SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 30, 1999
ALLIED WASTE INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization.)
0-19285 88-0228636
(Commission File Number) (IRS Employer Identification No.)
15880 North Greenway-Hayden Loop, Suite 100
Scottsdale, Arizona 85260
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602) 423-2946
Not Applicable
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On July 30, 1999, the Company completed its previously announced acquisition of
Browning-Ferris Industries, Inc. ("BFI"). As a result of the acquisition, which
was effected by a merger of a wholly owned subsidiary of the Company and BFI,
BFI became a wholly owned subsidiary of the Company and each previously
outstanding share of common stock of BFI was converted into the right to receive
$45 per share in cash. The Company's August 2, 1999 press release, which
contains additional information regarding the acquisition, is filed as an
exhibit hereto and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(a) Financial Statements for Browning-Ferris Industries, Inc.
The financial statements for Browning-Ferris Industries, Inc.
which include a Report of Independent Public Accountants,
Consolidated Balance Sheet - September 30, 1997, 1998 and
March 31, 1999 (undaudited), Consolidated Statements of
Operations for the Three Years Ended September 30, 1998 and
the Six Months Ended March 31, 1998 and 1999 (unaudited),
Consolidated Statements of Common Stockholders' Equity for the
Three Years Ended September 30, 1998, Consolidated Statements
of Cash Flows for the Three Years Ended September 30, 1998 and
the Six Months Ended March 31, 1998 and 1999 (unaudited) and
the Notes to Consolidated Financial Statements, were
previously filed in the Company's Current Report on Form 8-K
dated July 19, 1999.
(b) Pro Forma Financial Information
The pro forma financial statements related to the acquisition
of BFI, which include the Pro Forma Combined Balance Sheet -
March 31, 1999, Pro Forma Combined Statements of Operations
for the Three Months Ended March 31, 1999 and the Year Ended
December 31, 1998 and the Notes to Pro Forma Combined
Financial Statements, were previously filed in the Company's
Current Report on Form 8-K dated July 19, 1999.
(c) Exhibits
Exhibit No. Description
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4.1 Certificate of Designation for Series A Senior Convertible Preferred
Stock
4.2 Certificate of Designation for Series B Junior Preferred Stock
4.3 First Supplemental Indenture, dated July 30, 1999 among the Company,
certain subsidiaries of the Company and U.S. Bank Trust, N.A., as
trustee, regarding 10% Senior Subordinated Notes due 2009 of
Allied Waste North America, Inc.
10.1 Credit Facility dated as of July 30, 1999
10.2 Second Amended and Restated Shareholders Agreement, dated as of July
30, 1999, between the Company and the purchasers of the Series A
Senior Convertible Preferred Stock and related parties
10.3 Amended and Restated Registration Rights Agreement, dated as of July
30, 1999, between the Company and the purchasers of the Series A
Senior Convertible Preferred Stock and related parties
99 Press release dated August 2, 1999
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant, Allied Waste Industries, Inc., has caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
ALLIED WASTE INDUSTRIES, INC.
By: /s/ Steven M. Helm
---------------------------------------------
Steven M. Helm
Vice President-Legal and Corporate Secretary
Date: August 10, 1999
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Exhibit Index
Exhibit No. Description
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4.1 Certificate of Designation for Series A Senior Convertible Preferred
Stock
4.2 Certificate of Designation for Series B Junior Preferred Stock
4.3 First Supplemental Indenture, dated July 30, 1999 among the Company,
certain subsidiaries of the Company and U.S. Bank Trust, N.A., as
trustee, regarding 10% Senior Subordinated Notes due 2009 of
Allied Waste North America, Inc.
10.1 Credit Facility dated as of July 30, 1999
10.2 Second Amended and Restated Shareholders Agreement, dated as of July
30, 1999, between the Company and the purchasers of the Series A
Senior Convertible Preferred Stock and related parties
10.3 Amended and Restated Registration Rights Agreement, dated as of July
30, 1999, between the Company and the purchasers of the Series A
Senior Convertible Preferred Stock and related parties
99 Press release dated August 2, 1999
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CERTIFICATE OF DESIGNATION OF
SERIES A SENIOR CONVERTIBLE PREFERRED STOCK
OF ALLIED WASTE INDUSTRIES, INC.
