, for the quarters
ended March 31, 1997 and June 30, 1997; (iii) the Company's Definitive Proxy
Materials in accordance with Schedule 14A dated June 10, 1997; (iv) the
Company's Current Reports on Form 8-K, as amended, dated January 9, 1997,
January 30, 1997, February 19, 1997, May 2, 1997, August 27, 1997 and November
4, 1997, and (v) all documents filed by the Company with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequently to the
date of this Prospectus and prior to the termination of the Exchange Offer. A
copy of the Company's Annual Report on Form 10-K for the year ended December 31,
1996 is provided with this Prospectus. Copies of the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1997 are available at no charge upon
request from the Company.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents are available upon request from
Allied Waste Industries, Inc., 15880 North Greenway-Hayden Loop, Suite 100,
Scottsdale, Arizona 85260, Attn: Peter S. Hathaway, Telephone: (602)-423-2946.
In order to ensure timely delivery of the documents, any request should be made
by December 11, 1997.
2
<PAGE> 4
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 the "Company" are to Allied Waste Industries, Inc., and its direct
and indirect subsidiaries.
THE COMPANY
The Company is a major solid waste management company in the United States,
as measured by revenues. The Company is a vertically-integrated, non-hazardous
solid waste management company providing collection, recycling and disposal
services. As of November 1, 1997, the Company serves approximately 1.4 million
customers in 21 states. The Company currently conducts its operations through a
network of 83 collection companies, 41 transfer stations, 59 landfills and 23
recycling facilities.
BUSINESS STRATEGY
The major components of the Company's business strategy consist of: (1)
operating vertically integrated non-hazardous solid waste service businesses
with a high rate of waste internalization; (2) managing these businesses locally
with a strong focus on operations; (3) maintaining a high rate of growth through
acquisitions and internal growth in existing and selected new markets; and (4)
maintaining the financial capacity, management capabilities and administrative
systems and controls to support on-going operations and future growth.
THE NOTE OFFERING
The Notes.................. The Notes were sold by the Company on May 15, 1997,
and were subsequently resold to qualified
institutional buyers pursuant to Rule 144A 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......... $418,000,000 aggregate principal amount of 11.30%
Senior Discount Notes due 2007.
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, $418,000,000 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
Commission 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
3
<PAGE> 5
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 Commission 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 December 16,
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.
Conditions to the
Exchange Offer........... The Exchange Offer is subject to certain customary
conditions, which may be waived by the Company.
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 (as
defined herein) 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
4
<PAGE> 6
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 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
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<PAGE> 7
limitations applicable thereto under the indenture,
relating to the Notes 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 Bank National Association (the "Exchange
Agent").
THE EXCHANGE NOTES
Maturity Date.............. June 1, 2007.
Interest................... The Exchange Notes will accrete in value at a rate
of 11.30% compounded semi-annually, to an aggregate
principal amount of $418.0 million by June 1, 2002.
No cash interest (other than Special Interest (as
defined herein), if any) will accrue on the
Exchange Notes prior to June 1, 2002. Thereafter,
the Exchange Notes will accrue cash interest at the
rate of 11.30% per annum from June 1, 2002, payable
semi-annually in arrears on June 1 and December 1
of each year, commencing December 1, 2002.
Yield...................... 11.30% per annum, computed on a semi-annual
bond-equivalent basis and calculated from May 15,
1997.
Ranking.................... The Exchange Notes will be senior unsecured
obligations of the Company, will rank pari passu in
right of payment with all existing and future
senior unsecured obligations of the Company and
will rank senior in right of payment to any future
subordinated obligations of the Company. Holders of
secured obligations of the Company will, however,
have claims that are prior to the claims of the
holders of the Exchange Notes with respect to the
assets securing such obligations. The Company
conducts its operations through its subsidiary,
Allied Waste NA which is subject, under the Senior
Credit Facility and the indenture relating to the
Allied Waste NA Notes, to certain restrictions on
its ability to pay funds to the Company. The
Exchange Notes will be effectively subordinated to
all obligations, including trade payables, of the
Company's subsidiaries. As of June 30, 1997, the
Exchange Notes will be effectively subordinated to
approximately $1,198.0 million of debt of the
Company's subsidiaries.
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.
At any time, or from time to time, prior to June 1,
2000, 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 of
capital stock of the Company at a redemption price
equal to 111.30% of their Accreted Value as of,
plus accrued and unpaid Special Interest (if any)
to, the date of redemption. See "Description of the
Exchange Notes -- Optional Redemption."
6
<PAGE> 8
Change of Control.......... Upon the occurrence of a Change of Control, each
holder of the Exchange Notes may require the
Company to repurchase all or a portion of the
Exchange Notes held by such holder at a purchase
price equal to (i) in the case of any such purchase
prior to June 1, 2002, 101% of their Accreted Value
as of the purchase date and (ii) in the case of any
such purchase on or after June 1, 2002, 101% of
their principal amount, in each case 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."
Original Issue Discount.... The issuance of the Exchange Notes will result in
original issue discount for federal income tax
purposes. Thus, although interest (other than
Special Interest, if any) will not accrue on the
Exchange Notes prior to June 1, 2002, and there
will be no periodic cash payments of interest
(other than Special Interest, if any) on the
Exchange Notes prior to December 1, 2002, original
issue discount (that is, the difference between the
stated redemption price at maturity and the issue
price of the Exchange Notes) will accrue from the
original issue date of the Notes and will be
includable as interest income periodically in a
holder's gross income for federal income tax
purposes in advance of receipt of the cash payments
to which the income is attributable. See "Certain
Federal Income Tax Consequences of an Investment in
the Exchange Notes."
Restrictive Covenants...... The Indenture (as defined herein) will restrict,
among other things, the ability of the Company and
its Restricted Subsidiaries (as defined herein),
(i) to incur additional Debt (as defined herein),
(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 ("DTC"). 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, Procedures."
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
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<PAGE> 9
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 Covenant; Exchange
Offer."
Pursuant to an Exchange and Registration Rights
Agreement (the "Registration Rights Agreement")
between the Company and the Initial Purchasers (as
defined herein), 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 the date upon which the Registration
Statement is declared effective 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
Covenant; Exchange Offer."
For additional information regarding the Exchange Notes, see "Certain
Federal Income Tax Consequences of an Investment in the Exchange Notes" and
"Description of the Exchange Notes."
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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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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 June 30, 1997, the Company's
consolidated debt was approximately $1,439.7 million. The degree to which the
Company is leveraged has important consequences to holders of the Exchange
Notes, 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 the
Senior Credit Facility at variable rates that have not been hedged, the Company
will be vulnerable to increases in interest rates. At June 30, 1997,
approximately $576.0 million in aggregate borrowings were outstanding under the
Senior Credit Facility. All borrowings under the Senior Credit Facility will
mature in 2003.
The ability of the Company to meet its debt service obligations 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.
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 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.
HOLDING COMPANY STRUCTURE; STRUCTURAL SUBORDINATION
The Company holds all of its assets and conducts all of its operations
through its subsidiary, Allied Waste NA, and its subsidiaries. The Company thus
derives all of its operating income and cash flow from Allied Waste NA and must
rely upon distributions from Allied Waste NA to generate the funds necessary to
meet its obligations, including the payment of principal of and interest on the
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. Allied Waste NA is subject,
under the Senior Credit Facility and the Allied Waste NA Notes, to certain
restrictions on its ability to pay funds to the Company.
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The Exchange Notes will be effectively subordinated in right of payment to
all existing and future secured debt of the Company to the extent of the
collateral securing such debt.
In addition, the Exchange Notes will be effectively subordinated to all
existing and future indebtedness and other liabilities, including trade
payables, of the Company's subsidiaries. As of June 30, 1997, the Exchange Notes
will be effectively subordinated to approximately $1,198.0 million of debt of
the Company's subsidiaries.
LIMITED OPERATING HISTORY IN REGARD TO ACQUIRED BUSINESSES
The Company has a limited operating history with regard to a significant
portion of its operations. During 1996, the Company acquired 21 companies,
excluding the Laidlaw Acquired Businesses (as defined below), which collectively
comprised approximately $78.8 million or 31.9% of the Company's revenue in 1996.
In December 1996, the Company acquired substantially all of the non-hazardous
solid waste management businesses conducted by Laidlaw Inc. ("Laidlaw") in the
United States and Canada (the "Laidlaw Acquisition"). On a pro forma basis after
giving effect to the sale by the Company of all of the Canadian solid waste
business acquired in the Laidlaw Acquisition, the businesses acquired from
Laidlaw, (the "Laidlaw Acquired Businesses") generated revenues for the twelve
months ended November 30, 1996 of approximately $494.5 million. The revenues for
the year ended December 31, 1996 generated by the operations of the Company
excluding such Laidlaw Acquired Businesses were approximately $246.7 million.
The Company expects to continue to acquire appropriate landfills,
collection operations and transfer stations in the future. The financial
position and results of operations of the Company will depend to a large extent
on the Company's ability to integrate acquired operations effectively and to
realize expected financial benefits and operational efficiencies. There can be
no assurance that the Company's efforts to integrate 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 acquisitions strategy in the future, its financial
position and results of operations may fluctuate significantly from period to
period.
CAPITAL REQUIREMENTS AND LIMITED WORKING CAPITAL
The Company intends to fund its cash needs through cash flow from
operations and borrowings under the Senior Credit Facility and its equipment
lease facilities. 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 and fund acquisitions, landfill
development and capital expenditures. A substantial portion of the Company's
available cash will be required to be applied to service indebtedness, which is
expected to include approximately $203.6 million in annual principal and
interest payments. During 1997, the Company also expects to spend approximately
$153 million for capital, closure and post-closure and remediation expenditures
and has provided approximately $311 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 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. 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
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and scheduled payments of principal of, and interest on debt incurred under the
Senior Credit Facility, and interest on the Allied Waste NA Notes. However, the
principal payments at maturity on the Allied Waste NA Notes may require
refinancing. 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 or Allied Waste NA to service its
indebtedness 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 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.
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.
COMPETITION FROM OTHER COMPANIES AND MUNICIPALITIES; LANDFILL ALTERNATIVES
The non-hazardous solid waste industry is led by five 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.
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
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such a market were to develop, the Exchange Notes could trade at prices that may
be higher or lower than the initial offering price of the Notes depending on
many factors, including prevailing interest rates, the Company's operating
results and the market for similar securities. Each of Goldman, Sachs & Co.,
Merrill Lynch & Co. and Credit Suisse First Boston (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.
POTENTIAL INABILITY TO EFFECT CHANGE OF CONTROL REPURCHASES
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 (i)
in the case of any such purchase prior to June 1, 2002, 101% of their Accreted
Value as of the Purchase Date and (ii) in the case of any such purchase on or
after June 1, 2002, 101% of their principal amount, in each case, plus accrued
interest to the date of repurchase. The Senior Credit Facility restricts such a
purchase and such an offer would require 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. In
addition, the indenture relating to the Allied Waste NA Notes requires Allied
Waste NA to repurchase the Allied Waste NA Notes upon a Change of Control and
Allied Waste NA will be unable to make distributions to the Company prior to
repurchasing the Allied Waste NA Notes upon a Change of Control. 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. See "Description of the
Exchange Notes -- Repurchase at Option of the Holders -- Change of Control."
RESTRICTIONS IMPOSED BY THE SENIOR CREDIT FACILITY AND THE ALLIED WASTE NA NOTES
The Senior Credit Facility and the indenture relating to the Allied Waste
NA Notes contain a number of significant covenants that, among other things,
will restrict the ability of the Company and its subsidiaries 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 also requires 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 or the
indenture relating to the Allied Waste NA Notes. In the event of any such
default under the Senior Credit Facility, 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, in the event of a
default under the indenture relating to the Allied Waste NA Notes, the holders
of the Allied Waste NA Notes could elect to declare the Allied Waste NA Notes to
be due and payable. If the indebtedness under the Senior Credit Facility, the
Allied Waste NA Notes or the Exchange Notes were to be accelerated, it is
unlikely that the
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assets of the Company would be sufficient to repay the Exchange Notes. See
"Description of the Exchange Notes" and "Description of Certain Indebtedness."
ORIGINAL ISSUE DISCOUNT; POSSIBLE UNFAVORABLE TAX AND OTHER LEGAL CONSEQUENCES
FOR HOLDERS OF EXCHANGE NOTES AND THE COMPANY
The Exchange Notes will be issued at a substantial discount from the stated
principal amount thereof. Consequently, purchasers of the Exchange Notes should
be aware that, although cash interest (other than Special Interest, if any) will
not accrue on the Exchange Notes prior to June 1, 2002, and there will be no
periodic payments of cash interest on the Exchange Notes prior to December 1,
2002, original issue discount (that is, the difference between the stated
redemption price at maturity and the issue price of the Exchange Notes) will
accrue from the original issue date of the Notes and will be includable as
interest income periodically (including for periods ending prior to June 1,
2002) in a holder's gross income for U.S. federal income tax purposes in advance
of receipt of the cash payments to which the income is attributable. Similar
results may apply under state and other tax laws.
If a bankruptcy case is commenced by or against the Company under the U.S.
Bankruptcy Code after the issuance of the Exchange Notes, the claim of a holder
of Exchange Notes with respect to the principal amount thereof may be limited to
an amount equal to the sum of (i) the initial offering price and (ii) that
portion of the original issue discount that is not deemed to constitute
"unmatured interest" for purposes of the U.S. Bankruptcy Code. Any original
issue discount that was not amortized as of any such bankruptcy filing would
constitute "unmatured interest."
See "Certain Federal Income Tax Consequences of an Investment in the
Exchange Notes" for a more detailed discussion of the federal income tax
consequences to the holders regarding the purchase, ownership and disposition of
the Exchange Notes.
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. 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 substantially the
Company's operating costs as well as the possibility of the impairment of the
Company's investment in its facilities.
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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.
As a condition to the Laidlaw Acquisition, Allied engaged Emcon
Environmental Services, Inc. ("Emcon"), an independent environmental consultant,
to conduct environmental assessments of the subsidiaries acquired in the Laidlaw
Acquisition (the "LSW Subsidiaries"). In its report (the "Emcon Report"), Emcon
identified several contaminated landfills and other locations, including
landfills and other locations owned by the LSW Subsidiaries, that could pose
significant sources of liability to the LSW Subsidiaries. The costs of
performing the investigation, design, remediation and allocation of
responsibility to the subsidiaries of the Company vary significantly between
sites. Based on the information currently available, the Company recorded a
provision of $51.5 million for environmental matters, including closure and
post-closure costs, in the 1996 statement of operations and expects these
amounts to be disbursed over the next 30 years. The actual liability at these
sites cannot currently be determined due to a number of uncertainties including
the extent of the contamination, the appropriate remedy, the financial viability
of other potentially responsible parties and the ultimate apportionment of
responsibility among such potentially responsible parties.
The representations made by the Laidlaw sellers in the Stock Purchase
Agreement, dated September 17, 1996, among the Company, Allied Waste NA and
Laidlaw, among others, relating to the Laidlaw Acquisition (the "Laidlaw
Acquisition Agreement") with respect to environmental matters (i) terminated on
the closing of the Laidlaw Acquisition as to all matters disclosed in writing to
the Company at least five business days prior to the closing or disclosed with
specificity in the Emcon Report and (ii) terminate on the third anniversary of
the closing of the Laidlaw Acquisition as to all matters other than those
described in clause (i) and which are known to Laidlaw on the closing date. The
Laidlaw Acquisition Agreement further provided that Laidlaw's indemnification
obligations with respect to environmental matters would be limited to the amount
by which the aggregate of all such damages exceed a $1 million basket, without
giving effect to any materiality qualifications. At the closing of the Laidlaw
Acquisition, the Company and Laidlaw entered into a Special Environmental
Indemnity, which provided that the indemnity in respect of properties located at
Etobicoke, Ontario, Delafield, Wisconsin and Gary Lagoons, Indiana would not be
subject to the three-year limitation or any basket. In connection with the
Laidlaw Repurchase (as defined herein), the Company has agreed that the
indemnity for damages arising out of the Etobicoke, Ontario and Delafield,
Wisconsin sites will be limited to a three-year period from the closing of the
Laidlaw Acquisition and to an amount in excess of a $25 million basket with such
$25 million basket to be reduced by any damages to which the $1 million basket
in the Laidlaw Acquisition Agreement applies.
POTENTIAL UNINSURED OR UNDERINSURED ENVIRONMENTAL LIABILITIES
As is typically the case in the solid waste industry, Allied is able to
obtain only very limited environmental impairment insurance regarding its
landfills. An uninsured or underinsured claim of sufficient magnitude would
require Allied to fund such claim from cash flow generated by operations or
borrowings under the Amended Bank Agreement or other sources of liquidity. There
can be no assurance that Allied would be able to fund any such claim from
operations, the Amended Bank Agreement or elsewhere.
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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. Cleanup liability may arise under various state laws similar
to CERCLA. As used in this Prospectus, "non-hazardous waste" means substances,
including asbestos, that are not defined as hazardous wastes under federal
regulations.
POTENTIAL UNDISCLOSED LIABILITIES ASSOCIATED WITH ACQUISITIONS
In connection with any acquisition of business or assets 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.
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 Laidlaw Acquired Businesses which are
incorporated in the U.S. (the "LSW U.S. Subsidiaries"), and other U.S.
subsidiaries of LTI which were not 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 certain of its
subsidiaries (the "Laidlaw Group") which covers the amounts at issue in the Tax
Controversy for which any LSW U.S. Subsidiary may ultimately be found liable.
The obligation of the Laidlaw Group to indemnify the Company in respect of
amounts at issue in the Tax Controversy is a general, unsecured obligation of
the Laidlaw Group. The ability of the Laidlaw Group to pay and fulfill such
indemnification obligation will depend on the financial condition of the Laidlaw
Group at the time of any required performance of such obligation, as to which
the Company has no assurance.
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 businesses and assets that have been acquired by the Company and
the 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
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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 and financial conditions. 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," and any
prospective investor in the Exchange Notes should give careful consideration to
such factors.
THE COMPANY
The Company is the fifth largest non-hazardous solid waste management
company in the United States, as measured by revenues. The Company serves 1.4
million customers through operations in 21 states located primarily in the
Midwest, Northeast, Southeast and Southwest United States. As of November 1,
1997, the Company provided its services through a network of 83 collection
companies, 41 transfer stations, 59 landfills and 23 recycling facilities. The
Company had revenues of $246.7 million for the year ended December 31, 1996 and
$119.0 million and $395.2 million for the six months ended June 30, 1996 and
1997, respectively. The substantial increase in revenues in the first half of
1997 compared to the same period in 1996 is primarily attributable to the
Acquired Businesses.
The Company was incorporated under the laws of the State of Delaware in
July 1989. The principal executive offices of the Company are located at 15880
North Greenway-Hayden Loop, Suite 100, Scottsdale, Arizona, 85260 and its
telephone number is (602) 423-2946.
RECENT TRANSACTIONS
On December 30, 1996, the Company completed the Laidlaw Acquisition for
consideration comprised of $1.2 billion cash (the "Cash Consideration"), 14.6
million shares (the "Laidlaw Shares") of Allied's common stock (the "Common
Stock"), a warrant to acquire 20.4 million shares of Allied common stock (the
"Laidlaw Warrant"), and two junior subordinated debentures, with an aggregate
face amount of $318.3 million (the "Allied Canada Debentures") issued by Allied
Waste Holdings (Canada), Ltd., a Canadian corporation and a wholly-owned
subsidiary of the Company. Immediately after the closing of the Laidlaw
Acquisition, Laidlaw exchanged the Allied Canada Debentures for identical
debentures (the "Allied Finance Debentures" and, collectively with the Allied
Canada Debentures, the "Allied Debentures") issued by Allied Waste Finance
(Canada), Ltd., a Canadian corporation and a wholly-owned subsidiary of Allied
("Allied Finance"). The cash consideration was financed from the proceeds of the
1996 Senior Credit Facility (as defined herein) and the sale of the Allied Waste
NA Notes.
On March 16, 1997, the Company completed the Canadian Sale for
approximately $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, eight transfer stations, ten
recycling facilities and seven landfills in Canada. The Company used the
proceeds from the Canadian Sale to pay down approximately $517 million in debt
under the 1996 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.
On May 15, 1997, Allied repurchased ("Laidlaw Repurchase") the Allied
Finance Debentures and the Laidlaw Warrant from Laidlaw and Laidlaw
Transportation, Inc. ("Laidlaw Transportation") for cash consideration of $230
million. Contemporaneously with the Laidlaw Repurchase, certain private
securities investment funds affiliated with either Apollo Advisors II, L.P. or
The Blackstone Group (collectively, the "Apollo/Blackstone Investors") acquired
the Laidlaw Shares from Laidlaw Transportation and also acquired approximately
11.8 million shares of Common Stock from TPG Partners, L.P. and TPG Parallel I,
L.P. Pursuant to the terms of the Shareholders Agreement dated May 15, 1997
between Allied and the
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Apollo/Blackstone Investors (the "Shareholders Agreement"), the
Apollo/Blackstone Investors currently have the right to designate four members
of the Board of Directors of Allied, subject to reduction upon the occurrence of
certain circumstances. The Shareholders Agreement also grants the
Apollo/Blackstone Investors certain registration rights regarding the shares of
Common Stock owned by the Apollo/Blackstone Investors and restricts the
Apollo/Blackstone Investors from engaging in certain activities or transactions
which could result in a change in control of Allied. In connection with the
Laidlaw Repurchase, Allied issued the Notes. The net proceeds of the Note
Offering were used to pay the cash consideration of the Laidlaw Repurchase.
On June 12, 1997, the Company completed a series of transactions with USA
Waste (the "USA Waste Transactions") pursuant to which the Company acquired
eight landfills, three collection operations, five transfer stations and one
recycling facility with an annual aggregate revenue of $68.1 million for
consideration of $87.5 million. Also pursuant to the USA Waste Transactions, the
Company sold to USA Waste one landfill, two collection operations and one
recycling facility with an aggregate of approximately $34.5 million in annual
revenue for which it received consideration of approximately $61.3 million.
From January 1, 1997 through November 1, 1997, the Company has completed
the acquisition of 25 solid waste businesses, not including the assets acquired
in the USA Waste Transactions, representing approximately $180.1 million in
annual revenue. The acquired businesses, which include seven landfills (one of
which is under development), 23 collection operations, seven transfer stations
and three recycling facilities, are located in ten separate markets and will be
integrated into existing operations. Total consideration of approximately $391.9
million (including $10 million for the landfill under development), comprised of
cash, notes and Common Stock, was paid in these transactions.
On September 30, 1997, the Company completed a public offering of
18,630,000 shares of Common Stock at $18.50 per share (the "1997 Equity
Offering"). The Company used $274 million of the approximate $327 million net
proceeds from the 1997 Equity Offering to pay down debt outstanding under the
1997 Senior Credit Facility with the remainder of the proceeds being used for
acquisitions and general corporate purposes.
On October 1, 1997 the Company entered into an Amended and Restated Credit
Agreement (the "Senior Credit Facility") with Goldman Sachs Credit Partners,
L.P., as syndication agent, Credit Suisse First Boston ("Credit Suisse"), as
administrative agent, and Citibank, N.A., as documentation agent. See
"Description of Certain Indebtedness -- Senior Credit Facility."
INDUSTRY TRENDS
Based on data available from the Environmental Protection Agency (the
"EPA") and industry trade journals, the Company estimates that the 1996 revenues
of the non-hazardous solid waste industry were approximately $35 billion. The
non-hazardous solid waste industry is highly fragmented. Approximately 36%, 33%
and 31% of the revenue is generated by publicly traded companies, municipalities
and privately held companies, respectively. The five largest publicly traded
companies represent substantially all of the publicly traded company revenues.
The Company believes that several factors will lead to continuing
acquisitions and consolidation in the industry. Rising costs, regulatory
complexities and increased capital expenditures will create opportunities for
large integrated public companies that can obtain financing in the capital
markets. The following factors are contributing to consolidation and acquisition
opportunities:
(1) Subtitle D and similar state regulations have significantly
increased the amount of capital, technical expertise, operating costs and
financial assurance obligations 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. Industry data show that, in recent years, the number of landfills in
the United States has been decreasing. In 1988 there were approximately
7,500 landfills; by 1991, the number had dropped to 5,700; and in 1995
there were less than 2,900 landfills.
(2) As an alternative to funding the changes required by Subtitle D,
many municipalities are electing to privatize their municipal solid waste
operations. A survey cited in a 1996 industry trade
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journal, Waste Age, indicates that of the 1,600 municipalities surveyed,
which together represent 80% of the United States population, 11%, 35%, 27%
and 22% are considering privatization of solid waste collection services,
material recovery facilities, landfill operations and transfer stations,
respectively.
(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.
These developments, as well as more stringent financial assurance
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 major components of the Company's business strategy consist of: (1)
operating vertically integrated non-hazardous solid waste service businesses
with a high rate of waste internalization; (2) managing these businesses locally
with a strong focus on operations; (3) maintaining a high rate of growth through
acquisitions and internal growth in existing and selected new markets; and (4)
maintaining the financial capacity, management capabilities and administrative
systems and controls to support on-going operations and future growth.
Vertical Integration and Internalization. The vertical integration
business model is the key element of Allied's operating philosophy and
growth strategy. The fundamental objective of the vertical integration
business model is to control the waste stream from the point of collection
through disposal and to achieve a high rate of waste internalization.
Allied seeks to build, through acquisitions and other market development
initiatives, market specific, vertically integrated operations typically
consisting of one or more collection companies, transfer stations,
processing centers and landfills. Within its markets, Allied seeks to
strengthen its competitive position and improve its financial returns by
acquiring additional operating assets, typically through "tuck-in"
collection company acquisitions. Allied believes that it can realize
competitive advantages and strong future growth of continuously
implementing this strategy across existing and new markets in the United
States. Allied's internalization rate, as measured by collection volumes,
was approximately 57% for the first half of 1997.
Focus on Operations. Allied's operations-oriented business strategy
is characterized by decentralized operations and local management with
significant experience in operating and growing solid waste businesses.
Allied only recruits operating managers with extensive industry experience,
usually with significant experience in their geographic markets. Allied's
senior executive management, senior operating management and regional vice
presidents currently average approximately 17, 21 and 24 years of industry
experience, respectively. By continuing to hire and retain experienced,
local market-oriented managers Allied believes that it will be well
positioned to react to changes in its markets and will be able to
capitalize on growth opportunities in existing and new markets.
Maintaining High Rate of Growth. Allied seeks to capitalize on the
on-going consolidation of the approximately $35 billion solid waste
industry in the United States. Allied intends to grow primarily by
acquiring privately-owned solid waste companies and through internal
growth. Allied also intends to take selective advantage of opportunities
when government entities privatize the operation of all or part of their
solid waste systems. In addition, Allied seeks to achieve broad geographic
and business mix diversification in its operations and market development
activities. Allied's revenue mix for the first six months of 1997 was
approximately 58% collection, 24% disposal, 8% transfer, 4% recycling and
6% other.
Maintaining Capacity for Future Growth. Allied implements its
business strategy by maintaining effective internal controls, experienced
management and sufficient financial capacity. While Allied expects internal
cash flows to fund most of its working capital and capital expenditure
requirements, Allied intends to access the public and private capital
markets, as appropriate, to fund its continuing growth and market
development activities.
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ORGANIZATION, MARKETING AND SALES
The Company's operations are organized into six regions comprised of
Central States, Great Lakes, Midwest, Northeast, Southeast and West. Each region
is organized into several operating districts and each district is comprised of
specific site operations. In determining these regions and districts, the
Company utilizes its vertical integration strategy to optimize operating
efficiencies within each region. Each of its regions and substantially all of
its districts include collection, transfer, processing and disposal services,
which facilitates efficient and cost effective waste handling and allows the
districts to maximize the internalization of waste. In determining the
boundaries of regions and districts, consideration is also given to the
aggregate revenues generated in each region and district and the growth and
expansion plans in each geographic area.
Each region is managed by a regional vice president, who is supported by a
small staff which includes a regional controller. All regional vice presidents
and most regional controllers have significant industry experience (in the case
of regional vice presidents, averaging 24 years of experience). Most regional
offices are located in a district office in order to reduce overhead costs and
to promote a close working relationship between the regional management and
field operations personnel. In addition, Allied generally makes it a practice to
fill management positions from within the organization.
The responsibilities of Allied's field management also follow the vertical
integration model. All regional managers and generally most district managers
have responsibility for all phases of the waste handling process including
collection, transfer, processing and disposal. Regional management also has
responsibility for growing regional revenues through both acquisition and
internal growth initiatives. Allied believes that this approach promotes the
most efficient handling of waste, including increased internalization, and
results in reduced costs and increased profits. In addition to base salary,
regional and district management are compensated through a bonus program and
stock option plan. The compensation payable to each manager pursuant to the
bonus and stock option plans is largely based upon the operating profit in such
manager's geographic area of responsibility.
Each of Allied's districts has a staff responsible for sales and marketing.
Allied's policy is to periodically visit each commercial account to ensure
customer satisfaction and to sell additional services. In addition to calling on
existing customers, each salesperson calls upon potential customers within a
defined area in each market.
In addition to its sales efforts directed at commercial and industrial
customers, Allied has a municipal marketing coordinator in most service areas.
The municipal marketing coordinators are responsible for interfacing with each
municipality or community to which Allied provides residential service to ensure
customer satisfaction. In addition, the municipal coordinators organize and
handle bids for renewal and new municipal contracts in their service area.
COMPETITION
The non-hazardous solid waste collection and disposal industry is highly
competitive. The industry is comprised of four national waste companies in
addition to the Company: Waste Management, Inc.; Browning-Ferris Industries,
Inc. ("BFI"); Republic Industries, Inc.; and USA Waste Services, Inc. ("USA
Waste"); and local and regional companies of varying sizes and competitive
resources such as Superior Services, Inc. Allied 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. Allied 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 Allied encounters competition in its efforts to
acquire landfills and collection operations. Accordingly, it may become
uneconomical for Allied to make further acquisitions or Allied may be unable to
locate or acquire suitable acquisition candidates at price levels and on terms
and conditions that Allied considers appropriate, particularly in markets Allied
does not already serve.
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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 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 cannot predict whether or
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not it will be able to obtain the governmental approvals necessary to establish
new or expand existing landfills and, if it does, whether or not it will be
economically beneficial to do so.
The Company's operations are 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, as amended (the "Clean
Water Act"). 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. 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 of 1970, as amended (the "Clean Air Act"). 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. The Emission Guidelines 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 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.
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The Occupational Safety and Health Act of 1970, as amended ("OSHA"). 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, water and air pollution and
remediation, and, in most cases, 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 also
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 has implemented and will continue to implement its own
environmental safeguards that comply with or exceed 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 it
acquires.
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. Except as discussed in "-- Legal
Proceedings" below, management does not expect the impact of any known
environmental or other contingencies to be material to the Company's
consolidated liquidity, financial position or results of operations.
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 policies 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 $311 million in financial assurance
obligations relating to its landfill operations during 1997. 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, directly and indirectly, of letters of credit.
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EMPLOYEES
As of June 30, 1997, the Company employed approximately 5,000 persons.
Certain employees of the Company are covered by collective bargaining
agreements. The Company believes relations with its employees are satisfactory.
PROPERTIES
The Company's principal executive offices are located at 15880 North
Greenway-Hayden Loop, Suite 100, Scottsdale, Arizona 85260 where it currently
leases 33,000 square feet of office space. The Company also maintains regional
administrative offices in Arizona, Illinois, Missouri, North Carolina and Ohio.
The principal property and equipment of the Company consists of land
(primarily landfill sites, transfer stations and bases for collection
operations), buildings, and vehicles and equipment. At November 1, 1997, the
Company owned and/or operated 83 collection companies and 59 solid waste
landfills aggregating approximately 17,800 total acres, including approximately
7,100 permitted acres. In addition, the Company owned and/or operated 41
transfer stations and 23 recycling facilities.
LEGAL PROCEEDINGS
The Company is currently involved in certain routine litigation. The
Company believes that all such litigation arose in the ordinary course of
business and that costs of settlements or judgments arising from such suits will
not have a materially adverse effect on the Company's consolidated liquidity
financial position or results of operations.
The business of the Company is regulated by federal, state and local
provisions that relate to the protection of the environment. The nature of the
Company's business results in it frequently becoming a party to judicial or
administrative proceedings involving governmental authorities and other
interested parties. At June 30, 1997, the Company was not involved in any such
proceedings where management believes sanctions imposed by governmental
authorities may exceed $100,000. From time to time the Company may also be
subject to actions brought by citizens' groups, adjacent landowners or others in
connection with the permitting and licensing of its landfills or transfer
stations, or alleging personal injury, environmental damage or violations of the
permits and licenses pursuant to which the Company operates.
In connection with the Laidlaw Acquisition, the Company engaged Emcon to
assist in conducting an environmental assessment of the real property owned by
the LSW Subsidiaries or third-parties, and properties under the management of
the LSW Subsidiaries. Several contaminated landfills and other properties have
been identified, two of which are owned by subsidiaries of the Company, that
would require those subsidiaries to incur costs for incremental closure and
post-closure measures, remediation activities and litigation costs in the
future. The cost of performing the investigation, design, remediation and
allocation of responsibility to the subsidiaries of the Company vary
significantly between sites. Based on information available to the Company, the
Company recorded a provision of $51.5 million for environmental matters,
including closure and post-closure costs, in the 1996 statement of operations
and expects these amounts to be disbursed over the next 30 years.
The Company has been notified that it is considered a potentially
responsible party at a number of locations under CERCLA or other environmental
laws. The Company continually reviews its status with respect to each location,
taking into account the alleged connection to the location and the extent of the
contribution to the volume of waste at the location, the available evidence
connecting the entity to that location and the numbers and financial soundness
of other potentially responsible parties at the location. The ultimate amounts
for environmental liabilities at sites regarding which the Company may be a
potentially responsible party cannot be determined and estimates of such
liabilities made by the Company, after consultation with its independent
environmental engineers, require assumptions about future events due to a number
of uncertainties including the extent of the contamination, the appropriate
remedy, the financial viability of other potentially responsible parties and the
final apportionment of responsibility among the
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potentially responsible parties. Where the Company has concluded that its
estimated share of potential liabilities is probable, a provision has been made
in the consolidated financial statements. Since the ultimate outcome of these
matters may differ from the estimates used in the Company's assessment to date,
the recorded liabilities will be periodically evaluated as additional
information becomes available to ascertain that the accrued liabilities are
adequate. The Company has determined that the recorded liability for
environmental matters as of December 31, 1996 of approximately $152.5 million
(including the $51.5 million provision charged to the 1996 statement of
operations) represents the most probable outcome of these contingent matters.
The Company does not expect that adjustments to estimates, which are reasonably
possible in the near term and that may result in changes to recorded amounts,
will have a material effect on the Company's consolidated liquidity, financial
position or results of operations.
The consolidated federal income tax returns for the fiscal years ended
August 31, 1986, 1987 and 1988 of certain subsidiaries of the Company that were
acquired from Laidlaw in December 1996 have been under audit by the IRS. In
March 1994, the LSW U.S. Subsidiaries received a Statutory Notice of Deficiency
proposing that the LSW U.S. Subsidiaries pay additional taxes relating to the
Tax Controversy. The consolidated tax group of the LSW U.S. Subsidiaries has
also received notice that fiscal years 1992, 1993 and 1994 will be examined
regarding the Tax Controversy. The LSW U.S. Subsidiaries could be directly
liable for a substantial portion of any tax and interest assessed if the
disallowance of the deduction is sustained. In addition, under Treasury
Regulations promulgated under Section 1502 of the IRC, each member of the
consolidated tax group including each LSW U.S. Subsidiary, is or could be
severally liable for federal income tax liabilities of the entire consolidated
tax group, including any taxes due on the deemed sale of assets by the LSW U.S.
Subsidiaries pursuant to Section 338 of the IRC and all amounts at issue in the
Tax Controversy which are ultimately determined to be owed.
Any amounts at issue in the Tax Controversy and for which any LSW U.S.
Subsidiary may ultimately be found liable, are included in and covered by the
indemnification of the Company by the Laidlaw Group set forth in the Laidlaw
Acquisition Agreement. The obligation of the Laidlaw Group to indemnify the
Company in respect of amounts at issue in the Tax Controversy is a general,
unsecured obligation of the Laidlaw Group. The ability of the Laidlaw Group to
pay and fulfill such indemnification obligation will depend on the financial
condition of the Laidlaw Group at the time of any required performance of such
obligation.
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Notes were sold by the Company on May 15, 1997, and were subsequently
resold to qualified institutional buyers pursuant to Rule 144A 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 the Company (i) file with the Commission this
Registration Statement, (ii) use its best efforts to cause this Registration
Statement to become effective under the Securities Act and (iii) upon the
effectiveness of this Registration Statement, offer to the Holders of the Notes
the opportunity to exchange their Notes for a like principal amount of Exchange
Notes, which will 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
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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 Commission 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.
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
December 16, 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
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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 Covenant; Exchange Offer."
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.
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
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
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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 DTC for the purpose of facilitating the Exchange Offer, and subject
to the establishment thereof, any financial institution that is a participant in
DTC's system may make book-entry delivery of the Notes by causing DTC to
transfer such Notes into the Exchange Agent's account with respect to the Notes
in accordance with DTC's procedures for such transfer. Although delivery of the
Notes may be effected through book-entry transfer into the Exchange Agent's
account at DTC, 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 DTC 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 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
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transfer of such Notes into the Exchange Agent's account at DTC) 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 DTC) 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 DTC 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 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 Commission 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
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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 Bank 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 mail or delivery service:
First Bank National Association
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
Attn: David Hauger
By hand delivery:
First Bank National Association
First Trust Center
Fourth Floor -- Bond Drop Window
180 Fifth Street
St. Paul, Minnesota 55101
Attn: David Hauger
By facsimile (eligible institutions only):
(612) 244-1537
For telephone inquiries:
(612) 244-1197
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, as reflected in the Company's accounting records on the date of exchange.
Accordingly, no gain or loss for accounting purposes
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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 Commission 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 Commission
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 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 Commission 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 relating to the Notes, 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
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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 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 CERTAIN INDEBTEDNESS
SENIOR CREDIT FACILITY
Concurrently with the Laidlaw Acquisition, the Company entered into a bank
credit facility (the "1996 Senior Credit Facility") consisting of (i) a $475
million five and one-half year amortizing senior secured term loan facility (the
"1996 Term Loan Facility"), (ii) three amortizing senior secured term loan
facilities (the
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"1996 Serialized Facilities") in an aggregate original principal amount of $500
million and with ultimate maturities which ranged 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. In connection with the closing of the sale of
all of the Canadian solid waste business acquired in the Laidlaw Acquisition, an
aggregate amount of approximately $517 million was applied to prepayment of the
1996 Term Loan Facility and the 1996 Serialized Facilities.
In June 1997, the Company entered into an amended and restated Senior
Credit Facility. On September 30, 1997, the Company repaid $203 million
outstanding under the Funded Term Loan Facility and $71 million outstanding
under the Revolving Credit Facility from the net proceeds of the 1997 Equity
Offering. In connection with this repayment, the Company further amended its
Senior Credit Facility (the "1997 Senior Credit Facility") on October 1, 1997,
providing for a six and one-half year senior secured $297 million funded term
loan facility (the "Funded Term Loan Facility") a six and one-half year senior
secured $200 million delayed draw term loan facility to finance certain
acquisitions prior to March 31, 1998 (the "Delayed Draw Term Loan Facility"),
and a six and one-half year senior secured $600 million revolving credit
facility (the "Revolving Credit Facility"). The Funded Term Loan Facility is an
amortizing senior secured term loan with annual amortizations of principal
(payable quarterly) increasing from $6 million in 1997 to $60 million in each of
2000, 2001, 2002 and 2003. The Delayed Draw Term Loan Facility may be drawn in
multiple advances and at varying amounts until either (i) the full $200 million
has been drawn or (ii) March 31, 1998, whichever comes first. The Delayed Draw
Term Loan is an amortizing term loan with annual principal reductions equal to a
certain percentage of the outstanding amount as of March 31, 1997. Principal
reductions begin in March 1998 at 10% of the original balance, increasing to 20%
in the years 2000 - 2002, and 30% in 2003.
In addition to the scheduled principal payments above, the Company is also
required to make mandatory prepayments on the 1997 Senior Credit Facility equal
to 100% of the net proceeds from certain asset sales, the issuance of new debt
securities and extraordinary amounts, which include tax refunds, pension plan
reversions and certain insurance proceeds, and 50% of the Net Cash Proceeds (as
defined in the 1997 Senior Credit Facility) from Equity Issuances (as defined in
the 1997 Senior Credit Facility). Furthermore, the Company is also required to
make mandatory prepayments on the 1997 Senior Credit Facility equal to 50% of
the Company's annual excess Cash Flow (as defined in the 1997 Senior Credit
Facility) unless the Company's Senior Debt Ratio (as defined in the 1997 Senior
Credit Facility) for the relevant fiscal year end is less than 2.0 to 1.0.
Mandatory prepayments are applied first to the Term Loan Facility on a pro rata
basis against remaining scheduled principal payments, and second to the
permanent reduction of the Revolving Credit Facility. In no event, however,
shall the Revolving Credit Facility be required to be reduced to an amount less
than $300 million in connection with any such mandatory prepayment.