Pursuant to Section 151 of the General Corporation Law of the State of Delaware
We, Thomas H. Van Weelden and Steven M. Helm, Chairman of the
Board of Directors, President and Chief Executive Officer, and Vice
President-Legal and Secretary, respectively, of Allied Waste Industries, Inc., a
corporation organized and existing under the General Corporation Law of the
State of Delaware (the "Corporation"), DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation, as amended,
the Board of Directors on July 27, 1999 adopted the following resolution
creating a series of 1,000,000 shares of Preferred Stock, par value $.10 per
share, designated as Series A Senior Convertible Preferred Stock:
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority
vested in the Board of Directors of this Corporation in accordance with the
provisions of its Certificate of Incorporation, as amended, a series of
Preferred Stock, par value $.10 per share, of the Corporation be and it hereby
is created, and that the designation and amount and relative rights, limitations
and preferences thereof are as follows:
1. Certain Definitions. Unless the context otherwise requires, the terms defined
in this paragraph 1 shall have, for all purposes of this resolution, the
meanings herein specified.
"Accrual Rate" means, with respect to any Dividend Period,
(a) with respect to dividends accruing prior to the earlier of the date
the Stockholder Approval is obtained and the tenth anniversary of the
Issue Date, (i) 6.5% of the Liquidation Preference per annum during the
first six months following the Issue Date and (ii) thereafter, 6.5% of
the Liquidation Preference as of the first day of such Dividend Period
per annum plus an additional 1% of the Liquidation Preference as of the
first day of such Dividend Period per annum for each consecutive,
non-overlapping complete six calendar month period after the Issue Date
until the Stockholder Approval is obtained;
(b) with respect to dividends accruing on or after the date the
Stockholder Approval has been obtained and on or before the tenth
anniversary of the Issue Date, 6.5% of the Liquidation Preference as of
the first day of such Dividend Period per annum; or
(c) with respect to dividends accruing after the tenth anniversary of
the Issue Date, 12% of the Liquidation Preference as of the first day
of such Dividend Period per annum;
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provided, however, that the Accrual Rate for any Divided Period shall not exceed
12% of the Liquidation Preference as of the first day of such Dividend Period
per annum.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person. For 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 Waste N.A." means Allied Waste North America, Inc., a Delaware
corporation and wholly owned Subsidiary of the Corporation.
"Apollo" means Apollo Management IV, L.P. and its Related Persons.
"Blackstone" means Blackstone Capital Partners III Merchant Banking
Fund, L.P. and its Related Persons.
"Business Day" means any day other than a Saturday, a Sunday or a day
when commercial banks in The City of New York are authorized by law, rule or
regulation to be closed.
"Board of Directors" means the Board of Directors of the Corporation.
"Capital Stock" means, with respect to any Person, 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.
"Change of Control" shall be deemed to have occurred in the event that,
after the date hereof,
(a) any Person or any Persons (other than Apollo, Blackstone or their respective
Affiliates and Related Persons) acting together that would constitute a "group"
(a "Group," which term also includes each member thereof) for purposes of
Section 13(d) under the Exchange Act or any successor provision, together with
any Affiliates 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 Corporation;
(a) a majority of the seats (other than vacant seats) on the Board of Directors
shall at any time be occupied by Persons (other than nominees of Blackstone or
Apollo or their respective Affiliates) who were neither nominated by the Board
of Directors nor appointed by directors so nominated;
(a) Allied Waste N.A. (or its successor) ceases to be a Subsidiary of the
Corporation unless substantially all of the assets previously owned by Allied
Waste N.A. are otherwise owned directly or indirectly by the Corporation; or
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(a) the sale, transfer or lease by the Corporation (on a consolidated basis) or
Allied Waste N.A. and its Subsidiaries (on a consolidated basis) of all or
substantially all of its assets unless after such sale, transfer or lease
substantially all of the assets owned prior to such sale, transfer or lease
continue to be owned directly or indirectly by the Corporation.
"Change of Control Offer" means an offer to purchase all of the shares
of Preferred Stock outstanding pursuant to paragraph 8 below at a per share
purchase price equal to the Change of Control Price.
"Change of Control Payment Date" means a business day, as specified in
a notice given pursuant to paragraph 8, no earlier than 30 days nor later than
45 days from the date the Change of Control Offer is commenced.
"Change of Control Price" means 101% of the sum of (a) the Liquidation
Preference plus (b) dividends accrued on a share of Preferred Stock for the
period from the most recent Dividend Payment Date through but excluding the
Change of Control Payment Date.