Amounts outstanding under the 1997 Senior Credit Facility bear interest, at
the Company's option, at either (a) a Base Rate, or (b) a Eurodollar Rate (both
terms as defined in the 1997 Senior Credit Facility) plus, in either case, an
agreed upon applicable margin. The applicable margin will be adjusted from time
to time pursuant to a pricing grid based upon the Company's Leverage Ratio (as
defined in the 1997 Senior Credit Facility) and varies between zero percent and
0.75% for Base Rate loans, and 0.75% and 1.75% for Eurodollar loans. In
addition, if at any time the Company's Senior Debt Ratio is greater than 2.5 to
1.0, the applicable margin for all loans will be increased by 0.25%.
Borrowings under the Revolving Credit Facility may be used for
acquisitions, the issuance of letters of credit, working capital and other
general corporate purposes. Of the amounts available under the Revolving Credit
Facility, no more than $175 million may be used to support the issuance of
letters of credit.
The 1997 Senior Credit Facility is guaranteed by substantially all of the
Company's present and future subsidiaries. In addition, the 1997 Senior Credit
Facility is secured by substantially all the personal property and a pledge of
the stock, of substantially all of the Company's present and future
subsidiaries.
The 1997 Senior Credit Facility contains certain financial covenants
including, but not limited to, a Total Debt to EBITDA Ratio, a Senior Debt to
EBITDA Ratio, a Fixed Charge Coverage Ratio and an Interest Expense Coverage
Ratio (all terms as defined in the Amended Bank Agreement). In addition, the
1997 Senior Credit Facility also limits the Company's ability to make
acquisitions, purchase fixed assets above
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certain amounts, pay dividends, incur additional indebtedness and liens, make
optional prepayments on certain subordinated indebtedness, make investments,
loans or advances, enter into certain transactions with affiliates or enter into
a merger, consolidation or sale of all or a substantial portion of the Company's
assets.
The Company has entered into interest rate protection agreements in an
amount equal to approximately 85% of the Funded Term Loan Facility as of
November 1, 1997.
ALLIED WASTE NA NOTES
Also in connection with the Laidlaw Acquisition, Allied Waste NA issued
$525 million of the Allied Waste NA Notes in a Rule 144A private offering. Net
proceeds from the sale of the Allied Waste NA Notes, after the underwriting
discount and other expenses, were approximately $509 million. The net proceeds
were used to pay a portion of the cash purchase price of the Laidlaw
Acquisition, repay amounts outstanding under the Company's previous $300 million
bank credit facility, fund certain acquisitions and for general corporate
purposes.
The Allied Waste NA Notes cannot be redeemed until December 1, 2001, except
under certain circumstances. Prior to December 1, 2001, the Allied Waste NA
Notes are subject to redemption, at the option of Allied Waste NA, at the
greater of (i) 100% of the 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 a comparable treasury yield plus
75 basis points, plus in each case accrued and unpaid interest to the date of
redemption. At any time prior to December 1, 1999, up to 33% of principal amount
of Allied Waste NA Notes will be redeemable, at the option of Allied Waste NA,
from the proceeds of one or more public offerings of capital stock by the
Company at a redemption price of 110.25% of principal amount, plus accrued
interest. The Allied Waste NA Notes are guaranteed by the Company and
substantially all of Allied Waste NA's subsidiaries, the guarantees of which are
expressly subordinated to the guarantees of the Senior Credit Facility. The
Allied Waste NA Notes contain several covenants, the most restrictive of which
limits Allied Waste NA and its subsidiaries' ability to incur additional
indebtedness without complying with an interest coverage ratio test. Other
covenants contain limitations on payment of dividends except for certain
preferred stock, issuance of redeemable preferred stock, transactions with
affiliates, granting of liens and security interests, sales of assets and the
use of proceeds from sales of assets, mergers and consolidations, and changes of
control. The covenants do permit Allied Waste NA to incur certain indebtedness,
including indebtedness under the Senior Credit Facility, indebtedness issued
and/or assumed in permitted acquisitions and other indebtedness which is limited
to a certain percentage of Allied Waste NA's total assets.
DESCRIPTION OF THE EXCHANGE NOTES
The Exchange Notes will be issued pursuant to an indenture, to be dated as
of May 15, 1997 (the "Indenture"), between the Company 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. Copies of the Indenture and the Registration Rights Agreement
referred to below (see "-- Registration Covenant; Exchange Offer") are available
at the corporate trust office of the Trustee. All references in this section to
the "Company" refer solely to Allied Waste Industries, Inc., the issuer of the
Exchange Notes, and all references in this section to "Allied Waste NA" refer
solely to Allied Waste North America, Inc., and not to their respective
subsidiaries.
GENERAL
The Exchange Notes will be unsecured senior obligations of the Company,
will be limited to $418.0 million aggregate principal amount and will mature on
June 1, 2007.
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The Exchange Notes are effectively subordinated to all existing and future
indebtedness and other liabilities (including trade payables and capital lease
obligations) of the Company's subsidiaries. As of June 30, 1997, the Exchange
Notes will be effectively subordinated to approximately $1,198.0 million of debt
of the Company's subsidiaries. See "Risk Factors -- Holding Company Structure;
Structural Subordination." In addition, subject to certain financial tests, the
Company's Restricted Subsidiaries may from time to time hereafter incur
additional Debt, including under the Senior Credit Facility, to which the
Exchange Notes would be effectively subordinated. See "Certain
Covenants -- Limitation on Debt of the Company and Certain of its Restricted
Subsidiaries" and "-- Limitation on Debt of Allied Waste NA and its Restricted
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).
"Accreted Value" means, as of any date prior to June 1, 2002, an amount per
$1,000 principal amount at maturity of Notes that is equal to the sum of (a) the
initial offering price ($574.36 per $1,000 principal amount at maturity of
Notes) of such Notes and (b) the portion of the excess of the principal amount
of such Notes over such initial offering price which shall have been amortized
through such date, such amount to be so amortized on a daily basis and
compounded semi-annually on each June 1 and December 1 at the rate of 11.30% per
annum from the date of original issue of the Notes through the date of
determination computed on the basis of a 360-day year of twelve 30-day months
and as of any date on or after June 1, 2002, the principal amount of each Note.
"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 in connection with the Acquisition and subsequently
transferred by Laidlaw to Allied Finance.
"Allied Insurance" means Reliant Insurance Company, 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 (i) shares of Capital Stock (other than directors' qualifying
shares) or other ownership interests of a Restricted Subsidiary, (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 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" 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."
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"Bank Facility Capacity Increase" means a replacement, amendment,
supplement, restatement, renewal or other modification of the Senior Credit
Facility that increases the aggregate amount of borrowings permitted under the
Senior Credit Facility.
"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 Senior Credit Facility since the date of the Indenture or (y)
following a Bank Facility Capacity Increase, the Increased Bank Facility Limit,
less principal payments 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 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.
"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 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.
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"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 and extraordinary losses that involve a
present or future cash payment, (g) all non-cash non-recurring charges during
such period, including charges for acquisition-related costs (it being
understood that (x) non-cash non-recurring charges shall not include accruals
for closure and post-closure liabilities and (y) charges, other than charges for
the accruals referred to in Clause (x) above, shall be deemed non-cash charges
until the period that cash disbursements attributable to such charges are made,
at which point such charges shall be deemed cash charges) and (h) the tax effect
of any of the items described in Clauses (a) through (g) 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.
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"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.
"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.
"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 Senior Credit Facility,
as amended pursuant to such Bank Facility Capacity Increase, (ii) the amount
equal to three times Consolidated EBITDA of Allied Waste NA and its Restricted
Subsidiaries 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 Allied Waste NA would be permitted to Incur on such
date under the Consolidated EBITDA Coverage Ratio test described in the first
paragraph under the covenant "Limitation on Debt of Allied Waste NA and its
Restricted Subsidiaries" on the terms contemplated by the Senior Credit
Facility, as amended by the Bank Facility Capacity Increase and (y) the
aggregate amount of Debt outstanding under the Senior Credit Facility 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.
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"Intercompany Agreements" means the Management Agreement between the
Company and Allied Waste NA 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).
"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.
"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 Restricted
Subsidiary, (ii) securities either issued directly or fully
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guaranteed or insured by the government of the United States of America or any
agency or instrumentality thereof having maturities of not more than 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 (ii) and (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 Waste NA 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 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 the
obligor with respect to such 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 Dispositions," (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 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 Capital Stock
pursuant to a registration statement filed under the Securities Act of 1933, as
amended.
"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 Notes.
"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 or such Person.
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"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 Credit Facility" means the Amended and Restated Credit Agreement,
dated as of October 1, 1997, among the Company, Allied Waste NA, Credit Suisse
First Boston, Goldman Sachs Credit Partners L.P., Citibank, N.A. and the other
Lenders referred to therein, or any bank credit agreement that replaces, amends,
supplements, restates or renews such Credit Agreement.
"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.
"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.
"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 "Certain 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 "Certain
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.
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<PAGE> 43
"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.
INTEREST AND PAYMENTS
No cash interest (other than Special Interest (as defined below, if any))
will accrue on the Exchange Notes prior to June 1, 2002. The Exchange Notes will
accrue interest at the rate per annum shown on the front cover of this Offering
Circular from June 1, 2002 or from the most recent Interest Payment Date to
which interest has been paid or provided for, payable semi-annually on June 1
and December 1 of each year, commencing December 1, 2002, until the principal
thereof is paid or made available for payment, to the Person in whose name the
Exchange Notes (or any predecessor Exchange 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 the rate per annum shown on
the front cover of this Offering Circular 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).
Pursuant to the Registration Rights Agreement, the Company has agreed to
file and cause to become effective a registration statement relating to an
exchange offer for the Exchange Notes, or, in lieu thereof, to file and cause to
become effective a resale shelf registration statement for the Exchange Notes.
If such exchange offer or shelf registration statement is not filed or is not
declared effective, or if such exchange offer is not consummated, within the
time periods set forth in the Registration Rights Agreement, Special Interest
will accrue and be payable on the Exchange Notes either temporarily or
permanently. See "-- Registration Covenant; Exchange Offer."
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 an 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.
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<PAGE> 44
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.
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 Exchange
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
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<PAGE> 45
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 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.
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<PAGE> 46
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 the address of such Holder appearing
in the Security Register, in amounts of $1,000 or an integral multiple of $1,000
principal amount, (i) at the following Redemption Price (expressed as a
percentage of Accreted Value) plus any accrued but unpaid Special Interest to
but excluding the Redemption Date (subject to the right of Holders of record on
the relevant Regular Record Date to receive Special Interest due on an Interest
Payment Date that is on or prior to the Redemption Date), if redeemed during the
six-month period beginning on December 1 of the year indicated below:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
----------------------------------------------------- ----------
<S> <C>
2001................................................. 107.000%
</TABLE>
and (ii) at the following Redemption Prices (expressed as percentages of
principal amount) plus any 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 June 1 of each of the years
indicated below:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
----------------------------------------------------- ----------
<S> <C>
2002................................................. 105.650%
2003................................................. 102.825
2004 and thereafter.................................. 100.000
</TABLE>
At any time, or from time to time, prior to June 1, 2000 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 the Company, at a Redemption Price equal to 111.30% of their
Accreted Value as of, together with any accrued but unpaid Special Interest to,
the Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive any Special 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 Notes are to be redeemed, the particular Notes to be
redeemed will be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding 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 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," "-- Change of Control," the 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
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<PAGE> 47
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 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, within one year from the later of the date of such Asset Disposition
or the receipt of such Net Available Proceeds, (A) first, to repayment of Debt
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 Debt as specified in Clause (A), to purchases of Outstanding Notes pursuant
to an Offer to Purchase (to the extent such an offer is not prohibited by the
terms of any Debt then outstanding) at a purchase price equal to (x) in the case
of any such purchase prior to June 1, 2002, 100% of their Accreted Value as of
the purchase date and (y) in the case of any such purchase on or after June 1,
2002, 100% of their principal amount, in each case, plus any accrued interest
(including Special 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, to the
extent required by the terms thereof, any other Debt of the Company that is pari
passu with the Notes at a price no greater than 100% of the principal amount
thereof plus accrued interest to the date of purchase (or 100% of the accreted
value in the case of original issue discount Debt); 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 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). 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 in an amount equal to such
Reinvested Amount, and such amount 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 Note pursuant to such Offer to Purchase are substantially the same as those
described below under "-- Change of Control."
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<PAGE> 48
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 (x) in the case of any such purchase prior
to June 1, 2002, 101% of their Accreted Value as of the purchase date and (y) in
the case of any such purchase on or after June 1, 2002, 101% of their principal
amount, in each case (x) and (y), plus any accrued interest (including Special
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 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 the Company, (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 the Company such that such nominees, when added to any existing director
remaining on the Board of Directors of the Company 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 the Company, (iii) there occurs any transaction or
series of related transactions, and the beneficial owners of the Voting Stock of
the Company 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 the Company (or in the case of a transaction (or series) in which
another entity becomes a successor to the Company, of the successor entity) or
(iv) Allied Waste NA ceases to be a Subsidiary of the Company. (Section 1015).
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 Senior Credit Facility prohibit and the terms of the
indenture relating to the Allied Waste NA Notes limit Allied Waste NA from
paying dividends or other distributions to the Company in respect of the Capital
Stock of Allied Waste NA, and thus may effectively prohibit any repurchase of
Exchange Notes by the Company, in the event of a Change of Control, unless all
indebtedness then outstanding under the Senior Credit Facility and the Allied
Waste NA Notes are 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. See
"Risk Factors -- Holding Company Structure; Structural Subordination."
Prior to the mailing of an Offer Document, the Company will in good faith
seek to obtain any required consents of the lenders under the Senior Credit
Facility and holders of the Allied Waste NA Notes 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 to 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
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<PAGE> 49
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 Holder's 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
Holders 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 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).
REGISTRATION COVENANT; EXCHANGE OFFER
The Company entered into an Exchange and Registration Rights Agreement (the
"Registration Rights Agreement") pursuant to which the Company agreed, for the
benefit of the holders of the Notes, (i) to file with the Commission, within 60
days following the closing of the issuance and sale of the Notes (the
"Closing"), a registration statement (the "Exchange Offer Registration
Statement") under the Securities Act relating to an Exchange Offer (the
"Exchange Offer") pursuant to which securities substantially identical to the
Notes (except that such securities will not contain terms with respect to the
special interest payments described below or transfer restrictions) (the
"Exchange Notes") would be offered in exchange for the then outstanding Notes
tendered at the option of the Holders thereof and (ii) to use its best efforts
to cause the Exchange Offer Registration Statement to become effective as soon
as practicable, but in no case later than 180 days following the Closing. The
Company has further agreed to use its best efforts to commence and complete the
Exchange Offer promptly, but no later that 45 days after such registration
statement has become effective, hold the Exchange Offer open for at least 30
days, and 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 will be available upon request to the Company.
Under existing Commission interpretations, the Exchange Notes would in
general 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 resale of
those Exchange Notes. The Commission has taken the position that Participating
Broker-Dealers may fulfill their prospectus delivery requirements with respect
to such Exchange Notes (other than a resale of any unsold allotment from the
original sale of the Notes) by delivery of the prospectus contained in the
Exchange Offer Registration Statement. Under the Registration Rights Agreement,
the Company is required to allow Participating Broker-Dealers to use the
prospectus contained in the Exchange Offer Registration Statement in connection
with the resale of such Exchange
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Notes. The Exchange Offer 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 in general be freely transferable on such date, the Company will, in
lieu of effecting registration of Exchange Notes, use its best efforts to file a
registration statement under the Securities Act relating to a shelf registration
of the Notes for resale by Holders (such registration, the "Shelf Registration"
and such registration statement, 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 60 days after the Closing. In addition, in the
event that the Purchasers shall not have resold all of the Notes initially
purchased by them from the Company 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 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 until the second
anniversary of the Closing. The Company will, in the event of the Shelf
Registration, 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).
Although the Company has filed the registration statement previously
described, there can be no assurance that the registration statement will become
effective. In the event that (i) the Company has not filed the Exchange Offer
Registration Statement or Shelf Registration Statement on or before the date on
which such registration statement is required to be filed as described above,
(ii) such Exchange Registration Statement or Shelf Registration Statement has
not become 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
as described above, (iii) the Exchange Offer has not been completed within 45
days after the initial effective date of the Exchange Offer Registration
Statement (if the Exchange Offer is then required to be made) or (iv) any
Exchange Offer Registration Statement or Shelf Registration Statement required
as described above 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 cash interest ("Special Interest"), in addition to
any base interest that would otherwise accrue on the Notes, shall accrue and be
payable 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.
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The Notes and the Exchange Notes will be considered collectively to be a
single class and series for all purposes under the Indenture, including waivers,
amendments, redemptions and Offers to Purchase, and for purposes of this
Description of the Exchange Notes (except under this caption "Registration
Covenant; Exchange Offer"), all references herein to "Notes" shall be deemed to
refer collectively to the Notes and any Exchange Notes, unless the context
otherwise requires.
CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
Limitation on Debt of the Company and Certain of its Restricted Subsidiaries
The Company may not Incur any Debt and may not permit any of its Restricted
Subsidiaries (other than Allied Waste NA and its Restricted Subsidiaries) to
Incur any Debt or issue Preferred Stock unless, immediately after giving pro
forma 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 and its Restricted Subsidiaries 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 fiscal quarters, would
be greater than 2.0 to 1.0.
Without regard to the foregoing limitations, the Company and its Restricted
Subsidiaries (other than Allied Waste NA and its Restricted Subsidiaries) may
Incur the following Debt:
(i) Debt under the Senior Credit Facility in an aggregate principal
amount at any one time outstanding not to exceed the Bank Facility Limit
then in effect;
(ii) 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 (ii) 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;
(iii) Debt outstanding on the date of the Indenture;
(iv) Debt consisting of Permitted Interest Rate or Currency Protection
Agreements;
(v) Debt incurred to renew, extend, refinance or refund any
outstanding Debt permitted in Clauses (i) through (iii) above; provided,
however, that such Debt does not exceed the principal amount (or accreted
value in the case of original issue discount Debt) 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 expressly
states that it is subordinate in right of payment to the Exchange Notes
shall only be permitted if (A) the refinancing or refunding Debt is made
subordinate to the Exchange Notes to substantially the same extent as, or a
greater extent than, the Debt being refinanced or refunded is subordinated
to the Exchange Notes 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
(vi) Debt not otherwise permitted to be incurred pursuant to Clauses
(i) through (v) above, which, in aggregate amount, together with the
aggregate amount of all other Debt previously Incurred pursuant
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to the provisions of the Indenture described under this Clause (vi) and
then outstanding, does not exceed $75 million. (Section 1008).
Limitation on Debt of Allied Waste NA and its Restricted Subsidiaries
The Company may not permit Allied Waste NA or any Restricted Subsidiary of
Allied Waste NA 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 Allied Waste NA and its Restricted Subsidiaries 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 or issuance is on
or prior to December 31, 1999 and 2.25 to 1.0 if thereafter. (Section 1009).
Without regard to the foregoing limitations, Allied Waste NA and its
Restricted Subsidiaries may Incur the following Debt:
(i) Debt under the Senior Credit Facility in an aggregate principal
amount at any one time outstanding not to exceed the Bank Facility Limit
then in effect;
(ii) Debt owned by Allied Waste NA to the Company or to any Restricted
Subsidiary or Debt owed by a Restricted Subsidiary of Allied Waste NA 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 (ii) 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;
(iii) Debt outstanding on the date of the Indenture;
(iv) 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 of Allied Waste NA in such
transaction (including by way of merger or consolidation with Allied Waste
NA or another Restricted Subsidiary of Allied Waste NA) and was not issued
in contemplation of such transaction or (B) is issued by Allied Waste NA or
a Restricted Subsidiary of Allied Waste NA 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 (iv) not to
exceed $50 million at any one time outstanding;
(v) Debt consisting or Permitted Interest Rate or Currency Protection
Agreements;
(vi) Debt Incurred to renew, extend, refinance or refund any
outstanding Debt permitted in Clauses (i) through (iv) above; provided,
however, that such Debt does not exceed the principal amount (or accreted
value in the case of original issued discount Debt) 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 expressly
states that it is subordinate in right of payment to the Exchange Notes
shall only be permitted if (A) the refinancing or refunding Debt is made
subordinate to the Exchange Notes to substantially the same extent as, or a
greater extent than, the Debt being refinanced or refunded is subordinated
to the Notes 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 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
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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
(vii) Debt not otherwise permitted to be Incurred pursuant to Clauses
(i) through (vi) 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 (vii) and then
outstanding, does not exceed 5% of the Consolidated Total Assets of Allied
Waste NA and its Restricted Subsidiaries at the time of such Incurrence.
(Section 1009).
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 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 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 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
permitted to Incur at least $1.00 of additional Debt pursuant to the
Consolidated EBITDA Coverage Ratio test described under "Limitation on Debt
of the Company and Certain of its Restricted Subsidiaries" above; or
(3) upon giving effect to such Restricted Payment, the aggregate of
all Restricted Payments (excluding Restricted Payments permitted by Clauses
(i), (iii) and (iv) 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 January 1, 1997 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;
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(b) 100% of the aggregate net cash proceeds from the issuance and
sale (other than to a Restricted Subsidiary) 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 January 1, 1997, 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 January 1, 1997 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 repurchase by the Company of the Warrant to purchase 20.4
million shares of the Company's Common Stock and the repurchase by the
Company or Allied Finance of the Allied Finance Debentures;
(ii) 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;
(iii) any refinancing or refunding of Debt permitted pursuant to
Clause (vi) of the second paragraph under "Limitation on Debt of Allied
Waste NA and its Restricted Subsidiaries" or pursuant to Clause (v) of the
second paragraph under "Limitation on Debt of the Company and Certain of
its Restricted Subsidiaries" above; and
(iv) 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
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 or any other agreement in effect on the date of the
Indenture, (b) pursuant to the Allied Waste NA Notes, including any Guarantees
thereof or Liens securing any of such Debt, (c) pursuant to the Senior Credit
Facility, including any Guarantees of or Liens securing the Debt incurred
thereunder, (d) 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
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and outstanding on such date and not Incurred in anticipation of becoming a
Subsidiary, (e) 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, (f) pursuant to customary non-assignment
provisions in leases entered into in the ordinary course of business, (g)
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, (h) pursuant to Debt
permitted to be Incurred by Allied Waste NA and its Restricted Subsidiaries
pursuant to the provisions of the Indenture described under "Limitation on Debt
of Allied Waste NA and its Restricted Subsidiaries," provided, however, that the
provisions relating to such encumbrance or restriction contained in such Debt
are no more restrictive in any material respect than the restrictions contained
in the indenture pursuant to which the Allied Waste NA Notes were issued or (i)
pursuant to an agreement effecting a renewal, extension, refinancing or
refunding of Debt Incurred pursuant to an agreement referred to in Clause (a),
(b), (c) or (h) 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
The Company may not incur any Lien on property or assets of the Company now
owned or hereafter acquired without making effective provision for securing the
Exchange Notes, provided that in the event such Lien secures Debt which is
subordinate in right of payment to the Exchange Notes, the Exchange Notes are
secured on a basis prior to such Debt as to such property or assets 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) the Company or a Restricted Subsidiary or (b)
another Restricted Subsidiary 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 noncash 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), delivers a
written opinion 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 Repurchase or to the Intercompany Agreements as in effect
on the date of the Indenture or the transactions contemplated thereby. (Section
1013).
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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 transaction that 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 the Company 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 holding the Allied Canada Debentures and 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) (x) in the event such Subsidiary is not a Subsidiary of Allied
Waste NA, the Consolidated EBITDA Coverage Ratio of the Company and its
Restricted Subsidiaries 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 and
(y) in the event such Subsidiary is a Subsidiary of Allied Waste NA, the
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Consolidated EBITDA Coverage Ratio of Allied Waste NA and its Restricted
Subsidiaries 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.
In addition and notwithstanding the foregoing, no Restricted Subsidiary 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; or
(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.
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. Each reference herein to a
Restricted Subsidiary of Allied Waste NA refers to a Restricted Subsidiary that
is a Subsidiary of Allied Waste NA. (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, provided that this Clause (i) will
not prohibit any such consolidation or merger by a Restricted Subsidiary if (x)
such Restricted Subsidiary ceases to be a Restricted Subsidiary in such
consolidation or merger or (y) such consolidation or merger is with or into the
Company or another 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, provided that this Clause
(ii) will not prohibit any such consolidation or merger with or into a
Restricted Subsidiary if such Restricted Subsidiary ceases to be a Restricted
Subsidiary in such consolidation or merger; (iii) may not, directly or
indirectly, in one or a series of transactions, transfer, convey, sell, lease or
otherwise dispose of all or
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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 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 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 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
and its Restricted Subsidiaries immediately prior to such transaction (or
series);
(4) if such transaction (or series) involves Allied Waste NA or any of
its Restricted Subsidiaries, either (x) Allied Waste NA or its 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 described in the first paragraph under "Certain
Covenants -- Limitation on Debt of Allied Waste NA and its Restricted
Subsidiaries" above or (y) the Consolidated EBITDA Coverage Ratio of Allied
Waste NA (or its successor entity) and its Restricted Subsidiaries 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 December 30, 1996 and the date that is twelve months
before the date of such transaction (or series);
(5) if such transaction (or series) involves the Company or any of its
Restricted Subsidiaries (other than Allied Waste NA and any of its
Restricted Subsidiaries), either (x) the Company or its 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 described under "Certain Covenants -- Limitation on Debt of the
Company and Certain of its Restricted Subsidiaries" or (y) the Consolidated
EBITDA Coverage Ratio of the Company (or its successor entity) and its
Restricted Subsidiaries for the most recently ended
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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 December 30, 1996 and
the date that is twelve months before the date of such transaction (or
series);
(6) if, as a result of any such transaction, property or assets of the
Company would become subject to a Lien prohibited by the covenant described
above under "Certain Covenants -- Limitations on Liens," the Company or its
successor entity will have secured the Notes as required by such covenant;
and
(7) unless such transaction (or series) is of the type referred to in
Clause (iii) or (iv) 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 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, continued for 30 days; (b)
failure to pay principal of (or premium, if any, on) any Exchange Note when due;
(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 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, notes or other evidences of, or
obligations constituting, Debt by the Company 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 or any Restricted Subsidiary, in each case 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 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
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. If an Event of
Default of the type described in Clause (g) above occurs, the Accreted Value (if
such event occurs prior to June 1, 2002) or the principal amount (if such event
occurs on or after June 1, 2002) of and any accrued interest (including Special
Interest) on the Exchange Notes then outstanding will become immediately due and
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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 Accreted Value or principal amount, as the case may
be, 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 Accreted Value or
principal amount, as the case may be, of (and premium, if any) or any interest
(including Special Interest) on such Exchange Note on or after the respective
due dates expressed in such Exchange Note. (Sections 507 and 508).
In the case any Event of Default occurs 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 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, 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
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
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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; and (iv) 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 (including Special Interest)
on, any Exchange Note, (b) reduce the Accreted Value or principal amount, as the
case may be, of (or the premium, if any), or interest (including Special
Interest) on, any Exchange Note, (c) change the place or currency of payment of
Accreted Value or principal amount, as the case may be, of (or premium, if any),
or interest (including Special 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 or (h) 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).
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 laws of the State of New York. (Section 112).
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF
AN INVESTMENT IN THE EXCHANGE NOTES
The following summary of the principal United States federal income tax
consequences of ownership of Exchange Notes deals only with Exchange Notes held
as capital assets by initial purchasers, and not with special classes of
holders, including, without limitation, dealers in securities or currencies,
banks, certain U.S. expatriates, tax-exempt organizations, life insurance
companies, persons that hold Exchange Notes that are a hedge or that are hedged
against currency risks or that are part of a straddle or conversion transaction,
or persons whose functional currency is not the U.S. dollar. The summary is
based on the Internal Revenue Code of 1986, as amended (the "Code"), its
legislative history, existing and proposed regulations thereunder, published
rulings and court decisions, all as currently in effect and all subject to
change at any time, perhaps with retroactive effect. This summary does not
address the effect of any United States state or local law on a holder of
Exchange Notes.
For purposes of this discussion, the term "United States Holder" means a
beneficial owner of an Exchange Note who or that is (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, (iii) a trust whose administration is subject to the
primary supervision of a U.S. court and one or more U.S. fiduciaries of which
have authority to control all substantial decisions of the trust, or (iv) an
estate the income of which is includable in gross income for U.S. federal income
tax purposes regardless of its source, and the term "United States Alien Holder"
means a beneficial owner of an Exchange Note who or that is not a United States
Holder.
Prospective purchasers of Exchange Notes should consult their own tax
advisors concerning the consequences, in their particular circumstances, under
the Code and the laws of any other state, local or foreign taxing jurisdiction,
of the ownership of Exchange Notes.
UNITED STATES HOLDERS
Original Issue Discount
General. The Exchange Notes will be treated as issued at an original issue
discount because the excess of an Exchange Note's "stated redemption price at
maturity" over its "issue price" is more than a "de minimis amount." Generally,
the issue price of an Exchange Note will be the first price at which a
substantial amount of Exchange Notes included in the issue of which the Exchange
Note is a part is sold to other than bond houses, brokers, or similar persons or
organizations acting in the capacity of underwriters, placement agents, or
wholesalers. The stated redemption price at maturity of an Exchange Note is the
total of all payments provided by the Exchange Note that are not payments of
"qualified stated interest." A qualified stated interest payment is generally
any one of a series of stated interest payments on an Exchange Note that are
unconditionally payable at least annually at a single fixed rate applied to the
outstanding principal amount of the Exchange Note. Under this rule, none of the
interest payments on the Exchange Notes will be qualified stated interest.
In general, a United States Holder is required to include original issue
discount ("OID") in income calculated on a constant-yield method before the
receipt of cash attributable to such income, regardless of whether the United
States Holder is otherwise a cash method or accrual method taxpayer. The amount
of OID includable in income by a United States Holder is the sum of the daily
portions of OID with respect to the Exchange Note for each day during the
taxable year or portion of the taxable year on which the United States Holder
holds such Exchange Note ("accrued OID"). The daily portion is determined by
allocating to each day in any "accrual period" a pro rata portion of the OID
allocable to that accrual period. Accrual periods with respect to an Exchange
Note may be of any length selected by the United States Holder and may vary in
length over the term of the Exchange Note as long as (i) no accrual period is
longer than one year and (ii) each scheduled payment of interest or principal on
the Exchange Note occurs on either the final or first day of an accrual period.
The amount of OID on an Exchange Note that is allocable to an accrual period
equals the product of the Exchange Note's adjusted issue price at the beginning
of the accrual period and such Exchange Note's yield to maturity (determined on
the basis of compounding at the close of each accrual
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period and properly adjusted for the length of the accrual period). The
"adjusted issue price" of an Exchange Note at the beginning of any accrual
period is the issue price of the Exchange Note increased by (x) the amount of
accrued OID for each prior accrual period and decreased by (y) the amount of any
payments previously made on the Exchange Note. The amount of OID allocable to an
initial short accrual period may be computed using any reasonable method if all
other accrual periods other than a final short accrual period are of equal
length. The amount of OID allocable to the final accrual period is the
difference between (x) the amount payable at the maturity of the Exchange Note
and (y) the Exchange Note's adjusted issue price as of the beginning of the
final accrual period. Under the foregoing rules, a United States Holder will
generally have to include in gross income increasingly greater amounts of OID in
successive accrual periods.
Acquisition Premium. A United States Holder that purchases an Exchange
Note for an amount less than or equal to the sum of all amounts payable on the
Exchange Note after the purchase date but in excess of its adjusted issue price
(as determined above under "Original Issue Discount -- General") (any such
excess being "acquisition premium") and that does not make the election
described below under "Election to Treat All Interest as Original Issue
Discount" shall reduce the daily portions of OID by a fraction, the numerator of
which is the excess of the United States Holder's adjusted basis in the Exchange
Note immediately after its purchase over the adjusted issue price of the
Exchange Note, and the denominator of which is the excess of the sum of all
amounts payable on the Exchange Note after the purchase date over the Exchange
Note's adjusted issue price.
Market Discount. An Exchange Note will be treated as purchased at a market
discount (a "Market Discount Exchange Note") if (i) a United States Holder's
purchase price for the Exchange Note is less than the Exchange Note's issue
price (as determined above under "Original Issue Discount -- General") and (ii)
the Exchange Note's "revised issue price" exceeds such purchase price by at
least 1/4 of 1 percent of such Exchange Note's stated redemption price at
maturity multiplied by the number of complete years to the Exchange Note's
maturity after the purchase date. If such excess is not sufficient to cause the
Exchange Note to be a Market Discount Exchange Note, then such excess
constitutes "de minimis market discount" and such Exchange Note is not subject
to the rules discussed in the following paragraphs. The Code provides that, for
these purposes, the "revised issue price" of an Exchange Note generally equals
its issue price, increased by the amount of any OID that has accrued on the
Exchange Note.
Any gain recognized on the maturity or disposition of a Market Discount
Exchange Note will be treated as ordinary income (generally interest income) to
the extent that such gain does not exceed the accrued market discount on such
Exchange Note. Alternatively, a United States Holder of a Market Discount
Exchange Note may elect to include market discount in income currently as it
accrues (under either a ratable or constant yield method) over the life of the
Exchange Note. Such an election will apply to all debt instruments with market
discount acquired by the electing United States Holder on or after the first day
of the first taxable year to which the election applies. This election may not
be revoked without the consent of the Service. Such currently included market
discount will increase a United States Holder's tax basis for the Exchange Note
and generally is treated as ordinary interest income.
Market discount on a Market Discount Exchange Note will accrue on a
straight-line basis unless the United States Holder elects to accrue such market
discount on a constant-yield method. Such an election will apply only to the
Exchange Note with respect to which it is made and may not be revoked. A United
States Holder of a Market Discount Exchange Note that does not elect to include
market discount in income currently may be required to defer deductions for all
or a portion of the interest expense on any borrowings allocable to such
Exchange Note until the maturity or taxable disposition of such Exchange Note.
Election to Treat All Interest as Original Issue Discount. A United States
Holder may elect to include in gross income all interest that accrues on an
Exchange Note using the constant-yield method described above under the heading
"Original Issue Discount -- General," with the modifications described below.
For purposes of this election, interest includes stated interest, OID, de
minimis original issue discount, market discount, de minimis market discount and
unstated interest, as adjusted by an acquisition premium.
In applying the constant-yield method to an Exchange Note with respect to
which this election has been made, the issue price of the Exchange Note will
equal its cost to the electing United States Holder, the issue
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date of the Exchange Note will be the date of its acquisition by the electing
United States Holder, and no payments on the Exchange Note will be treated as
payments of qualified stated interest. This election will generally apply only
to the Exchange Note with respect to which it is made and may not be revoked
without the consent of the Service. If the election to apply the constant-yield
method to all interest on an Exchange Note is made with respect to a Market
Discount Exchange Note, the electing United States Holder will be treated as
having made the election discussed above under "Original Issue
Discount -- Market Discount" to include market discount in income currently over
the life of all debt instruments held or thereafter acquired by such United
States Holder.
Purchase, Sale and Retirement of the Exchange Notes
A United States Holder's tax basis in an Exchange Note will generally be
its cost, increased by the amount of any OID or market discount included in the
United States Holder's income with respect to the Exchange Note and the amount,
if any, of income attributable to de minimis market discount included in the
United States Holder's income with respect to the Exchange Note, and reduced by
the amount of all payments on the Exchange Note.
A United States Holder will generally recognize gain or loss on the sale or
retirement of an Exchange Note equal to the difference between the amount
realized on the sale or retirement and the adjusted tax basis of the Exchange
Note. Except to the extent described above under "Original Issue
Discount -- Market Discount," gain or loss recognized on the sale or retirement
of an Exchange Note will be capital gain or loss and will be long-term capital
gain or loss if the Exchange Note was held for more than one year at the time of
the sale or retirement.
UNITED STATES ALIEN HOLDERS
Under present United States federal income and estate tax law, and subject
to the discussion of backup withholding below:
(i) payments of principal, premium (if any) and OID by the Company or
any of its paying agents to any holder of an Exchange Note that is a United
States Alien Holder will not be subject to United States federal
withholding tax if, in the case of interest or OID, (a) the beneficial
owner of the Exchange Note does not actually or constructively own 10% or
more of the total combined voting power of all classes of stock of the
Company entitled to vote, (b) the beneficial owner of the Exchange Note is
not (x) a controlled foreign corporation that is related to the Company
through stock ownership, or (y) a bank receiving interest described in
Section 881(c)(3)(A) of the Code, and (c) either (A) the beneficial owner
of the Exchange Note certifies to the Company or its agent, under penalties
of perjury, that it is not a United States Holder and provides its name and
address or (B) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business (a "financial institution") and holds the Exchange Note
certifies to the Company or its agent under penalties of perjury that such
statement has been received from the beneficial owner by it or by a
financial institution between it and the beneficial owner and furnishes the
payor with a copy thereof;
(ii) a United States Alien Holder of an Exchange Note will not be
subject to United States federal withholding tax on any gain realized on
the sale or retirement of an Exchange Note unless (a) such holder is an
individual who is present in the United States for 183 days or more during
the taxable year and certain other conditions are met, or (b) the gain is
effectively connected with a United States trade or business of the holder,
or if an income tax treaty applies, is generally attributable to a United
States "permanent establishment" maintained by the holder; and
(iii) an Exchange Note held by an individual who at death is not a
citizen or resident of the United States will not be includable in the
individual's gross estate for purposes of the United States federal estate
tax as a result of the individual's death if (a) the individual did not
actually or constructively own 10% or more of the total combined voting
power of all classes of stock of the Company entitled to vote and (b) the
income on the Exchange Note would not have been effectively connected with
a United States trade or business of the individual at the individual's
death.
63
<PAGE> 65
If a United States Alien Holder is engaged in a trade or business in the
United States and OID on the Exchange Note is effectively connected with the
conduct of such trade or business (or, if an income tax treaty applies, and the
United States Alien Holder maintains a United States "permanent establishment"
to which the OID is generally attributable), the United States Alien Holder,
although exempt from the withholding tax discussed in the preceding paragraph
(i) (provided that such holder furnishes a properly executed IRS Form 4224 on or
before any payment date to claim such exemption), may be subject to United
States federal income tax on such OID in the same manner as if it were a United
States person.
In addition, a foreign corporation that is a holder of an Exchange Note may
be subject to a branch profits tax equal to 30% of its effectively connected
earnings and profits for the taxable year, subject to certain adjustments,
unless it qualifies for a lower rate under an applicable tax treaty. For this
purpose, OID on an Exchange Note or gain on the disposition of an Exchange Note
will be included in earnings and profits if such OID or gain is effectively
connected with the conduct by the foreign corporation of a trade of business in
the United States.
Recently proposed Internal Revenue Service Treasury regulations (the
"Proposed Regulations") would provide alternative methods for satisfying the
certification requirement described in clause (i)(c) above. The Proposed
Regulations also would require, in the case of Exchange Notes held by a foreign
partnership, that (x) the certification described in clause (i)(c) above be
provided by the partners rather than by the foreign partnership and (y) the
partnership provide certain information, including a United States taxpayer
identification number. A look-through rule would apply in the case of tiered
partnerships. The Proposed Regulations are proposed to be effective for payments
made after December 31, 1997. There can be no assurance that the Proposed
Regulations will be adopted or as to the provisions that they will include if
and when adopted in temporary or final form.
BACKUP WITHHOLDING AND INFORMATION REPORTING
United States Holders
In general, information reporting requirements will apply to payments of
principal, any premium and the proceeds of the sale of an Exchange Note before
maturity within the United States to, and to the accrual of OID on an Exchange
Note with respect to, non-corporate United States Holders, and "backup
withholding" at a rate of 31% will apply to such payments and to payments of OID
if the United States Holder fails to provide an accurate taxpayer identification
number or is notified by the Internal Revenue Service that it has failed to
report all interest and dividends required to be shown on its federal income tax
returns.
United States Alien Holders
Under current law, information reporting on Internal Revenue Service Form
1099 and backup withholding will not apply to payments of principal, premium (if
any) and OID made by the Company or a paying agent to a United States Alien
Holder on an Exchange Note; provided, the certification described in clause
(i)(c) under "United States Alien Holders" above is received; and provided
further that the payor does not have actual knowledge that the holder is a
United States person. The Company or a paying agent, however, may report (on
Internal Revenue Service Form 1042S) payments of OID on the Exchange Notes. See
the discussion above with respect to the rules under the Proposed Regulations.
Payments of the proceeds from the sale by a United States Alien Holder of
an Exchange Note made to or through a foreign office of a broker will not be
subject to information reporting or backup withholding, except that if the
broker is a United States person, a controlled foreign corporation for United
States tax purposes or a foreign person 50% or more of whose gross income is
effectively connected with a United States trade or business for a specified
three-year period, information reporting may apply to such payments. Payments of
the proceeds from the sale of an Exchange Note to or through the United States
office of a broker is subject to information reporting and backup withholding
unless the holder or beneficial owner certifies as to its non-United States
status or otherwise establishes an exemption from information reporting and
backup withholding.
64
<PAGE> 66
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 February 14, 1998 (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.
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.
65
<PAGE> 67
The audited consolidated financial statements of Laidlaw Solid Waste
Management Group incorporated by reference in this Prospectus and elsewhere in
the Registration Statement have been audited by Coopers & Lybrand, independent
public accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in accounting and auditing.