"Common Equivalent Rate" means, with respect to any Dividend Period,
(i) the product of (a) four, and (b) the amount of dividends that the holder of
one share of Preferred Stock would have been entitled to receive if such holder
had converted (assuming the Stockholder Approval had been obtained) such share
into shares of Common Stock on the first day of such Dividend Period, divided by
(ii) the Liquidation Preference of a share of Preferred Stock on the first day
of such Dividend Period.
"Common Stock " means, with respect to any Person, 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. Except as otherwise expressly provided or unless the context
otherwise requires, references to "Common Stock" shall mean the Common Stock of
the Corporation.
"Conversion Date" shall have the meaning set forth in subparagraph 5(c)
below.
"Conversion Price" means the price per share of Common Stock or Unit
used to determine the number of shares of Common Stock or Units deliverable upon
conversion of a share of the Preferred Stock, which price shall initially be
$18.00 per share, subject to adjustment in accordance with the provisions of
paragraph 5 below.
"Current Market Price" at any date, means (in each case as adjusted for
any stock dividend, split, combination or reclassification that took effect
during the Measurement Period);
(a) if the Common Stock is publicly traded on any national securities exchange,
the average of the daily closing prices per share of Common Stock during the
Measurement Period (as reported (absent manifest error) in The Wall Street
Journal);
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(a) if the Common Stock is not publicly traded on any national securities
exchange, but traded over-the-counter, the average of the daily closing reported
bid and asked prices of the Common Stock during the Measurement Period, as
reported by Nasdaq or any comparable system (or if not so reported by Nasdaq or
any comparable system, as furnished by two members of the National Association
of Securities Dealers, Inc. selected from time to time by the Corporation for
that purpose); or
(a) if the Common Stock is not traded in such manner that the quotations
referred to above are available for the Measurement Period, Current Market Price
shall be deemed to be the fair market value as determined in good faith by the
Board of Directors.
"Dividend Payment Date" means March 31, June 30, September 30 and
December 31 of each year.
"Dividend Period" means (a) with respect to the first dividend period,
the period beginning on and including the Issue Date and ending on and excluding
the first Dividend Payment Date and (b) thereafter, each quarterly period
beginning on and excluding a Dividend Payment Date and ending on and including
the next succeeding Dividend Payment Date.
"Exchange Act" means the Securities Exchange Act of 1934 (or any
successor statute), as it may be amended from time to time.
"Excluded Stock" means shares of Common Stock issued or reserved for
issuance by the Corporation (a) as a stock dividend payable in shares of Common
Stock, (b) upon any subdivision or split-up of the outstanding shares of Common
Stock, (c) upon conversion of shares of Preferred Stock or Junior Preferred
Stock, (d) pursuant to bona fide employee benefit plans or (e) in a transaction
that is addressed in subparagraph 5(e) (other than clause (i) of subparagraph
5(e)).
"Issue Date" means the date that shares of Preferred Stock are first
issued by the Corporation.
"Junior Preferred Stock" means the Series B Junior Preferred Stock, par
value $.10 per share, of the Corporation.
"Junior Stock" means any class or series of stock of the Corporation
not entitled to receive any dividends and/or any assets upon the liquidation,
dissolution or winding up of the affairs of the Corporation until the Preferred
Stock shall have received the entire amount to which such stock is entitled
(including, without limitation, the Junior Preferred Stock).
"Liquidation Preference" means, on any date, the sum of (a) $1,000 per
share of Preferred Stock, plus (b) accrued and unpaid dividends that were added
to the Liquidation Preference prior to such date in accordance with subparagraph
2(c) below.
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"Measurement Period" means, as of any date, the thirty consecutive
trading days ending fifteen trading days before such date.
"Normal Cash Dividend" means a cash dividend on the Common Stock;
provided that the per share amount of such dividend, together with the aggregate
per share amount of all cash dividends and distributions on the Common Stock
paid or declared in the 365 day period ending on the date such dividend is
declared does not exceed 5% of the Current Market Price of the Common Stock on
the date such dividend is declared.
"Parity Stock" means any other class or series of stock of the
Corporation entitled to receive payment of dividends and/or assets upon the
liquidation, dissolution or winding up of the affairs of the Corporation, in
either case on a parity with the Preferred Stock.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Record Date" means, with respect to the dividend payable on March 31,
June 30, September 30 and December 31, respectively, of each year, the preceding
March 15, June 15, September 15 and December 15.
"Redemption Agent" means a bank or trust company in good standing,
organized under the laws of the United States of America or any jurisdiction
thereof, having capital, surplus and undivided profits aggregating at least One
Hundred Million Dollars, appointed by the Corporation to act as agent to redeem
the Preferred Stock.