66
<PAGE> 68
======================================================
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
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Prospectus Summary.................... 3
Risk Factors.......................... 10
Disclosure Regarding Forward Looking
Statements.......................... 16
The Company........................... 17
The Exchange Offer.................... 25
Certain Federal Income Tax
Consequences of the Exchange
Offer............................... 32
Description of Certain Indebtedness... 32
Description of the Exchange Notes..... 34
Certain Federal Income Tax
Consequences of an Investment in the
Exchange Notes...................... 61
Plan of Distribution.................. 65
Legal Matters......................... 65
Experts............................... 65
</TABLE>
======================================================
======================================================
ALLIED WASTE
INDUSTRIES, INC.
$418,000,000
OFFER TO EXCHANGE
ITS 11.30% SENIOR DISCOUNT NOTES
DUE 2007 FOR 11.30% SENIOR
DISCOUNT NOTES DUE 2007 THAT
HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
NOVEMBER 10, 1997
======================================================
<PAGE> 69
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.
II-1
<PAGE> 70
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 DESCRIPTION
- ------ ------------------------------------------------------------------------------------
<C> <S>
3.1 Certificate of Incorporation of the Company. Exhibit 3.1 to the Company's Annual
Report on Form 10-K is incorporated herein by reference.
3.2 Bylaws of the Company. Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
is incorporated herein by reference.
4.1 Indenture, dated as of May 15, 1997, by and among the Company and First Bank
National Association with respect to the Notes and Exchange Notes.
4.2 Form of Exchange Note (included in Exhibit 4.1).
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, Goldman, Sachs & Co., Merrill Lynch & Co., and Credit Suisse First Boston.
23.1 Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Coopers & Lybrand.
24.1 Power of Attorney.*
25.1 Statement of Eligibility and Qualification of Trustee on Form T-1 of First Bank
National Association under the Trust Indenture Act of 1934.
99.1 Letter of Transmittal for the Notes.
</TABLE>
- ---------------
* previously filed
(B) FINANCIAL STATEMENT SCHEDULES
Schedules are omitted since the information required to be submitted has
been included in the Consolidated Financial Statements of the Company or the
notes thereto, or the required information is not applicable.
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
II-2
<PAGE> 71
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.
II-3
<PAGE> 72
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Scottsdale, State of Arizona on
November 7, 1997.
ALLIED WASTE INDUSTRIES, INC.
By: /s/ PETER S. HATHAWAY
------------------------------------
Peter S. Hathaway
Vice President -- Chief Accounting
Officer
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 November 7, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------ ------------------------------------------------
<C> <S> <C>
* Chairman of the Board of Directors
- ------------------------------------------
Roger A. Ramsey
* Director, President and Chief Executive Officer
- ------------------------------------------ (Principal Executive Officer)
Thomas H. Van Weelden
* Vice President -- Chief Financial Officer
- ------------------------------------------ (Principal Financial Officer)
Henry L. Hirvela
/s/ PETER S. HATHAWAY Vice President -- Chief Accounting Officer
- ------------------------------------------ (Principal Accounting Officer)
Peter S. Hathaway
* Director
- ------------------------------------------
Nolan Lehmann
* Director
- ------------------------------------------
Alan B. Shepard
* Director
- ------------------------------------------
Brian A. O'Leary
* Director
- ------------------------------------------
Michael Gross
* Director
- ------------------------------------------
David B. Kaplan
* Director
- ------------------------------------------
Antony P. Ressler
* Director
- ------------------------------------------
Howard A. Lipson
* Director
- ------------------------------------------
Dennis Hendrix
</TABLE>
II-4
<PAGE> 73
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------ ------------------------------------------------
<C> <S> <C>
* Director
- ------------------------------------------
Warren B. Rudman
* Director
- ------------------------------------------
Vincent Tese
* By /s/ PETER S. HATHAWAY
- ------------------------------------------
Peter S. Hathaway
Attorney-in-fact
</TABLE>
II-5
<PAGE> 74
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ ------------------------------------------------------------------------------------
<C> <S>
3.1 Certificate of Incorporation of the Company. Exhibit 3.1 to the Company's Annual
Report on Form 10-K is incorporated herein by reference.
3.2 Bylaws of the Company. Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
is incorporated herein by reference.
4.1 Indenture, dated as of May 15, 1997, by and among the Company and First Bank
National Association with respect to the Notes and Exchange Notes.
4.2 Form of Exchange Note (included in Exhibit 4.1).
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, Goldman, Sachs & Co., Merrill Lynch & Co., and Credit Suisse First Boston.
23.1 Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Coopers & Lybrand
24.1 Power of Attorney.*
25.1 Statement of Eligibility and Qualification of Trustee on Form T-1 of First Bank
National Association under the Trust Indenture Act of 1934.
99.1 Letter of Transmittal for the Notes.
</TABLE>
- ---------------
* previously filed
<PAGE> 1
EXHIBIT 4.1
Conformed Copy
ALLIED WASTE INDUSTRIES, INC.
As Issuer
to
FIRST BANK NATIONAL ASSOCIATION
As Trustee
----------------
Indenture
Dated as of May 15, 1997
----------------
$418,000,000
11.30% SENIOR DISCOUNT NOTES DUE 2007
<PAGE> 2
ALLIED WASTE INDUSTRIES, INC.
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
----------- -------
<S> <C> <C>
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
</TABLE>
- --------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
(a)(1)(B) ............................................... 513
(a)(2) ............................................... Not Applicable
(b) ............................................... 508
(c) ............................................... 104
Section 317(a)(1) ............................................... 503
(a)(2) ............................................... 504
(b) ............................................... 1003
Section 318(a) ............................................... 107
</TABLE>
INDENTURE, dated as of May 15, 1997, among ALLIED WASTE INDUSTRIES, INC., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at 15880 North
Greenway-Hayden Loop, Suite 100, Scottsdale, AZ 85260, and FIRST BANK NATIONAL
ASSOCIATION, a national banking association, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
$418,000,000 aggregate principal amount of its 11.30% Senior Discount Notes due
2007(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.
The Company owns beneficially and of record 100% of the
Capital Stock of Allied Waste North America, Inc. ("Allied Waste N.A."); the
Company and Allied Waste N.A. are members of the same consolidated group of
companies and are engaged in related businesses.
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 and (ii) to make this Indenture a
valid agreement of the Company, all in accordance with their respective terms,
have been done.
<PAGE> 4
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 and the Securities 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
-2-
<PAGE> 5
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 and the Securities 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
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) all references in this Indenture to the "principal" of any
Security shall refer to the Accreted Value of such Security and all
references in this Indenture to the "principal amount" of any Security
shall refer to the amount of the principal sum stated as payable by the
Company on June 1, 2007 to the Holder of such Security in the first
paragraph of the form of face of the Securities in Section 202, in each
case unless the context otherwise requires;
(6) references in this Indenture to the "Collateral
Agreement," to the requirements thereof and to the related terms
"Collateral," "Collateral Account" and "Credit Suisse Letter of Credit"
shall be applicable only if the Collateral Agreement is, and such
references shall not be applicable if the Collateral Agreement is not,
executed and delivered by the Company pursuant to the requirements of
the Note Purchase Agreement;
(7) 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
-3-
<PAGE> 6
(8) 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.
"Accreted Value" means, (a) as of any date prior to June 1,
2002, an amount per $1,000 principal amount of Securities that is equal to the
sum of (i) the initial offering price ($574.36 per $1,000 principal amount of
Notes) of such Securities and (ii) the portion of the excess of the principal
amount of such Securities over such initial offering price which shall have been
amortized through such date, such amount to be so amortized on a daily basis and
compounded semi-annually on each June 1 and December 1 at the rate of 11.30% per
annum from the date of original issue of the Securities through the date of
determination computed on the basis of a 360-day year of twelve 30-day months
and (b) as of any date on or after June 1, 2002, the principal amount of each
Security.
"Acquisition" means the acquisition by the Company and certain
of its Subsidiaries, pursuant to a Stock Purchase Agreement dated September 17,
1996 among the Company, Allied Waste N.A., Allied Canada, Laidlaw 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.
"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.
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"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% Junior Subordinated Debenture
of Allied Canada issued to Laidlaw in connection with the Acquisition and
subsequently transferred by Laidlaw to Allied Finance.
"Allied Finance" means Allied Waste Finance (Canada) Ltd., a
Canadian corporation and a Subsidiary of the Company.
"Allied Finance Debentures" means the Zero Coupon Junior
Subordinated Debenture of Allied Finance and the 7% Junior Subordinated
Debenture of Allied Finance issued to Laidlaw in exchange for the Allied Canada
Debentures issued to Laidlaw in connection with the Acquisition.
"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 Waste N.A." has the meaning specified in the second
recital herein.
"Allied Waste N.A. Notes" means the 10 1/4% Senior
Subordinated Notes due 2006 issued by Allied Waste N.A.
"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
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<PAGE> 8
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, (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 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, dated as of
December 30, 1996 among the Company, Allied Waste N.A., Goldman Sachs Credit
Partners L.P., Credit Suisse, Citibank, N.A. and the other Lenders referred to
therein, 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
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<PAGE> 9
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, the
board of directors of the Company 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 means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company 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
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<PAGE> 10
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).
"Change of Control" has the meaning specified in Section
1015(c).
"Collateral" has the meaning specified in Section 1101.
"Collateral Account" has the meaning specified in Section
1101.
"Collateral Agreement" means the Senior Discount Note
Collateral Agreement, dated as of May 15, 1997, between the Company and First
Bank National Association, as Trustee, if such agreement is executed and
delivered by the Company pursuant to the requirements of the Note Purchase
Agreement.
"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.
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<PAGE> 11
"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.
"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
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<PAGE> 12
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 Allied Waste N.A. of the
Subsidiaries of the Company, 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
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<PAGE> 13
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 (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, (vii) all non-cash non-recurring charges during
such period, including charges for acquisition-related costs (it being
understood that (A) non-cash non-recurring charges shall not include accruals
for closure and post-closure liabilities and (B) charges, other than charges for
the accruals referred to in Clause (A) above, shall be deemed non-cash charges
until the period that cash disbursements
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<PAGE> 14
attributable to such charges are made, at which point such charges shall be
deemed cash charges) and (viii) the tax effect of any of the items described in
Clauses (i) through (vii) 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, however, that,
for any particular period (or portion thereof) during which any Subsidiary of
such Person was an 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.
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<PAGE> 15
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"Credit Suisse" means Credit Suisse First Boston Corporation.
"Credit Suisse Letter of Credit" means the irrevocable letter
of credit, dated May 15, 1997, issued by Credit Suisse in favor of the Trustee
in the amount of $12.5 million, if such letter of credit is issued pursuant to
the requirements of the Collateral Agreement.
"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.
"Defaulted Interest" has the meaning specified in
Section 308.
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<PAGE> 16
"defeasance" has the meaning specified in Section 1202.
"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 May 15, 1997, among the
Company, Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Credit Suisse, 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
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<PAGE> 17
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.
"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.
"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.
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<PAGE> 18
"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 Allied Waste N.A. and its
Restricted Subsidiaries 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 Allied Waste N.A. would be permitted to
Incur on such date under the Consolidated EBITDA Coverage Ratio test set forth
in the first paragraph of Section 1009 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
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<PAGE> 19
Indenture Act that are deemed to be a part of and govern this instrument and any
such supplemental indenture, respectively.
"Initial Purchasers" means Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Credit Suisse, as purchasers of
the Securities from the Company pursuant to the Note Purchase Agreement.
"Intercompany Agreements" means the Management Agreement
between the Company and Allied Waste N.A. dated November 15, 1996.
"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.
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<PAGE> 20
"Laidlaw" means Laidlaw Inc., a corporation organized under
the laws of Canada.
"Laidlaw Securities Purchase Agreement" means the Securities
Purchase Agreement, dated as of April 21, 1997, among Apollo Investment Fund
III, L.P., a Delaware limited partnership, Apollo Overseas Partners III, L.P., a
Delaware limited partnership, and Apollo (U.K.) Partners III, L.P., an English
limited partnership, Blackstone Capital Partners II Merchant Banking Fund L.P.,
a Delaware limited partnership, Blackstone Offshore Capital Partners II L.P., a
Cayman Islands limited partnership, and Blackstone Family Investment Partnership
II L.P., a Delaware limited partnership, Laidlaw and Laidlaw Transportation,
Inc., a Delaware corporation and a wholly-owned subsidiary of Laidlaw, and the
Company.
"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.
"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
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<PAGE> 21
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 May 1, 1997, 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).
"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".
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<PAGE> 22
"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 quar-
terly 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
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<PAGE> 23
pursuant to the Offer to Purchase. The Offer Document shall also state:
(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 (x) in the event the Purchase Date is prior to June
1, 2002, any Security not tendered or tendered but not purchased by the
Company pursuant to the Offer to Purchase will continue to accrete in
value and any Special Interest thereon will continue to accrue and (y)
in the event the Purchase Date is on or after June 1, 2002, interest on
any Security not tendered or tendered but not purchased by the Company
pursuant to the Offer to Purchase will continue to accrue;
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(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 the principal thereof shall cease to accrete
in value and any 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);
(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
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<PAGE> 25
(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 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, 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, to any officer of a 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;
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<PAGE> 26
(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) in trust or set aside and
segregated in trust by the Company (if the Company 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
Outstanding, 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.
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<PAGE> 27
"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 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
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<PAGE> 28
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 (ii) and (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 Waste N.A., 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 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 the obligor with respect to such
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
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<PAGE> 29
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 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 (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
Capital 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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<PAGE> 30
"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.
"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(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
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<PAGE> 31
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
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<PAGE> 32
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
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.
"Repurchase" means the repurchase, pursuant to the Laidlaw
Securities Purchase Agreement, by the Company of the Allied Finance Debentures
held by Laidlaw and a warrant to acquire 20.4 million shares of Common Stock of
the Company held by Laidlaw Transportation, Inc.
"Required Filing Dates" has the meaning specified in Section
1016.
"Restricted Global Security" has the meaning specified in
Section 201.
"Restricted Payment" has the meaning specified in Section
1010.
"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.
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"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 Regulation S Securities.
"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.
"Shelf Registration Statement" means a shelf registration
statement under the Securities Act filed by the Company, if required by, and
meeting the requirements of,
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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.
"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. Except as otherwise expressly
provided or unless the context otherwise requires, references herein to
"Subsidiary" shall mean a Subsidiary of the Company.
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"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.
"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, "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
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<PAGE> 36
(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 or the
Trustee, means any vice president of such Person, whether or not designated by a
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" 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.
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"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;
(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.
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<PAGE> 38
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 and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent
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<PAGE> 39
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
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<PAGE> 40
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 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 accel-
eration 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
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<PAGE> 41
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 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
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such appointment with regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and the Company.
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 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, transmitted by
facsimile transmission (confirmed by guaranteed overnight courier) to
the following facsimile number: (612) 244-0711 or to any other
facsimile number previously furnished in writing to the Company by the
Trustee, or
(2) the Company 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) 423-9424 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
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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 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 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.
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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 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 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, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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) 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
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<PAGE> 45
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 Forms
SECTION 201. Forms Generally; Initial Forms of Rule 144A and Regulation S
Securities.
The Securities 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,
as evidenced by their execution thereof.
The definitive Securities 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, 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 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
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<PAGE> 46
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".
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 (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 MEETING THE REQUIREMENTS OF 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), (4) 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 (IF AVAILABLE), OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND, IN EACH CASE (1) THROUGH (5), IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.
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<PAGE> 47
[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.]
THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT. FOR PURPOSES OF
SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986,
AS AMENDED, THE ISSUE PRICE OF THIS SECURITY IS 57.436% OF ITS PRINCIPAL AMOUNT,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $425.64 PER $1,000 OF STATED FACE
AMOUNT, THE ISSUE DATE IS MAY 15, 1997 AND THE YIELD TO MATURITY IS 11.30%.
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<PAGE> 48
ALLIED WASTE INDUSTRIES, INC.
11.30% SENIOR DISCOUNT NOTES DUE 2007
[If Restricted Global Security - CUSIP No. 019589AB6]
[If Regulation S Security - CUSIP No. U01961AA6]
[If Regulation S Global Security - ISIN No. USU01961AA63]
No. __________ $________
Allied Waste Industries, 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 (such amount the "principal
amount" of this Security) [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
$418,000,000 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 June
1, 2007 and to pay interest thereon from June 1, 2002 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 December 1,
2002, at the rate of 11.30% 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 13.30% 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 cash interest ("Special Interest"), in addition to the Base
Interest, shall accrue and be payable 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
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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 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.
The principal of this Security shall not accrue interest (other than
Special Interest, if any) until June 1, 2002, except in the case of a default in
payment of principal and premium, if any, upon acceleration or redemption, in
which case interest shall be payable pursuant to the preceding paragraph on such
overdue principal (and
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<PAGE> 50
premium, if any), such interest shall be payable on demand and, if not so paid
on demand, such interest shall itself bear interest at the rate of 13.30% per
annum (to the extent that the payment of such interest shall be legally
enforceable), and shall accrue from the date of such demand for payment to the
date payment of such interest has been made or duly provided for, and such
interest on unpaid interest shall also be payable on demand.
Payment of the principal of (and premium, if any) and any such
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 hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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<PAGE> 51
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
ALLIED WASTE INDUSTRIES, 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 11.30% Senior Discount Notes Due 2007 (herein called
the "Securities"), limited in aggregate principal amount to $418,000,000, issued
and to be issued under an Indenture, dated as of May 15, 1997 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), among the Company 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 Trustee and the
Holders of the Securities and of the terms upon which the Securities, 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
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<PAGE> 52
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
principal amount, (i) at the following Redemption Price (expressed as a
percentage of Accreted Value) plus any accrued but unpaid Special Interest to
but excluding the Redemption Date if redeemed during the six-month period
beginning on December 1 of the year indicated below:
Year Redemption Price
---- ----------------
2001 107.000%
and (ii) at the following Redemption Prices (expressed as percentages of
principal amount) plus any accrued but unpaid interest (including Special
Interest) to but excluding the Redemption Date if redeemed during the 12-month
period beginning on June 1 of each of the years indicated below:
Year Redemption Price
---- ----------------
2002 105.650%
2003 102.825%
2004 and thereafter 100.000%
provided that, in each case (i) and (ii), 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 June 1, 2000, in an amount up to 33 1/3% 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 the Company, at a Redemption
Price equal to 111.30% of their Accreted Value as of, together with any accrued
but unpaid 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
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<PAGE> 53
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 principal
amount. Any Special Interest due on an Interest Payment Date that 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% of the Accreted Value of the Securities, together with accrued but
unpaid Special Interest, if any, to the Redemption Date, in the event (a) the
Company has concluded, in its sole judgment, that the Repurchase will not be
consummated on or prior to June 16, 1997, as certified to the Trustee pursuant
to the requirements of the Collateral Agreement, or otherwise or (b) for any
other reason, the Repurchase is not consummated on or prior to June 16, 1997.
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.
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<PAGE> 54
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.
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 rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
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
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<PAGE> 55
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 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 principal amount 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.
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<PAGE> 56
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company 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, 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 and this Security 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
principal amount of this Security you want to elect to have so purchased by the
Company: $___________
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.
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This is one of the Securities referred to in the within-mentioned
Indenture.
_______________________________,
as Trustee
By ___________________________
Authorized Signature
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 $418,000,000,
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 $418,000,000.
The Securities shall be known and designated as the "11.30% Senior
Discount Notes due 2007" of the Company. The Securities are being issued at a
discount from their principal amount and no interest (other than Special
Interest, if any) will accrue on the Securities prior to June 1, 2002. Their
Stated Maturity shall be June 1, 2007 and they shall bear interest at the rate
of 11.30% per annum (the "Base Interest"), from June 1, 2002 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-
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annually on June 1 and December 1, commencing December 1, 2002, until the
principal thereof is paid or made available for payment; provided that any
amount of principal of (and premium, if any) and interest on the Securities
which is overdue shall bear interest (to the extent that payment thereof shall
be legally enforceable) at the rate of 13.30% 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; provided, further, 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 and be payable 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.
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.
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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.
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 principal amount and, any integral
multiple thereof.
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.
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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 to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities 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 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. 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 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 have been complied with and that
such Exchange Securities, 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, 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
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(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 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.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities, which Securities are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities, in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution thereof.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities, 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. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
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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, at its option, 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 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 or any event which after notice or lapse of time or both would be 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
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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.
(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 and the Securities, 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
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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.
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, 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 and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid
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obligations of the Company, 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
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)(iv) 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)(iv) 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
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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).
(iii) 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)).
(iv) 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)(iv)
shall not prohibit any transfer or exchange of such an interest in
accordance with Clause (b)(ii) above.
(c) Securities Act Legends. Rule 144A Securities and their 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:
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(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)(iii) 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;
(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
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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 and bearing a number
not contemporaneously outstanding.
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 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 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
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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 shall constitute an original
additional contractual obligation of the Company, 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 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.
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:
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(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 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
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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 Trustee and any agent of the Company 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 Trustee nor any agent of the Company 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 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 be promptly cancelled by the
Trustee. No 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 shall be
disposed of by the Trustee and the
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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.