"Redemption Date" means the date fixed for redemption of the Preferred
Stock pursuant to subparagraph 4(b) below or, if the Corporation shall default
in the payment of the Redemption Price on such date, the date the Corporation
actually makes such payment
"Redemption Price" means the sum of (a) the Liquidation Preference on
the Redemption Date plus (b) dividends accrued and unpaid on a share of
Preferred Stock for the period from the most recent Dividend Payment Date
through the Redemption Date.
"Related Person" has the meaning ascribed to such term in the
Shareholders Agreement.
"Senior Stock" means any class or series of stock of the Corporation
ranking senior to the Preferred Stock in respect of the right to receive
dividends and/or assets upon the liquidation, dissolution or winding up of the
affairs of the Corporation.
"Shareholders Agreement" means the Second Amended and Restated
Shareholders Agreement, dated as of the Issue Date, by and among the Corporation
and the stockholders of the Corporation named therein, as it may be amended from
time to time in accordance with the provisions thereof.
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"Stockholder Approval" means approval of the conversion of the
Preferred Stock into shares of Common Stock by holders of a majority of the
shares of the capital stock of the Corporation voting thereon (at a meeting at
which a quorum is present).
"Subsidiary" means (a) a corporation more than 50% of the combined
voting power of the outstanding Voting Stock of which is owned, directly or
indirectly, by the Corporation, or by one or more Subsidiaries, or by the
Corporation and one or more Subsidiaries, (b) a partnership of which the
Corporation, or one or more other Subsidiaries, or the Corporation and one or
more Subsidiaries, directly or indirectly, is the general partner and has the
power to direct the policies, management and affairs or (c) any other Person
(other than a corporation) in which the Corporation, or one or more
Subsidiaries, or the Corporation and one or more Subsidiaries, directly or
indirectly, has at least a majority ownership interest and power to direct to
policies, management and affairs thereof.
"Trigger Date" means the fifth anniversary of the Issue Date.
"Units" means one or more units of 1/10,000 of a share of Junior
Preferred Stock.
"Voting Stock" means, with respect to any Person, 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.
2. Dividends. (a) The holders of Preferred Stock shall be entitled to receive
cash dividends, out of funds legally available for that purpose, in the amounts
set forth below. Such dividends shall be cumulative from the Issue Date and
shall be payable in arrears, when, as and if declared by the Board of Directors,
on each Dividend Payment Date, commencing on the first Dividend Payment Date
following the Issue Date; provided, that if any such payment date is not a
Business Day then such dividend shall be payable on the next Business Day.
(b) Dividends shall accrue on the Liquidation Preference on a daily basis and be
payable in respect of each Dividend Period, at an annual rate (with compounding
quarterly as of each Dividend Payment Date) equal to the greater of (i) the
Common Equivalent Rate and (ii) the Accrual Rate; provided, that dividends
accruing on or after the Trigger Date that are not paid in cash on the
applicable Dividend Payment Date shall accrue with respect to the Dividend
Period ending on such Dividend Payment Date at an annual rate equal to the
greater of (i) the Common Equivalent Rate and (ii) 12% of the Liquidation
Preference as of the first day of such Dividend Period.
(b) Dividends shall be paid to the holders of record of the Preferred Stock as
their names appear on the share register of the Corporation on the corresponding
Record Date. Dividends on account of arrears for any particular Dividend Period
in which dividends were not paid in cash on the Dividend Payment Date applicable
to such Dividend Period shall be added to the Liquidation Preference on the
relevant Dividend Payment Date and may no longer be declared or paid as
dividends in cash.
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(b) If full cash dividends are not paid or made available to the holders of all
outstanding shares of Preferred Stock on the applicable Dividend Payment Date,
and funds available shall be insufficient to permit payment in full in cash to
all such holders of the preferential amounts to which they are then entitled,
the entire amount available for payment of cash dividends shall be distributed
among the holders of the Preferred Stock ratably in proportion to the full
amount to which they would otherwise be respectively entitled, and any remainder
not paid in cash to the holders of the Preferred Stock shall be added to the
Liquidation Preference as provided in subparagraph 2(c) above.