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
(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
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(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
(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 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.
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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; 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 in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this
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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 or any Restricted Subsidiary, or under
any mortgage(s), indenture(s), agreement(s) or instrument(s) under which
there may be issued or existing or by which there may be secured or
evidenced, any Debt of the Company or any Restricted Subsidiary, in each
case 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 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 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 or any Restricted
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization
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or other similar law or (B) a decree or order adjudging the Company 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 or any 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 or any Restricted Subsidiary or of any substantial
part of the property of the Company or any Restricted Subsidiary, or
ordering the winding up or liquidation of the affairs of the Company 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 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 or any Restricted Subsidiary to the entry of a
decree or order for relief in respect of the Company 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 or any Restricted Subsidiary or the filing
by the Company 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 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 or any Restricted
Subsidiary or of any substantial part of the property of the Company or
any Restricted Subsidiary, or the making by the Company or any Restricted
Subsidiary of an assignment for the benefit of creditors, or the admission
by the Company
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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 or any Restricted Subsidiary in furtherance of any such action.
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 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
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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;
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
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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.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company or any
other obligor upon the Securities or the property of the Company 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.
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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 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.
SECTION 506. Application of Money Collected.
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
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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
(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,
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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, 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) any 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 other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition
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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
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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 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,
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.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, usury or
extension law wherever
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enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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.
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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 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
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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 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 of the
covenants set forth in Article Ten beyond its good faith review of any
certificates or other notices received by it from the Company.
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SECTION 604. Not Responsible for Recitals
or Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or the Securities. 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 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 and
any other obligor upon the Securities 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.
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
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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
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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 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.
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SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company 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 shall execute any and all instruments for more fully and
certainly 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
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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 or any other obligor upon the Securities, the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company 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 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 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 pub-
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lished. 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 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.
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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 May 15 and
November 15, commencing November 15, 2002, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the
Holders as of such date; and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by
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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 and the Trustee that neither the Company 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
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listed, with the Commission and with the Company. The Company will notify the
Trustee when the Securities are listed on any stock exchange.
SECTION 704. Reports by the Company.
The Company 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 (i) if
such day is prior to June 1, 2002, stating as applicable (a) that Special
Interest is accruing and payable and the rate of such Special Interest or (b)
that Special Interest is no longer accruing and payable and in either case the
date on which such Special Interest began or ceased to accrue and (ii) if such
day is on or after June 1, 2002, stating the interest rate thereupon in effect
for the Unregistered Securities (if any are Outstanding) and the date on which
such rate became effective.
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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, provided that this
Clause (a) shall not prohibit any such consolidation or merger by a Restricted
Subsidiary if (i) such Restricted Subsidiary ceases to be a Restricted
Subsidiary in such consolidation or merger or (ii) such consolidation or merger
is with or into the Company or 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, provided that this Clause (b) shall not prohibit any such
consolidation or merger with or into a Restricted Subsidiary if such Restricted
Subsidiary ceases to be a Restricted Subsidiary in such consolidation or merger;
(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 other Person
becomes a Restricted Subsidiary (excluding 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 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
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(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;
(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 and its Restricted Subsidiaries
immediately prior to such transaction (or series);
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(4) if such transaction (or series) involves Allied Waste N.A.
or any of its Restricted Subsidiaries, either (x) Allied Waste N.A.
or, in a transaction (or series) in which Allied Waste N.A. does not
survive, the Person formed by such transaction (or series) 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
1009 or (y) the Consolidated EBITDA Coverage Ratio of Allied Waste
N.A., or, if applicable, its successor entity and its Restricted
Subsidiaries 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 transaction (or series) that is subject to the provisions of this
Section and that occurred after the later of December 30, 1996 and the
date that is twelve months before the date of such transaction (or
series);
(5) if such transaction (or series) involves the Company or
any of its Restricted Subsidiaries (other than Allied Waste N.A. and
any of its Restricted Subsidiaries), either (x) the Company or, if
applicable, the Successor Company, as the case may be, 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
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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, as the case may be, and its
Restricted Subsidiaries 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 transaction (or series) that is subject to the provisions of this
Section and that occurred after the later of December 30, 1996 and the
date that is twelve months before the date of such transaction (or
series);
(6) if, as a result of any such transaction (or series),
property and assets 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
(7) unless such transaction (or series) is of the type
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
supplemental indenture is required in connection with such transaction
(or series), such supplemental indenture complies 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
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referred to in Clauses (3) and (4) or (5), as applicable, 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, 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 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 (6) 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, 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,
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(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the place of payment where, or the coin
or currency in which, the principal of (or premium, if any) or interest
on any Security 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 1022 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 Sections 1014 and 1015 of this Indenture in a
manner adverse to the Holders thereof in any material respect, or
(5) 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.
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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 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.
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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.
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 in
respect of the Securities 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 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.
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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, 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
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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 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.
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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 discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
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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 Debt of the Company and
Certain of its Restricted Subsidiaries
The Company shall not Incur any Debt and shall not permit any
of its Restricted Subsidiaries (other than Allied Waste N.A. and its 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 and its Restricted Subsidiaries 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.
Without regard to the foregoing limitations, the Company and
its Restricted Subsidiaries (other than Allied Waste N.A. and its Restricted
Subsidiaries) 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 owed by the Company to any Restricted Subsidiary or
Debt owed by a Restricted Subsidiary to the Company or to a Restricted
Subsidiary; provided,
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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 (ii) 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;
(iii) Debt evidenced by the Securities and other Debt
outstanding on the date of the Indenture;
(iv) Debt consisting of Permitted Interest Rate or Currency
Protection Agreements;
(v) Debt Incurred to renew, extend, refund otherwise refinance
any outstanding Debt permitted in Clauses (i) through (iii) above;
provided, however, that such Debt does not exceed the principal amount
(or accreted value in the case of original issue discount Debt) of Debt
so renewed, extended, refunded or otherwise refinanced; and provided
further, that Debt the proceeds of which are used to refinance or
refund Debt which expressly states that it is subordinate in right of
payment to the Securities shall only be permitted if (a) the
refinancing or refunding Debt is made subordinate to the Securities to
substantially the same extent as, or a greater extent than, the Debt
being refinanced or refunded is subordinated to the Securities 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
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refinanced or refunded 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 or refunded; and
(vi) Debt not otherwise permitted to be Incurred pursuant to
Clauses (i) through (v) above, which, in aggregate amount, together
with the aggregate amount of all other Debt previously Incurred
pursuant to this Clause (vi) and then outstanding, does not exceed $75
million.
SECTION 1009. Limitation on Debt of Allied Waste
N.A. and its Restricted Subsidiaries
The Company shall not permit Allied Waste N.A. or any
Restricted Subsidiary of Allied Waste N.A. 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 Allied Waste N.A. and its
Restricted Subsidiaries 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 or issuance is on or prior to December 31, 1999 and 2.25 to 1.0
if thereafter.
Without regard to the foregoing limitations, Allied Waste N.A.
and its Restricted Subsidiaries 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 owed by Allied Waste N.A. to the Company or to any
Restricted Subsidiary or Debt owed by a Restricted Subsidiary of Allied
Waste N.A. to the Company or to a Restricted Subsidiary; provided,
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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 (ii) 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;
(iii) Debt outstanding on the date of the Indenture;
(iv) Debt Incurred in connection with an acquisition, merger
or consolidation transaction permitted under Section 801, which Debt
(a) was issued by a Person prior to the time such Person becomes a
Restricted Subsidiary of Allied Waste N.A. in such transaction
(including by way of merger or consolidation with Allied Waste N.A. or
another Restricted Subsidiary of Allied Waste N.A.) and was not issued
in contemplation of such transaction or (b) is issued by Allied Waste
N.A. or a Restricted Subsidiary of Allied Waste N.A. to a seller in
connection with such transaction, in an aggregate amount for all such
Debt issued pursuant to this Clause (iv) not to exceed $50 million at
any one time outstanding;
(v) Debt consisting of Permitted Interest Rate or Currency
Protection Agreements;
(vi) Debt Incurred to renew, extend, refund or otherwise
refinance any outstanding Debt permitted in Clauses (i) through (iv)
above; provided, however, that such Debt does not exceed the principal
amount (or accreted value in the case of original issue discount Debt)
of Debt so renewed, extended, refunded or otherwise refinanced; and
provided further, that Debt the proceeds of which are used to refinance
or refund Debt which expressly states that it is subordinate in right
of payment to the Securities shall only be
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permitted if (a) the refinancing or refunding Debt is made subordinate
to the Securities to substantially the same extent as, or a greater
extent than, the Debt being refinanced or refunded is subordinated to
the Securities 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 or refunded 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 or
refunded; and
(vii) Debt not otherwise permitted to be Incurred pursuant to
Clauses (i) through (vi) above, which, in aggregate amount, together
with the aggregate amount of all other Debt previously Incurred
pursuant to this Clause (vii) and then outstanding, does not exceed 5%
of the Consolidated Total Assets of Allied Waste N.A. and its
Restricted Subsidiaries 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 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 the Capital Stock of the Company
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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 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 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 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
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thereto as if such Restricted Payment had been made at 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 (i), (iii) and (iv) 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 January 1, 1997 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 and sale (other than to a Restricted Subsidiary) 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 January 1, 1997;
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
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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 January 1, 1997 from
an Unrestricted Subsidiary of the Company; and
(d) $10 million, less any amounts paid pursuant to
Clause (ii) of the next sentence.
The foregoing provisions of this Section 1010 shall not be violated by reason
of:
(i) the Repurchase;
(ii) payments (x) of cash dividends on any shares of Preferred
Stock of the Company outstanding on the date of this Indenture in an
amount not to exceed the stated dividend rate on the date of this
Indenture on such Preferred Stock (which payments in the aggregate
shall not exceed $700,000 for each fiscal year) and (y) to redeem any
convertible Preferred Stock of the Company outstanding on the date of
this Indenture if the conversion price for such Preferred Stock is no
greater than 80% of the then market price of the stock into which such
Preferred Stock is redeemable; provided that the aggregate of all
amounts paid pursuant to this Clause (ii), together with all amounts
paid pursuant to Clause (3)(d) of the foregoing sentence, shall not
exceed $10 million;
(iii) 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;
(iv) any refinancing or refunding of Debt permitted pursuant
to Clause (vi) of the second paragraph of Section 1009 or pursuant to
Clause (v) of the second paragraph of Section 1008; and
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(v) 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 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:
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(a) pursuant to the Securities, this Indenture or any other
agreement in effect on the date of this Indenture,
(b) pursuant to the Allied Waste N.A. Notes, including any
Guarantees thereof or any Liens securing any of such debt,
(c) pursuant to the Bank Agreement, including any Guarantees
of or Liens securing the Debt Incurred thereunder,
(d) 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,
(e) 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,
(f) pursuant to customary non-assignment provisions in leases
or purchase agreements entered into in the ordinary course of business,
(g) 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,
(h) pursuant to Debt permitted to be Incurred by Allied Waste
N.A. and its Restricted Subsidiaries pursuant to Section 1009;
provided, however, that the provisions relating to such encumbrance or
restriction
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contained in such Debt are no more restrictive in any material respect
than the restrictions contained in the indenture pursuant to which the
Allied Waste N.A. Notes were issued or
(i) pursuant to an agreement effecting a renewal, extension,
refinancing or refunding of Debt Incurred pursuant to an agreement
referred to in Clause (a), (b), (c) or (h) 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.
The Company shall not Incur any Lien on property or assets of
the Company now owned or hereafter acquired without making effective provision
for securing the Securities, provided that in the event such Lien secures Debt
which is subordinate in right of payment to the Securities, the Securities are
secured on a basis prior to such Debt as to such property or assets for so long
as such Debt will be so secured.
The foregoing restrictions will not apply to (a) Liens
existing at the date of this Indenture in respect of Debt existing at the date
of this Indenture or (b) to:
(i) Liens on property of the Company in favor of the United
States of America or any state thereof, or any instrumentality of
either, to secure certain payments pursuant to any contract or statute;
(ii) Liens for taxes or assessments or other governmental
charges or levies which are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted
and for which a
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reserve or other appropriate provision, if any, as shall be required in
accordance with generally accepted accounting principles shall have
been made; and
(iii) Liens to secure (x) Debt Incurred pursuant to Clause (i)
of the second paragraph of Section 1008, (y) Debt Incurred pursuant to
Clause (v) of the second paragraph of Section 1008 to extend, renew,
refinance or refund (or successive extensions, renewals, refinancings
or refundings), in whole or in part, the Debt under the Bank Agreement
and (z) Debt consisting of Permitted Interest Rate or Currency
Protection Agreements with respect to the Debt referred to in Clauses
(x) and (y) above.
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) the Company or a Restricted Subsidiary or (b)
another Restricted Subsidiary, 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
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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 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),
delivers a written opinion 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
Repurchase or 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
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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 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), less any Reinvested Amounts, are applied by the
Company (or a Restricted Subsidiary) within one year from the later of
the date of such Asset Disposition or the receipt of such Net Available
Proceeds, (A) first, to repayment (in whole or in part) of 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
Debt as specified in Clause (A), to purchases of
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Outstanding Securities pursuant to an Offer to Purchase (to the extent
such an offer is not prohibited by the terms of any Debt then
outstanding) at a purchase price equal to 100% of their Accreted Value
as of the purchase date plus any 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, to the extent required by the terms
thereof, any other Debt of the Company that is pari passu with the
Securities at a price no greater than 100% of the principal amount
thereof plus accrued interest to the date of purchase (or 100% of the
accreted value in the case of original issue discount Debt); 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 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. 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
second preceding paragraph if the Asset Disposition is an Excepted Disposition.
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(b) The Company shall mail by first class 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
Accreted Value 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 Accreted Value 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).
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
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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 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 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 Accreted Value as of the
purchase date plus any 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 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
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with any Affiliates or Related Persons thereof (other than any employee stock
option plan), 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 the Company; (ii) any Person or Group,
together with any Affiliates or Related Persons thereof, shall succeed in having
sufficient of its nominees elected to the Board of Directors of the Company such
that such nominees, when added to any existing director remaining on the Board
of Directors of the Company 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 the Company; (iii) there occurs any transaction or series of
related transactions, and the beneficial owners of the Voting Stock of the
Company 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 the
Company (or in the case of a transaction (or series) in which another entity
becomes a successor to the Company, of the successor entity); or (iv) Allied
Waste N.A. ceases to be a Subsidiary of the Company.
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 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
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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 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
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.
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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.
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) (i) in the event such Subsidiary is Allied Waste N.A. or another
Subsidiary that is not a Subsidiary of Allied Waste N.A., the Consolidated
EBITDA Coverage Ratio of the Company and its Restricted Subsidiaries 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 and (ii) in the event such
Subsidiary is a Subsidiary of Allied Waste N.A., the Consolidated EBITDA
Coverage Ratio of Allied Waste N.A. and its Restricted Subsidiaries for
the four full fiscal
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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 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 or other assets of, the Company or
any of its Restricted Subsidiaries; or
(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.
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
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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 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 other assets 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
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other ownership interests in such Restricted Subsidiary owned by the Company and
any Subsidiary of the Company, and 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.
The Company 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) holding the Allied Canada Debentures and 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 or (ii) consolidating with or merging into the Company
or another Restricted Subsidiary of the Company.
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 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 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.
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SECTION 1022. Waiver of Certain Covenants.
The Company 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 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 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
obligations with respect to the repayment of the principal of (and premium, if
any) and any
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interest accrued on such Securities, both before and 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
condition 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 Repurchase will not be consummated on or prior to June 16, 1997, as
certified to the Trustee pursuant to the requirements of the Collateral
Agreement, or otherwise or (b) for any other reason, the Repurchase is not
consummated on or prior to June 16, 1997, the Company shall redeem all
Outstanding Securities at a Redemption Price of 100% of the Accreted Value of
the Securities plus accrued and unpaid Special Interest, if any, to the
Redemption Date (the "Special Mandatory Redemption").
SECTION 1102. Redemption at the Election of the Company.
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.
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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).
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 such Securities which has been or is to be redeemed.
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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 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, and
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(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) any 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
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
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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 any 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.
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
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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, 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 amount 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, on and after
the date the conditions set forth below are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that 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), except for the following
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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, and (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 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.
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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:
(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 certified 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, if any, on the outstanding 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
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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.
(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) 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).
(6) 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).
(7) 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.
-143-
<PAGE> 146
(8) 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 Section
1202 or the covenant defeasance under Section 1203 (as the case may be)
have been complied with.
(9) 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.
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
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<PAGE> 147
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.
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
Jurisdiction and Consent to Service of Process
SECTION 1301. Jurisdiction and Consent to Service of
Process.
(a) The Company 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, this Indenture or the Collateral
Agreement, or
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<PAGE> 148
for recognition or enforcement of any judgment, and the Company 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. The Company 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 Thirteen shall affect any right that
any Holder or the Trustee may otherwise have to bring any action or proceeding
relating to the Securities, this Indenture or the Collateral Agreement against
the Company or its properties in the courts of any jurisdiction.
(b) The Company 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, this Indenture or the
Collateral Agreement in any New York State or Federal court. The Company 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) The Company 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.
--------------------
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> 149
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 INDUSTRIES, 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
FIRST BANK NATIONAL ASSOCIATION,
As Trustee
By: /s/ Richard H. Prokosch
---------------------------
Name: Richard H. Prokosch
Title: Trust Officer
Attest:
/s/ Kathe M. Barrett
- ---------------------
Kathe M. Barrett
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<PAGE> 150
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK)
On the 15th day of May, 1997, 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 Industries, Inc., the corporation
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.
------------------------------
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<PAGE> 151
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK)
On the 15th day of May, 1997, 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 Industries, Inc., the corporation
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.
------------------------------
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<PAGE> 152
ANNEX A -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to Section 306(b)(i) of the Indenture)
First Bank National Association
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
Re: 11.30% Senior Discount Notes due 2007
of Allied Waste Industries, Inc.
(the "Securities")
Reference is made to the Indenture, dated as of May 15, 1997 (the
"Indenture"), from Allied Waste Industries, Inc. (the "Company") 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".
The Specified Securities are represented by a Global Security and are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner.
A-1
<PAGE> 153
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 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;
A-2
<PAGE> 154
(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 remuneration 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.
(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 one year (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 two 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 and the Initial Purchasers.
Dated:
------------------------------
A-3
<PAGE> 155
(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-4
<PAGE> 156
ANNEX B -- Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 306(b)(ii) of the Indenture)
First Bank National Association
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
Re: 11.30% Senior Discount Notes due 2007
of Allied Waste Industries, Inc.
(the "Securities")
Reference is made to the Indenture, dated as of May 15, 1997 (the
"Indenture"), from Allied Waste Industries, Inc. (the "Company") 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".
The Specified Securities are represented by a Global Security and are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner.
B-1
<PAGE> 157
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 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 follows:
(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 one year (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 two years has elapsed
B-2
<PAGE> 158
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 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> 159
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: 11.30% Senior Discount Notes due 2007
of Allied Waste Industries, Inc.