(b) The Corporation shall not (i) declare or pay any dividend or make any
distribution on any Junior Stock, whether in cash, property or otherwise (other
than dividends (x) payable in shares (or options, warrants or rights to acquire
shares) of the class or series upon which such dividends are declared or paid or
(y) in the case of Junior Stock other than Common Stock, payable in shares (or
options, warrants or rights to acquire shares) of Common Stock, in each case,
together with cash in lieu of fractional shares) or (ii) purchase or redeem, or
permit any Subsidiary to purchase or redeem any Junior Stock, or pay or make
available any monies for a sinking fund for the purchase or redemption of any
Junior Stock, unless all dividends to which the holders of Preferred Stock shall
have been entitled for the Dividend Period immediately preceding such action
(or, if such action occurs on a Dividend Payment Date, for the Dividend Period
ending on such Dividend Payment Date) shall have been paid in cash on the
applicable Dividend Payment Date.
(f) If the Company is required by a "determination" (as
defined below) to pay any United States federal income tax (a "Tax Payment") in
respect of any addition to the Liquidation Preference as a result of
subparagraph 2(c) with respect to a record holder of the Preferred Stock, the
Company may withhold such Tax Payment (but not any interest factor, penalty, or
addition thereto) from a subsequent cash dividend to such record holder (in
addition to any required withholdings of United States federal income tax on
such cash dividend). For avoidance of doubt, the Company shall not be entitled
to withhold any Tax Payment if the record holder of the Preferred Stock at the
time of any required Tax Payment is not the record holder at the time of any
subsequent cash dividend. A "determination" shall mean a decision, judgment,
decree, or other order by any court of competent jurisdiction, which decision,
judgment, decree, or other order has become final, a closing agreement entered
into under Section 7121 (or any successor to such Section) of the Internal
Revenue Code of 1986, as amended, or any other settlement agreement entered into
in connection with an administrative or judicial proceeding.
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2. Distributions Upon Liquidation, Dissolution or Winding Up. Upon any voluntary
or involuntary liquidation, dissolution or other winding up of the affairs of
the Corporation, before any distribution or payment shall be made to the holders
of Junior Stock, the holders of the Preferred Stock shall be entitled to be
paid, to the extent possible in cash, the greater of (a) the Liquidation
Preference, together with dividends accrued thereon with respect to the period
from the most recent Dividend Payment Date through and excluding the date of
determination, and (b) the amount that would be payable to the holders of the
Preferred Stock if such holders had converted (assuming the Stockholder Approval
had been obtained) all outstanding shares of Preferred Stock into shares of
Common Stock immediately prior to such liquidation, dissolution or other winding
up. If such payment shall have been made in full to the holders of the Preferred
Stock, the remaining assets and funds of the Corporation shall be distributed
among the holders of Junior Stock, according to their respective shares and
priorities. If, upon any such liquidation, dissolution or other winding up of
the affairs of the Corporation, the net assets of the Corporation distributable
among the holders of all outstanding shares of the Preferred Stock shall be
insufficient to permit the payment in full to such holders of the preferential
amounts to which they are entitled, then the entire net assets of the
Corporation shall be distributed among the holders of the Preferred Stock
ratably in proportion to the full amounts to which they would otherwise be
respectively entitled. Neither the consolidation or merger of the Corporation
into or with another corporation or corporations, nor the sale of all or
substantially all of the assets of the Corporation to another corporation or
corporations shall be deemed a liquidation, dissolution or winding up of the
affairs of the Corporation within the meaning of this paragraph 3.
2. Redemption by the Corporation. (a) The Corporation shall not have the right
to redeem the Preferred Stock prior to the later of (i) the third anniversary of
the Issue Date and (ii) receipt of the Stockholder Approval. Thereafter, the
Corporation shall have the right to redeem the Preferred Stock, in whole but not
in part, at the Redemption Price; provided that, if such redemption is to be
effected prior to the Trigger Date, the Corporation shall not have such right
unless the Current Market Price on the day before the date of notice of the
Corporation's intent to redeem the Preferred Stock (the "Redemption Notice")
exceeds 150% of the Conversion Price as then in effect.
(b) A Redemption Notice shall be sent by or on behalf of the Corporation, by
first class mail, postage prepaid, to the holders of record of the Preferred
Stock at their respective addresses as they shall appear on the records of the
Corporation, not less than thirty days nor more than sixty days prior to the
Redemption Date (i) notifying such holders of the election of the Corporation to
redeem such shares and of the date of redemption, (ii) stating the date on which
the shares cease to be convertible and the Conversion Price, (iii) stating the
place or places at which the shares called for redemption shall, upon
presentation and surrender of the certificates evidencing such shares, be
redeemed, and the Redemption Price to be paid therefor, and (iv) stating the
name and address of the Redemption Agent, and the name and address of the
Corporation's transfer agent for the Preferred Stock.
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(b) The Corporation shall appoint one or more Redemption Agents. Following such
appointment and prior to any redemption, the Corporation shall deliver to the
Redemption Agent irrevocable written instructions authorizing the Redemption
Agent, on behalf and at the expense of the Corporation, to cause the Redemption
Notice to be duly mailed as soon as practicable after receipt of such
irrevocable instructions and in accordance with the above provisions. All funds
necessary for the redemption shall be deposited with the Redemption Agent in
trust at least one business day prior to the Redemption Date, for the pro rata
benefit of the holders of the Preferred Stock, so as to be and continue to be
available therefor. Neither failure to mail any such Redemption Notice to one or
more such holders nor any defect in any Redemption Notice shall affect the
sufficiency of the proceedings for redemption as to other holders.
(b) If a Redemption Notice shall have been given as hereinbefore provided, then
each holder of Preferred Stock shall be entitled to all preferences and relative
and other rights accorded by this resolution until and including the Redemption
Date. From and after the Redemption Date, Preferred Stock shall no longer be
deemed to be outstanding, and all rights of the holders of such shares shall
cease and terminate, except the right of the holders of such shares, upon
surrender of certificates therefor, to receive amounts to be paid hereunder.
(b) The deposit of monies in trust with the Redemption Agent shall be
irrevocable except that the Corporation shall be entitled to receive from the
Redemption Agent the interest or other earnings, if any, earned on any monies so
deposited in trust, and the holders of the shares redeemed shall have no claim
to such interest or other earnings, and any balance of monies so deposited by
the Corporation and unclaimed by the holders of the Preferred Stock entitled
thereto at the expiration of two years from the Redemption Date shall be repaid,
together with any interest or other earnings thereon, to the Corporation, and
after any such repayment, the holders of the shares entitled to the funds so
repaid to the Corporation shall look only to the Corporation for such payment,
without interest.
2. Conversion Rights. The Preferred Stock shall be convertible as follows:
(b) Conversion. Subject to and upon compliance with the provisions of this
paragraph 5, the holder of any share of Preferred Stock shall have the right at
such holder's option, to convert such share of Preferred Stock (i) prior to the
receipt of the Stockholder Approval, into fully paid and nonassessable Units and
(ii) thereafter, into fully paid and nonassessable shares of Common Stock, in
each case, at the Conversion Price in effect on the Conversion Date. If the
Preferred Stock has been called for redemption, such right of conversion shall
terminate at the close of business on the business day prior to the Redemption
Date.
(b) Conversion Price. Each share of Preferred Stock shall be converted into a
number of shares of Common Stock or Units, as applicable, determined by dividing
the Liquidation Preference on the Conversion Date, together with dividends
accrued thereon with respect to the period from the most recent Dividend Payment
Date through and including the Conversion Date, by the Conversion Price in
effect on the Conversion Date.
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(b) Mechanics of Conversion. The holder of any shares of Preferred Stock may
exercise the conversion right specified in subparagraph 5(a) by surrendering to
the Corporation or any transfer agent of the Corporation the certificate or
certificates for the shares to be converted, accompanied by written notice
specifying the number of shares to be converted. Such written notice may state
that Conversion is conditional upon the occurrence or non-occurrence of one or
more events. Conversion shall be deemed to have been effected on the date when
delivery of notice of an election to convert and certificates for shares is
received by the Corporation and such date is referred to herein as the
"Conversion Date." Subject to the provisions of subparagraph 5(e)(vii), as
promptly as practicable thereafter, the Corporation shall issue and deliver to
or upon the written order of such holder a certificate or certificates for the
number of full shares of Common Stock or a number of full Units, as applicable,
to which such holder is entitled and a check or cash with respect to any
fractional interest in a share of Common Stock or Units, as provided in
subparagraph 5(d).
Subject to the provisions of subparagraph 5(e)(vii), the
person in whose name the certificate or certificates for Common Stock or Junior
Preferred Stock, as applicable, are to be issued shall be deemed to have become
a holder of record of such Common Stock or Junior Preferred Stock, as
applicable, immediately prior to the close of business on the Conversion Date.