(the "Securities")
Reference is made to the Indenture, dated as of May 15, 1997 (the
"Indenture"), from Allied Waste Industries, Inc. (the "Company") 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
C-1
<PAGE> 160
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 that
the exchange 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 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 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> 161
TABLE OF CONTENTS
Page
RECITALS OF THE COMPANY................................................1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions..........................................2
Accreted Value.......................................3
Acquisition..........................................3
Act ...............................................4
Affiliate............................................4
Agent Member.........................................4
Allied Canada........................................4
Allied Canada Debentures.............................4
Allied Finance.......................................4
Allied Finance Debentures............................4
Allied Insurance.....................................4
Allied Waste N.A.....................................4
Allied Waste N.A. Notes..............................5
Applicable Procedures................................5
Asset Disposition....................................5
Authenticating Agent.................................5
Bank Agreement.......................................5
Bank Facility Capacity Increase......................5
Bank Facility Limit..................................6
Base Interest........................................6
Board of Directors...................................6
Board Resolution.....................................6
Business Day.........................................6
Capital Lease Obligation.............................6
Capital Stock........................................7
Cedel................................................7
Change of Control....................................7
Collateral...........................................7
- -----------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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<PAGE> 162
Page
Collateral Account...................................7
Collateral Agreement.................................7
Commission...........................................7
Common Stock.........................................7
Company..............................................7
Company Order........................................7
Consolidated EBITDA..................................8
Consolidated EBITDA Coverage Ratio...................8
Consolidated Income Tax Expense......................9
Consolidated Interest Expense........................9
Consolidated Net Income..............................9
Consolidated Net Worth..............................10
Consolidated Subsidiaries...........................10
Consolidated Total Assets...........................10
Corporate Trust Office..............................11
corporation.........................................11
Credit Suisse.......................................11
Credit Suisse Letter of Credit......................11
Debt ..............................................11
Defaulted Interest..................................11
defeasance..........................................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
Guaranty............................................13
Holder..............................................13
Increased Bank Facility Limit.......................13
Incur...............................................14
- -----------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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<PAGE> 163
Page
Indenture...........................................14
Initial Purchasers..................................14
Intercompany Agreements.............................14
Interest Payment Date...............................14
Interest Rate or Currency Protection
Agreement.....................................14
Investment..........................................15
Laidlaw.............................................15
Laidlaw Securities Purchase Agreement...............15
Lien ..............................................15
Maturity............................................15
Net Available Proceeds..............................16
Net Offering Proceeds...............................16
Note Purchase Agreement.............................16
Notice of Default...................................16
Offer Document......................................16
Offer Expiration Date...............................16
Offer to Purchase...................................17
Officers' Certificate...............................19
Opinion of Counsel..................................20
Original Securities.................................20
Outstanding.........................................20
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
Public Offering.....................................23
Purchase Amount.....................................23
Purchase Date.......................................23
Purchase Price......................................23
Redeemable Interest.................................23
Redemption Date.....................................24
Redemption Price....................................24
- -----------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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<PAGE> 164
Page
Registered Securities...............................24
Registration Default................................24
Registration Default Period.........................24
Regular Record Date.................................24
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......................................25
Repurchase..........................................25
Required Filing Dates...............................25
Restricted Global Security..........................25
Restricted Payment..................................25
Restricted Period...................................26
Restricted Securities...............................26
Restricted Securities Certificate...................26
Restricted Securities Legend........................26
Restricted Subsidiary...............................26
Rule 144A...........................................26
Rule 144A Securities................................26
Secured Obligations.................................26
Securities..........................................26
Securities Act......................................26
Securities Act Legend...............................26
Security Register...................................27
Shelf Registration Statement........................27
Special Interest....................................27
Special Mandatory Redemption........................27
Special Record Date.................................27
Specialized Waste...................................27
Stated Maturity.....................................27
Subsidiary..........................................27
Successor Company...................................27
Successor Security..................................28
Trust Indenture Act.................................28
- -----------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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<PAGE> 165
Page
Trustee.............................................28
U.S. Government Obligations.........................28
Unpermitted Debt....................................28
Unrestricted Securities Certificate.................29
Unrestricted Subsidiary.............................29
Vice President......................................29
Voting Stock........................................29
Weighted Average Life...............................29
Wholly Owned Restricted Subsidiary..................29
SECTION 102. Compliance Certificates and Opinions................29
SECTION 103. Form of Documents Delivered to Trustee..............30
SECTION 104. Acts of Holders; Record Dates.......................31
SECTION 105. Notices, Etc., to Trustee and the Company...........34
SECTION 106. Notice to Holders; Waiver...........................34
SECTION 107. Conflict with Trust Indenture Act...................35
SECTION 108. Effect of Headings and Table of Contents............35
SECTION 109. Successors and Assigns..............................35
SECTION 110. Separability Clause.................................35
SECTION 111. Benefits of Indenture...............................36
SECTION 112. Governing Law.......................................36
SECTION 113. Legal Holidays......................................36
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally; Initial Forms of Rule 144A
and Regulation S Securities...................36
SECTION 202. Form of Face of Security............................37
SECTION 203. Form of Reverse of Security.........................41
SECTION 204. Form of Trustee's Certificate of
Authentication................................46
ARTICLE THREE
The Securities
- -----------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-v-
<PAGE> 166
Page
SECTION 301. Title and Terms.....................................47
SECTION 302. Denominations.......................................48
SECTION 303. Execution, Authentication, Delivery
and Dating....................................49
SECTION 304. Temporary Securities................................50
SECTION 305. Global Securities...................................51
SECTION 306. Registration, Registration of Transfer and
Exchange Generally; Restrictions on
Transfer and Exchange; Securities Act
Legends.......................................52
(a) Registration, Registration of
Transfer and Exchange Generally.......52
(b) Certain Transfers and Exchanges.......54
(i) Restricted Global Security to
Regulation S Global Security.....54
(ii) Regulation S Global Security to
Restricted Global Security.......54
(iii) Exchanges between Global
Security and Non-Global Security.55
(iv) Regulation S Global Security to
be Held Through Euroclear or
Cedel during Restricted Period...55
(c) Securities Act Legends................55
SECTION 307. Mutilated, Destroyed, Lost and
Stolen Securities.............................57
SECTION 308. Payment of Interest; Interest
Rights Preserved..............................58
SECTION 309. Persons Deemed Owners...............................59
SECTION 310. Cancellation........................................60
SECTION 311. Computation of Interest.............................60
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.............60
- -----------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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<PAGE> 167
Page
SECTION 402. Application of Trust Money..........................62
ARTICLE FIVE
Remedies
SECTION 501. Events of Default...................................62
SECTION 502. Acceleration of Maturity; Rescission
and Annulment.................................64
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee....................66
SECTION 504. Trustee May File Proofs of Claim....................66
SECTION 505. Trustee May Enforce Claims
Without Possession of Securities..............67
SECTION 506. Application of Money Collected......................67
SECTION 507. Limitation on Suits.................................68
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest...............69
SECTION 509. Restoration of Rights and Remedies..................69
SECTION 510. Rights and Remedies Cumulative......................69
SECTION 511. Delay or Omission Not Waiver........................69
SECTION 512. Control by Holders..................................70
SECTION 513. Waiver of Past Defaults.............................70
SECTION 514. Undertaking for Costs...............................70
SECTION 515. Waiver of Stay, Usury or Extension Laws.............71
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.................71
SECTION 602. Notice of Defaults..................................72
SECTION 603. Certain Rights of Trustee...........................72
SECTION 604. Not Responsible for Recitals or
Issuance of Securities........................73
SECTION 605. May Hold Securities.................................74
SECTION 606. Money Held in Trust.................................74
- -----------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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<PAGE> 168
Page
SECTION 607. Compensation and Reimbursement......................74
SECTION 608. Disqualification; Conflicting Interests.............75
SECTION 609. Corporate Trustee Required; Eligibility.............75
SECTION 610. Resignation and Removal;
Appointment of Successor......................75
SECTION 611. Acceptance of Appointment by Successor..............77
SECTION 612. Merger, Conversion, Consolidation
or Succession to Business.....................77
SECTION 613. Preferential Collection
of Claims Against Company.....................78
SECTION 614. Appointment of Authenticating Agent.................78
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee
Names and Addresses of Holders................80
SECTION 702. Preservation of Information;
Communications to Holders.....................80
SECTION 703. Reports by Trustee..................................81
SECTION 704. Reports by the Company..............................81
SECTION 705. Officers' Certificate with Respect to Change
in Interest Rates.............................82
ARTICLE EIGHT
Merger, Consolidation, Etc.
SECTION 801. Mergers, Consolidations and Certain
Transfers, Leases and Acquisitions
of Assets.....................................82
SECTION 802. Successor Substituted...............................85
ARTICLE NINE
Supplemental Indentures
- -----------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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<PAGE> 169
Page
SECTION 901. Supplemental Indentures
Without Consent of Holders....................86
SECTION 902. Supplemental Indentures
with Consent of Holders.......................87
SECTION 903. Execution of Supplemental Indentures................88
SECTION 904. Effect of Supplemental Indentures...................88
SECTION 905. Conformity with Trust Indenture Act.................88
SECTION 906. Reference in Securities
to Supplemental Indentures....................88
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest..........89
SECTION 1002. Maintenance of Office or Agency.....................89
SECTION 1003. Money for Security Payments
to Be Held in Trust...........................90
SECTION 1004. Existence...........................................91
SECTION 1005. Maintenance of Properties...........................91
SECTION 1006. Payment of Taxes and Other Claims...................92
SECTION 1007. Maintenance of Insurance............................92
SECTION 1008. Limitation on Debt of the Company and
Certain of its Restricted Subsidiaries........92
SECTION 1009. Limitation on Debt of Allied Waste
N.A. and its Restricted Subsidiaries..........94
SECTION 1010. Limitation on Restricted Payments...................96
SECTION 1011. Limitations Concerning Distributions by
Subsidiaries, Etc.............................99
SECTION 1012. Limitation on Liens................................101
SECTION 1013. Limitation on Transactions with
Affiliates and Related Persons...............102
SECTION 1014. Limitation on Certain Asset Dispositions...........103
SECTION 1015. Change of Control..................................106
SECTION 1016. Provision of Financial Information.................108
SECTION 1017. Resale of Acquired Securities......................109
- -----------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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<PAGE> 170
Page
SECTION 1018. Unrestricted Subsidiaries..........................109
SECTION 1019. Limitation on Sale of
Capital Stock of Subsidiaries................111
SECTION 1020. Restriction on Business and Incurrence of
Debt by Allied Finance.......................112
SECTION 1021. Statement by Officers as to
Default; Compliance Certificates.............112
SECTION 1022. Waiver of Certain Covenants........................112
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Collateral Agreement; Special
Mandatory Redemption.........................113
SECTION 1102. Redemption at the Election of the Company..........114
SECTION 1103. Applicability of Article...........................114
SECTION 1104. Election to Redeem; Notice to Trustee..............114
SECTION 1105. Selection by Trustee of Securities
to Be Redeemed...............................114
SECTION 1106. Notice of Redemption...............................115
SECTION 1107. Deposit of Redemption Price;
Liquidation of Collateral Account
and Draw on Credit Suisse
Letter of Credit.............................116
SECTION 1108. Securities Payable on Redemption Date..............117
SECTION 1109. Securities Redeemed in Part........................117
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance
or Covenant Defeasance.......................118
SECTION 1202. Defeasance and Discharge...........................118
SECTION 1203. Covenant Defeasance................................118
- -----------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-x-
<PAGE> 171
Page
SECTION 1204. Conditions to Defeasance or
Covenant Defeasance..........................119
SECTION 1205. Deposited Money and U.S. Government
Obligations to be Held in Trust;
Other Miscellaneous Provisions...............121
SECTION 1206. Reinstatement......................................122
ARTICLE THIRTEEN
Jurisdiction and Consent to Service of Process
SECTION 1301. Jurisdiction and Consent to Service of
Process......................................122
ANNEX A -- Form of Regulation S Certificate
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.
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<PAGE> 1
Exhibit 5.1
PORTER & HEDGES, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002-2764
Telecopier (713) 228-1331
Telephone (713) 226-0600
November 7, 1997
First Bank National Association, Trustee
180 East Fifth Street
St. Paul, Minnesota 55101
Ladies and Gentlemen:
We have acted as counsel to Allied Waste Industries, Inc., a Delaware
corporation ("Allied"), in connection with the registration under the Securities
Act of 1933, as amended, of the issuance by Allied of $418 million aggregate
principal amount of 11.30% Senior Discount Notes due 2007 (the "Notes") pursuant
to the Indenture dated May 15, 1997 (the "Indenture") between Allied and you, in
your capacity as trustee under the Indenture (the "Trustee").
In connection with the opinions expressed below, we have examined (i) the
certificates of incorporation, bylaws and corporate proceedings of Allied and
(ii) the Indenture.
Based upon such examinations, we are of the opinion that the Notes, when
issued, will be: (i) legally issued, fully paid and nonassessable; and (ii)
binding obligations of Allied, except as may be limited by bankruptcy,
insolvency and other law relating to the rights of creditors and law relating to
specific performance and other forms of equitable relief that are subject to
equitable defenses and judicial authority.
We consent to the use of this opinion as an exhibit to the Registration
Statement on Form S-4, No. 333-31231, and to the reference to our firm under the
captioned "Legal Matters" in the prospectus included therein.
Very truly yours,
/s/ PORTER & HEDGES, L.L.P.
PORTER & HEDGES, L.L.P.
<PAGE> 1
Exhibit 10.1
Conformed Copy
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, dated as of May 15, 1997, among
Allied Waste Industries, Inc., a Delaware corporation (the "Company"), Goldman,
Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Credit
Suisse First Boston Corporation, as representatives of the purchasers (the
"Purchasers"), identified on Schedule I to the Note Purchase Agreement (as
defined herein), of the 11.30% Senior Discount Notes due June 1, 2007, of the
Company.
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:
"Base Interest" shall mean the interest, if any, 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.
"Closing" shall mean the date of the closing of the issuance and sale
of the Securities pursuant to the Note Purchase Agreement.
"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.
"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.
<PAGE> 2
"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.
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 May 15, 1997, between
the Company 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 May 1, 1997, between the Purchasers and the Company 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 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.
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<PAGE> 3
"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 11.30% Senior Discount Notes
due June 1, 2007 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.
"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.
"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 Closing, a registration statement
-3-
<PAGE> 4
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 at maturity of debt
securities issued by the Company, which debt securities are substantially
identical to the Securities, 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
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 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 any broker-dealer 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 (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 received by
holders other than Restricted Holders in the Exchange Offer for Registrable
Securities are not or would not be, upon receipt, transferable by
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<PAGE> 5
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 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 second anniversary of the Closing 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 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
-5-
<PAGE> 6
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 cash interest ("Special Interest"), in addition to Base
Interest, shall accrue and be payable 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) The Company shall take all reasonable actions necessary or advisable to
be taken by it to ensure that the transactions contemplated herein are effected
as so contemplated.
(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.
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 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 Closing;
-6-
<PAGE> 7
(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 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(c)(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;
-7-
<PAGE> 8
(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), if such registration or
qualification is required by such laws, 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 the Company shall not 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;
(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
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<PAGE> 9
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;
(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
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<PAGE> 10
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), (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 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
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<PAGE> 11
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 at
maturity 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 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
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<PAGE> 12
underwriter, if any, to consummate the disposition in such jurisdictions of
such Registrable Securities; provided, however, that the Company shall not
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;
(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 at maturity 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 at maturity 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
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<PAGE> 13
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, if any, 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 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 at maturity 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; and (E) undertake such
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<PAGE> 14
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
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
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<PAGE> 15
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.
(g) Until the expiration of two years after the 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
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<PAGE> 16
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 at maturity 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 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
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<PAGE> 17
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 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
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 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, if any, 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.
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<PAGE> 18
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 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
-18-
<PAGE> 19
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.
(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
-19-
<PAGE> 20
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 at maturity 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.
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 at maturity 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 arrange-
ments and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, under writing agreements and other documents reasonably required
under the terms of such underwriting arrangements.
-20-
<PAGE> 21
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 fails to perform any of its
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 obligations of the Company under this
Exchange and Registration Rights Agreement in accordance with the 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 15880 North Greenway-Hayden Loop, Suite 100, Scottsdale, AZ 85260, Attention:
Vice President-Chief Financial Officer, with a copy to Fried, Frank, Harris,
Shriver & Jacobson, One New York Plaza, New York, NY 10004, Attention: David
Golay, 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
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<PAGE> 22
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.
(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 at maturity 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
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<PAGE> 23
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 INDUSTRIES, 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
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
CREDIT SUISSE FIRST BOSTON
CORPORATION
As Representatives of the several Purchasers
By: /s/ Goldman, Sachs & Co.
--------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Purchasers
-23-
<PAGE> 24
Exhibit A
ALLIED WASTE INDUSTRIES, 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 Industries,
Inc. (the "Company") 11.30% Senior Discount Notes due 2007 (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
Industries, Inc., 15880 North Greenway-Hayden Loop, Suite 100, Scottsdale, AZ
85260, Attention: Vice-President-Chief Financial Officer, (602) 423-2946.
- ----------------
*/ Not less than 28 calendar days from date of mailing.
<PAGE> 25
Allied Waste Industries, 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
Industries, 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 11.30% Senior Discount Notes
due 2007 (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> 26
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 Exchange and
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> 27
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 at maturity of Registrable Securities beneficially
owned:
----------------
CUSIP No(s). of such Registrable Securities:
----------------
(b) Principal amount at maturity of Securities other than Registrable
Securities beneficially owned:
----------------
CUSIP No(s). of such other Securities:
----------------
A-4
<PAGE> 28
(c) Principal amount at maturity 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> 29
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 Regulation M (which governs manipulation, stabilization and trading
activity during a distribution of securities).
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, and any underwriters in an underwritten
offering of such Selling Securityholder's Registrable Securities listed in
Item(3) above, 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
A-6
<PAGE> 30
pursuant to the Exchange and 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 Industries, Inc.
15880 North Greenway-Hayden Loop, Suite 100
Scottsdale, AZ 85260
Attention: Vice-President-Chief Financial Officer
(602) 423-2946
(ii) With a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, NY 10004
Attention: David Golay
(212) 859-8000
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> 31
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:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, NY 10004
Attention: David Golay
(212) 859-8000
A-8
<PAGE> 32
Exhibit B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
First Bank National Association
Allied Waste Industries, Inc.
c/o First Bank National Association
First Trust Center
180 East Fifth Street
St. Paul, MN 55101
Attention: Trust Officer
Re: Allied Waste Industries, Inc. (the "Company")
11.30% Senior Discount Notes due 2007
Dear Sirs:
Please be advised that _____________________ has transferred $___________
aggregate principal amount at maturity 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 at maturity 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
<PAGE> 1
Exhibit 23.2
[ARTHUR ANDERSEN LLP LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 26, 1997,
included in Allied Waste Industries, Inc.'s Form 10-K for the year ended
December 31, 1996, and to all references to our firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Phoenix, Arizona
November 5, 1997
<PAGE> 1
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
Laidlaw Solid Waste Management Group
We consent to the incorporation by reference in the registration statement of
Allied Waste Industries, Inc. on Amendment No. 1 to Form S-4 Registration No.
333-31231 dated November 7, 1997, of our report dated September 30, 1996, to the
Directors of Laidlaw Inc. on the balance sheets of the Laidlaw Solid Waste
Management Group as at August 31, 1995 and 1996 and the statements of operations
and cash flows for years ended August 31, 1994, 1995 and 1996, which report is
incorporated in the Form 8K/A-4 dated of February 19, 1997.
This letter is provided to securities regulatory authorities pursuant to the
requirements of their securities legislation and is not for any other purpose.
/s/ COOPERS & LYBRAND
November 7, 1997 Coopers & Lybrand
Hamilton, Canada Chartered Accountants
<PAGE> 1
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM T-1
Statement of Eligibility and Qualification Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
U.S. BANK NATIONAL ASSOCIATION
F.K.A. FIRST BANK NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0417860
(State of Incorporation) (I.R.S. Employer
Identification No.)
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
ALLIED WASTE INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 88-0228636
(State of Incorporation) (I.R.S. Employer
Identification No.)
15880 North Greenway-Hayden Loop
Suite 100
Scottsdale, Arizona 85260
(Address of Principal Executive Offices) (Zip Code)
11.30% SENIOR DISCOUNT NOTES DUE 2007
(Title of the Indenture Securities)
<PAGE> 2
GENERAL
1. General Information Furnish the following information as to the
Trustee.
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe
each such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which
the Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this
statement of eligibility and qualification.
1. Copy of Articles of Association.*
2. Copy of Certificate of Authority to Commence Business.*
3. Authorization of the Trustee to exercise corporate trust
powers (included in Exhibits 1 and 2; no separate
instrument).*
4. Copy of existing By-Laws.*
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321(b) of the
act.
7. Copy of the latest report of condition of the Trustee
published pursuant to law or the requirements of its
supervising or examining authority incorporated by reference
to File Number 333-26679.
* Incorporated by reference to File Number 333-30939.
<PAGE> 3
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, U.S. Bank National Association, an Association organized and existing
under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of Saint Paul and State of Minnesota on the 5th day of November,
1997.
U.S. BANK NATIONAL ASSOCIATION
/s/Richard H. Prokosch
----------------------
Richard H. Prokosch
Assistant Vice President
/s/Kathe M. Barrett
- ------------------------
Kathe M. Barrett
Assistant Secretary
<PAGE> 4
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Dated: November 5, 1997
U.S. BANK NATIONAL ASSOCIATION
/s/ Richard H. Prokosch
-----------------------
Richard H. Prokosch
Assistant Vice President
<PAGE> 1
LETTER OF TRANSMITTAL
ALLIED WASTE INDUSTRIES, INC.
OFFER TO EXCHANGE 11.30% SENIOR DISCOUNT NOTES DUE 2007 WHICH HAVE BEEN
REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, FOR ANY AND ALL OF THE OUTSTANDING
11.30% SENIOR DISCOUNT NOTES DUE 2007
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON DECEMBER 16, 1997, UNLESS EXTENDED
Exchange Agent:
FIRST BANK NATIONAL ASSOCIATION
<TABLE>
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By Mail or Delivery Service By Facsimile By Hand Delivery
First Bank National Association (Eligible Institutions Only) First Bank National Association
First Trust Center (612) 224-1537 First Trust Center
180 Fifth Street For Telephone Inquires Fourth Floor - Bond Drop Window
St. Paul, Minnesota 55101 (612) 244-1572 180 Fifth Street
Attn: Bernice Chapman St. Paul, Minnesota 55101
Attn: Bernice Chapman
</TABLE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
AND
PRINT OR TYPE ALL RESPONSES
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONES LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL
IS COMPLETED.