Upon conversion of only a portion of the number of shares covered by a
certificate representing shares of Preferred Stock surrendered for conversion,
the Corporation shall issue and deliver to or upon the written order of the
holder of the certificate so surrendered for conversion, at the expense of the
Corporation, a new certificate covering the number of shares of Preferred Stock
representing the unconverted portion of the certificate so surrendered.
(b) Fractional Shares. No fractional shares of Common Stock or Units, as the
case may be, shall be issued upon conversion of shares of Preferred Stock. If
more than one share of Preferred Stock shall be surrendered for conversion at
any one time by the same holder, the number of full shares of Common Stock or
Units, as the case may be, issuable upon conversion thereof shall be computed on
the basis of the aggregate number of shares of Preferred Stock so surrendered.
Instead of any fractional shares of Common Stock or Units, as the case may be,
that would otherwise be issuable upon conversion of any shares of Preferred
Stock, the Corporation shall pay a cash adjustment in respect of such fractional
interest in an amount equal to that fractional interest of a share multiplied by
the then Current Market Price. In lieu of paying cash on account of any
fractional interests, the Corporation may, at its options, cause an agent to
aggregate all fractional share interests and sell such aggregated number of
shares on the open market in regular way brokerage transactions and cause the
aggregate net proceeds (with all costs of sale and brokerage commissions
deducted from the gross proceeds) to be paid pro rata to each Person who
otherwise would be entitled to receive cash in lieu of a fractional share
interest.
(b) Conversion Price Adjustments. The Conversion Price shall be subject to
adjustment from time to time as follows:
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(i) Common Stock Issued at Less Than the Current Market Price. If the
Corporation shall issue any Common Stock, other than Excluded Stock, without
consideration or for a consideration per share less than the Current Market
Price immediately prior to such issuance (other than pursuant to a bona fide
underwritten offering (including so-called Rule 144A offerings) or in connection
with a bona fide acquisition of a business or a line of business or division to
be used in the operation of the business of the Corporation and its Subsidiaries
(whether pursuant to a merger, asset acquisition or otherwise)), the Conversion
Price in effect immediately prior to each such issuance shall immediately
(except as provided below) be reduced to the price determined by multiplying the
Conversion Price in effect immediately prior to such issuance by a fraction (A)
the numerator of which is the sum of (1) the number of shares of Common Stock
outstanding immediately prior to such issuance and (2) the number of shares of
Common Stock that the aggregate consideration, if any, received by the
Corporation upon such issuance, would purchase at such Current Market Price and
(B) the denominator of which is the total number of shares of Common Stock
outstanding immediately after such issuance.
For the purposes of any adjustment of the Conversion Price pursuant to this
clause (e), the following provisions shall be applicable:
(A) Cash. In the case of the issuance of Common Stock for cash, the amount of
the consideration received by the Corporation shall be deemed to be the amount
of the cash proceeds received by the Corporation for such Common Stock before
deducting therefrom any discounts, commissions, taxes or other expenses allowed,
paid or incurred by the Corporation for any underwriting or otherwise in
connection with the issuance and sale thereof.
(A) Consideration Other Than Cash. In the case of the issuance of Common Stock
(otherwise than upon the conversion of shares of capital stock or other
securities of the Corporation) for a consideration in whole or in part other
than cash, including securities acquired in exchange therefor (other than
securities by their terms so exchangeable), the consideration other than cash
shall be deemed to be the fair market value thereof, irrespective of any
accounting treatment.