The undersigned hereby acknowledges receipt of the Prospectus dated July
10, 1997 (the "Prospectus") of Allied Waste Industries, Inc. (the "Company") and
this Letter of Transmittal, which together constitute the Company's offer (the
"Exchange Offer") to exchange $1,000 principal amount of its 11.30% Senior
Discount Notes due 2007 (the "Exchange Notes"), which have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement of which the Prospectus is a part, for each $1,000
principal amount of its outstanding 11.30% Senior Discount Notes due 2007 (the
"Notes"). The term "Expiration Date" shall mean 5:00 p.m., New York City time,
on December 16, 1997, unless the Company extends the Exchange Offer, in which
case the term shall mean the latest date and time to which the Exchange Offer is
extended. Capitalized terms used but not defined herein have the meaning given
to them in the Prospectus.
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE
INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
List below the Notes to which this Letter of Transmittal relates. If the
space indicated below is inadequate, the Certificate or Registration Numbers and
Principal Amounts should be listed on a separately signed schedule affixed
hereto.
- --------------------------------------------------------------------------------
DESCRIPTION OF NOTES TENDERED HEREBY
<TABLE>
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- ------------------------------------------------------------------------------------------------------------------------------
AGGREGATE PRINCIPAL
CERTIFICATE OR AMOUNT REPRESENTED PRINCIPAL AMOUNT
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S) REGISTRATION NUMBERS* BY NOTES TENDERED**
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
==============================================================================================================================
TOTAL
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book-entry Holders.
** Unless otherwise indicated, the Holder will be deemed to have tendered the
full aggregate principal amount represented by such Notes. All tenders
must be in integral multiples of $1,000.
================================================================================
<PAGE> 2
This Letter of Transmittal is to be used (i) if certificates of Notes are
to be forwarded herewith, (ii) if delivery of Notes is to be made by book-entry
transfer to an account maintained by the Exchange Agent at The Depository Trust
Company, ("DTC") pursuant to the procedures set forth in "The Exchange
Offer -- Procedures for Tendering" in the Prospectus or (iii) tender of the
Notes is to be made according to the guaranteed delivery procedures described in
the Prospectus under the caption "The Exchange Offer -- Guaranteed Delivery
Procedures." See Instruction 2. Delivery of documents to a book-entry transfer
facility does not constitute delivery to the Exchange Agent.
The term "Holder" with respect to the Exchange Offer means any person in
whose name 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. The
undersigned has completed, executed and delivered this Letter of Transmittal to
indicate the action the undersigned desires to take with respect to the Exchange
Offer. Holders who wish to tender their Notes must complete this letter in its
entirety.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE
TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution ________________________________________________
DTC: Account Number __________________________________________________________
Transaction Code Number ______________________________________________________
Holders whose Notes are not immediately available or who cannot deliver
their Notes and all other documents required hereby to the Exchange Agent on or
prior to the Expiration Date must tender their Notes according to the guaranteed
delivery procedure set forth in the Prospectus under the caption "The Exchange
Offer -- Guaranteed Delivery Procedures." See Instruction 2.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s) _________________________________________________
Name of Eligible Institution that Guaranteed Delivery ________________________
If delivery by book-entry transfer:
Account Number _______________________________________________________________
Transaction Code Number ______________________________________________________
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO AND COMPLETE THE FOLLOWING:
Name _________________________________________________________________________
Address ______________________________________________________________________
<PAGE> 3
LADIES AND GENTLEMEN:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of the Notes
indicated above. Subject to, and effective upon, the acceptance for exchange of
such Notes tendered hereby, the undersigned hereby exchanges, assigns, and
transfers to or upon the order of the Company all right, title and interest in
and to such Notes as are being tendered hereby, including all rights to accrued
and unpaid interest thereon as of the Expiration Date. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent the true and lawful
agent and attorney-in-fact of the undersigned (with full knowledge that said
Exchange Agent acts as the agent of the Company in connection with the Exchange
Offer) to cause the Notes to be assigned, transferred and exchanged. The
undersigned represents and warrants that it has full power and authority to
tender, exchange, assign and transfer the Notes and to acquire Exchange Notes
issuable upon the exchange of such tendered Notes, and that when the same are
accepted for exchange, the Company will acquire good and unencumbered title to
the tendered Notes, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim.
The undersigned represents to the Company that (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 the undersigned, and (ii) neither the undersigned nor any such
other person has an arrangement or understanding with any person to participate
in the distribution of such Exchange Notes. If the undersigned or the person
receiving the Exchange Notes covered hereby is a broker-dealer that is receiving
the Exchange Notes for its own account in exchange for Notes that were acquired
as a result of market-making activities or other trading activities, the
undersigned acknowledges that it or such other person will deliver a prospectus
in connection with any resale of such Exchange Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
The undersigned and any such other person acknowledge that, if they are
participating in the Exchange Offer for the purpose of distributing the Exchange
Notes, (i) they cannot rely on the position of the staff of the Securities and
Exchange Commission 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 transaction and (ii) failure to comply with such
requirements in such instance could result in the undersigned or any such other
person incurring liability under the Securities Act for which such persons are
not indemnified by the Company. If the undersigned or the person receiving the
Exchange Notes covered by this letter is an affiliate (as defined under Rule 405
of the Securities Act) of the Company, the undersigned represents to the Company
that the undersigned understands and acknowledges that such Exchange Notes may
not be offered for resale, resold or otherwise transferred by the undersigned or
such other person without registration under the Securities Act or an exemption
therefrom. The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Exchange Agent or the Company to
be necessary or desirable to complete the exchange, assignment and transfer of
tendered Notes or transfer ownership of such Notes on the account books
maintained by a book-entry transfer facility. The undersigned further agrees
that acceptance of any tendered Notes by the Company and the issuance of
Exchange Notes in exchange therefor shall constitute performance in full by the
Company of its obligations under the Registration Rights Agreement and that the
Company shall have no further obligations or liabilities thereunder for the
registration of the Notes or the Exchange Notes.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer -- Conditions." The undersigned
recognizes that as a result of these conditions (which may be waived, in whole
or in part, by the Company), as more particularly set forth in the Prospectus,
the Company may not be required to exchange any of the Notes tendered hereby
and, in such event, the Notes not exchanged will be returned to the undersigned
at the address shown below the signature of the undersigned. All authority
herein conferred or agreed to be conferred shall survive the death or incapacity
of the undersigned and every obligation of the undersigned hereunder shall be
binding upon the heirs, personal representatives, successors and assigns of the
undersigned. Tendered Notes may be withdrawn at any time prior to the Expiration
Date.
Unless otherwise indicated under the caption "Special Registration
Instructions" or under the caption "Special Delivery Instructions" in this
Letter of Transmittal, certificates for all Exchange Notes delivered in exchange
for tendered Notes, and any Notes delivered herewith but not exchanged, will be
registered in the name of the undersigned and shall be delivered to the
undersigned at the address shown below the signature of the undersigned. If an
Exchange Note is to be issued to a person other than the person(s) signing this
Letter of Transmittal, or if the Exchange Note is to be mailed to someone other
than the person(s) signing this Letter of Transmittal or to the person(s)
signing this Letter of Transmittal at an address different than the address
shown on this Letter of Transmittal, the information requested under the
appropriate caption in this Letter of Transmittal should be provided. If Notes
are surrendered by Holder(s) that have provided information under either the
caption entitled "Special Registration Instructions" or the caption entitled
"Special Delivery Instructions" in this Letter of Transmittal, signature(s) on
this Letter of Transmittal must be guaranteed by an Eligible Institution (as
defined in Instruction 4).
<PAGE> 4
------------------------------------------------------------
SPECIAL REGISTRATION INSTRUCTIONS
To be completed ONLY if the Exchange Notes are to be ISSUED in the
name of someone other than the undersigned.
Name: _____________________________________________
Address: __________________________________________
__________________________________________
__________________________________________
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the Exchange Notes are to be DELIVERED to
someone other than the undersigned, or to the undersigned at an address
other than that shown under "Description of Notes Tendered Hereby."
Name: _____________________________________________
Book-Entry Transfer Facility Account:
_____________________________________________
Address: _________________________________________
__________________________________________
__________________________________________
(Employer Identification or Social Security Number):
__________________________________________
__________________________________________
<PAGE> 5
REGISTERED HOLDER(S) OF NOTES SIGN HERE
(IN ADDITION, COMPLETE SUBSTITUTE FORM W-9 BELOW)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF REGISTERED HOLDER(S))
Must be signed by registered holder(s) exactly as name appears on the Notes or
on a security position listing as the owner of the Notes or by person(s)
authorized to become registered holder(s) by properly completed bond powers
transmitted herewith. If signature is by attorney-in-fact, trustee, executor,
administrator, guardian, officer of a corporation or other person acting in a
fiduciary capacity, please provide the following information:
Name and Capacity (full title): _______________________________________________
_______________________________________________________________________________
Address (including zip code): _________________________________________________
_______________________________________________________________________________
Area Code and Telephone Number: _______________________________________________
Taxpayer Identification or Social Security No.: _______________________________
Dated: ___________________
SIGNATURE GUARANTEE
(IF REQUIRED -- SEE INSTRUCTION 4)
Authorized Signature (Representative of Signature Guarantor): __________________
________________________________________________________________________________
Name and Title: ________________________________________________________________
________________________________________________________________________________
Name of Plan: __________________________________________________________________
________________________________________________________________________________
Area Code and Telephone Number: ________________________________________________
________________________________________________________________________________
Dated: ____________________________
<PAGE> 6
IMPORTANT TAX INFORMATION
Under federal income tax law, a Holder tendering Notes is required to
provide the Exchange Agent with such Holder's correct TIN on Substitute Form W-9
above. If such Holder is an individual, the TIN is the Holder's social security
number. The Certificate of Awaiting Taxpayer Identification Number should be
completed if the tendering Holder has not been issued a TIN and has applied for
a number or intends to apply for a number in the near future. If the Exchange
Agent is not provided with the correct TIN, the Holder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that are
made to such Holder with respect to tendered Notes may be subject to backup
withholding. Certain Holders (including, among others, all domestic corporations
and certain foreign individuals and foreign entities) are not subject to these
backup withholding and reporting requirements. Such a Holder, who satisfies one
or more of the conditions set forth in Part 2 of the Substitute Form W-9 should
execute the certification following such Part 2. In order for a foreign Holder
to qualify as an exempt recipient, that Holder must submit to the Exchange Agent
a properly completed Internal Revenue Service Form W-9, signed under penalties
of perjury, attesting to that Holder's exempt status. Such forms can be obtained
from the Exchange Agent. If backup withholding applies, the Exchange Agent is
required to withhold 31% of any amounts otherwise payable to the Holder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a Holder with
respect to Notes tendered for exchange, the Holder is required to notify the
Exchange Agent of his or her correct TIN by completing the form herein
certifying that the TIN provided on Substitute Form W-9 is correct (or that such
Holder is awaiting a TIN) and that (i) each Holder is exempt, (ii) such Holder
has not been notified by the Internal Revenue Service that he or she is subject
to backup withholding as a result of failure to report all interest or dividends
or (iii) the Internal Revenue Service has notified such Holder that he or she is
no longer subject to backup withholding.
<PAGE> 7
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
Each Holder is required to give the Exchange Agent the social security
number or employer identification number of the record Holder(s) of the Notes.
If Notes are in more than one name or are not in the name of the actual Holder,
consult the instructions on Internal Revenue Service Form W-9, which may be
obtained from the Exchange Agent, for additional guidance on which number to
report.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
If the tendering Holder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, write "Applied For"
in the space for the TIN, sign and date the Substitute Form W-9. If such
certificate is completed and the Exchange Agent is not provided with the TIN
within 60 days, the Exchange Agent will withhold 31% of all payments made
thereafter until a TIN is provided to the Exchange Agent.
THIS SUBSTITUTE FORM W-9 MUST BE COMPLETED AND SIGNED
Please provide your social security number or other taxpayer identification
number on the following Substitute Form W-9 and certify therein that you are not
subject to backup withholding. Payor: Allied Waste Industries, Inc.
<TABLE>
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- ------------------------------------------------------------------------------------------------------
SUBSTITUTE TAXPAYER IDENTIFICATION NO. FOR PAYEES EXEMPT FROM
FORM W-9 BACKUP WITHHOLDING
DEPARTMENT OF THE TREASURY ---------------------------------------
INTERNAL REVENUE SERVICE Enter your tax identification number in the appropriate box.
Payer's Request for Taxpayer For most individuals, this is your social security number.
Identification Number (TIN)
---------------------------------------------------------------
Social security number
---------------------------------------------------------------
OR
---------------------------------------------------------------
Employer identification number
---------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The information provided on this form is true, correct and complete; AND
(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I
have not been notified by the Internal Revenue Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all interest or dividends or (c) the IRS has
notified me that I am no longer subject to backup withholding; AND
(3) I am not a nonresident alien individual or foreign entity.
- ------------------------------------------------------------------------------------------------------
SIGNATURE ____________________________________________________________DATE ____________________, 199
- ------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 8
INSTRUCTIONS TO THE LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES.
All physically delivered Notes or confirmation of any book-entry transfer
to the Exchange Agent's account at a book-entry transfer facility of Notes
tendered by book-entry transfer, as well as a properly completed and duly
executed copy of this Letter of Transmittal or facsimile thereof, and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent at any of its addresses set forth herein on or prior to the
Expiration Date (as defined in the Prospectus). The method of delivery of this
Letter of Transmittal, the Notes and any other required documents is at the
election and risk of the Holder, and except as otherwise provided below, the
delivery will be deemed made only when actually received by the Exchange Agent.
If such delivery is by mail, it is suggested that registered mail with return
receipt requested, properly insured, be used. No alternative, conditional,
irregular or contingent tenders will be accepted. All tendering Holders, by
execution of this Letter of Transmittal (or facsimile thereof), shall waive any
right to receive notice of the acceptance of the Notes for exchange. Delivery to
an address other than as set forth herein, or instructions via a facsimile
number other than the ones set forth herein, will not constitute a valid
delivery.
2. GUARANTEED DELIVERY PROCEDURES.
Holders who wish to tender their Notes, but whose Notes are not immediately
available and thus cannot deliver their Notes, the Letter of Transmittal or any
other required documents to the Exchange Agent (or comply with the procedures
for book-entry transfer) prior to the Expiration Date, may effect a tender if:
(a) the tender is made through 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");
(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 registration
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 Notes (or a
confirmation of book-entry transfer of such Notes into the Exchange Agent's
account at DTC) 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 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 DTC) 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. ANY HOLDER WHO WISHES TO TENDER NOTES PURSUANT TO
THE GUARANTEED DELIVERY PROCEDURES MUST ENSURE THAT THE EXCHANGE AGENT RECEIVES
THE NOTICE OF GUARANTEED DELIVERY RELATING TO SUCH NOTES PRIOR TO THE EXPIRATION
DATE. FAILURE TO COMPLETE THE GUARANTEED DELIVERY PROCEDURES WILL NOT, OF
ITSELF, AFFECT THE VALIDITY OR EFFECT A REVOCATION OF ANY LETTER OF TRANSMITTAL
FORM PROPERLY COMPLETED AND EXECUTED BY A HOLDER WHO ATTEMPTED TO USE THE
GUARANTEED DELIVERY PROCEDURES.
<PAGE> 9
3. PARTIAL TENDERS; WITHDRAWALS.
If less than the entire principal amount of Notes evidenced by a submitted
certificate is tendered, the tendering Holder should fill in the principal
amount tendered in the column entitled "Principal Amount Tendered" of the box
entitled "Description of Notes Tendered Hereby." A newly issued Note for the
principal amount of Notes submitted but not tendered will be sent to such Holder
as soon as practicable after the Expiration Date. All Notes delivered to the
Exchange Agent will be deemed to have been tendered in full unless otherwise
indicated. NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY
TIME PRIOR TO THE EXPIRATION DATE, AFTER WHICH TENDERS OF NOTES ARE IRREVOCABLE.
To be effective, a written, telegraphic or facsimile notice of withdrawal must
be timely received by the Exchange Agent. 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 registration
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 DTC to
be credited), (iii) be signed by the Holder in the same manner as the original
signature on the Letter of Transmittal (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 of 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 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 Exchange Offer.
4. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND
ENDORSEMENTS; GUARANTEE OF SIGNATURES.
If this Letter of Transmittal is signed by the registered Holder(s) of the
Notes tendered hereby, the signature must correspond with the name(s) as written
on the face of the certificates without alternation or enlargement or any change
whatsoever. If this Letter of Transmittal is signed by a participant in DTC, the
signature must correspond with the name as it appears on the security position
listing as the owner of the Notes. IF ANY OF THE NOTES TENDERED HEREBY ARE OWNED
OF RECORD BY TWO OR MORE JOINT OWNERS, ALL SUCH OWNERS MUST SIGN THIS LETTER OF
TRANSMITTAL. IF A NUMBER OF NOTES REGISTERED IN DIFFERENT NAMES ARE TENDERED, IT
WILL BE NECESSARY TO COMPLETE, SIGN AND SUBMIT AS MANY SEPARATE COPIES OF THIS
LETTER OF TRANSMITTAL AS THERE ARE DIFFERENT REGISTRATIONS OF NOTES. Signatures
of this Letter of Transmittal or a notice of withdrawal, as the case may be,
must be guaranteed by an Eligible Institution unless the Notes tendered hereby
are tendered (i) by a registered Holder who has not provided information under
the caption "Special Registration Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. If the Letter of Transmittal is signed by the registered
Holder(s) of Notes (which term, for the purposes described herein, shall include
a participant in DTC whose name appears on a security listing as the owner of
the Notes) listed and tendered hereby, no endorsements of the tendered Notes or
separate written instruments of transfer or exchange are required. In any other
case, the registered Holder (or beneficial Holder) must either properly endorse
the Notes or transmit properly completed bond powers with the Letter of
Transmittal (in either case, executed exactly as the name(s) of the registered
Holder(s) appear(s) on the Notes, and, with respect to a participant in DTC
whose name appears on a security position listing as the owner of Notes, exactly
as the name of the participant appears on such security position listing), with
the signature on the Notes or bond power guaranteed by an Eligible Institution
(except where the Notes are tendered for the account of an Eligible
Institution). If this Letter of Transmittal, any certificates or separate
written instruments of transfer or exchange 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, proper evidence
satisfactory to the Company of their authority so to act must be submitted.
<PAGE> 10
5. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS.
Tendering Holders should indicate, in the applicable box, the name and
address (or account at DTC) in which the Exchange Notes or substitute Notes for
principal amounts not tendered or not accepted for exchange are to be issued (or
deposited), if different from the names and addresses or accounts of the person
signing this Letter of Transmittal. In the case of issuance in a different name,
the employer identification number or social security number of the person named
must also be indicated and the tendering Holder should complete the applicable
box. If no instructions are given, the Exchange Notes (and any Notes not
tendered or not accepted) will be issued in the name of and sent to the
beneficial Holder of the Notes or deposited at such Holder's account at DTC.
6. TRANSFER TAXES.
The Company shall pay all transfer taxes, if any, applicable to the
transfer and exchange of Notes to it or its order pursuant to the Exchange
Offer. If a transfer tax is imposed for any other reason other than the transfer
and exchange of Notes to the Company or its order pursuant to the Exchange
Offer, the amount of any such transfer taxes (whether imposed on the registered
Holder or any other person) will be payable by the tendering Holder. If
satisfactory evidence of payment of such taxes or exception therefrom is not
submitted herewith, the amount of such transfer taxes will be collected from the
tendering Holder by the Exchange Agent. Except as provided in this Instruction
6, it will not be necessary for transfer stamps to be affixed to the Notes
listed in this Letter of Transmittal.
7. WAIVER OF CONDITIONS; MUTILATED, LOST, STOLEN OR DESTROYED NOTES; VALIDITY
AND FORM.
The Company reserves the right, in its reasonable judgment, to waive, in
whole or in part, any of the conditions to the Exchange Offer set forth in the
Prospectus. Any Holder whose Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions. 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 of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right, in its reasonable judgment, 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 this 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, neither the Company, the
Exchange Agent nor 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 Agent 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 Holder as soon as practicable following the
Expiration Date.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering as well as requests for
additional copies of the Prospectus and this Letter of Transmittal, may be
directed to the Exchange Agent at the address and telephone number(s) set forth
above. In addition, all questions relating to the Exchange Offer, as well as
requests for assistance or additional copies of the Prospectus and this Letter
of Transmittal, may be directed to Allied Waste Industries, Inc., 15880 North
Greenway/Hayden Loop, Suite 100, Scottsdale, Arizona 85260, Attn: Investor
Relations, telephone (602) 423-AWIN.
THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH NOTES OR
CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A
NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR
TO THE EXPIRATION DATE.