(A) Options and Convertible Securities. In the case of the issuance of (1)
options, warrants or other rights to purchase or acquire Common Stock (whether
or not at the time exercisable), (2) securities by their terms convertible into
or exchangeable for Common Stock (whether or not at the time so convertible or
exchangeable) or options, warrants or rights to purchase such convertible or
exchangeable securities (whether or not at the time exercisable):
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(1) the aggregate maximum number of shares of Common Stock deliverable upon
exercise of such options, warrants or other rights to purchase or acquire Common
Stock shall be deemed to have been issued at the time such options, warrants or
rights were issued and for a consideration equal to the consideration
(determined in the manner provided in subclauses (A) and (B) above), if any,
received by the Corporation upon the issuance of such options, warrants or
rights plus the minimum purchase price provided in such options, warrants or
rights for the shares of Common Stock covered thereby;
(1) the aggregate maximum number of shares of Common Stock deliverable upon
conversion of or in exchange for any such convertible or exchangeable
securities, or upon the exercise of options, warrants or other rights to
purchase or acquire such convertible or exchangeable securities and the
subsequent conversion or exchange thereof, shall be deemed to have been issued
at the time such securities were issued or such options, warrants or rights were
issued and for a consideration equal to the consideration, if any, received by
the Corporation for any such securities and related options, warrants or rights
(excluding any cash received on account of accrued interest or accrued
dividends), plus the additional consideration (determined in the manner provided
in subclauses (A) and (B) above), if any, to be received by the Corporation upon
the conversion or exchange of such securities, or upon the exercise of any
related options, warrants or rights to purchase or acquire such convertible or
exchangeable securities and the subsequent conversion or exchange thereof;
(1) on any change in the number of shares of Common Stock deliverable upon
exercise of any such options, warrants or rights or conversion or exchange of
such convertible or exchangeable securities or any change in the consideration
to be received by the Corporation upon such exercise, conversion or exchange,
including, but not limited to, a change resulting from the anti-dilution
provisions thereof, the Conversion Price as then in effect shall forthwith be
readjusted to such Conversion Price as would have been obtained had an
adjustment been made upon the issuance of such options, warrants or rights not
exercised prior to such change, or of such convertible or exchangeable
securities not converted or exchanged prior to such change, upon the basis of
such change;
(1) on the expiration or cancellation of any such options, warrants or rights
that are unexercised, or the termination of the right to convert or exchange
such convertible or exchangeable securities, if the Conversion Price shall have
been adjusted upon the issuance thereof, the Conversion Price shall forthwith be
readjusted to such Conversion Price as would have been obtained had an
adjustment been made upon the issuance of such options, warrants, rights or such
convertible or exchangeable securities on the basis of the issuance of only the
number of shares of Common Stock actually issued upon the exercise of such
options, warrants or rights, or upon the conversion or exchange of such
convertible or exchangeable securities; and
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(1) if the Conversion Price shall have been adjusted upon the issuance of any
such options, warrants, rights or convertible or exchangeable securities, no
further adjustment of the Conversion Price shall be made for the actual issuance
of Common Stock upon the exercise, conversion or exchange thereof.
(i) Excluded Stock. All shares of Excluded Stock which the Corporation has
reserved for issuance shall be deemed to be outstanding for all purposes of
computations under subparagraph 5(e)(i).
(i) Stock Dividends Subdivisions, Reclassifications or Combinations. If the
Corporation shall (A) declare a dividend or make a distribution on its Common
Stock in shares of its Common Stock, (B) subdivide or reclassify the outstanding
shares of Common Stock into a greater number of shares, or (C) combine or
reclassify the outstanding Common Stock into a smaller number of shares, the
Conversion Price in effect at the time of the record date for such dividend or
distribution or the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the holder of any
shares of Preferred Stock surrendered for conversion after such date shall be
entitled to receive the number of shares of Common Stock that such holder would
have owned or been entitled to receive had such Preferred Stock been converted
immediately prior to such date. Successive adjustments in the Conversion Price
shall be made whenever any event specified above in this clause (iii) shall
occur (in each case assuming the Stockholder Approval had then been obtained).
(i) Other Distributions. In case the Corporation shall fix a record date for the
making of a distribution (an "Extraordinary Distribution") to all holders of
shares of its Common Stock (A) of shares of any class other than its Common
Stock or (B) of evidence of indebtedness of the Corporation or any Subsidiary or
(C) of assets, including but not limited to, securities issued by Subsidiaries
or others (excluding Normal Cash Dividends and dividends or distributions
referred to in subparagraph 5(e)(iii) above), or (D) of options, warrants or
other rights (excluding those referred to in subparagraph 5(e)(i) above), then
in each such case either, at the option of the Corporation, (x) the Corporation
shall declare and distribute to each holder of shares of Preferred Stock a
dividend or distribution in the same form and kind, and at the same time, as the
Extraordinary Distribution and in an amount so that such holder shall receive
the same dividend or distribution as if such shares of Preferred Stock had been
converted to Common Stock immediately prior to the record date for the
Extraordinary Distribution, or (y) the Conversion Price in effect immediately
prior thereto shall be reduced immediately thereafter to the price determined by
dividing (1) an amount equal to the difference resulting from (A) the number of
shares of Common Stock outstanding on such record date multiplied by the
Conversion Price per share on such record date, less (B) the fair market value
of said shares or evidences of indebtedness or assets or rights or warrants to
be so distributed, by (2) the number of shares of Common Stock outstanding on
such record date. Such adjustment shall be made successively whenever such a
record date is fixed. In the event that such distribution is not so made, the
Conversion Price then in effect shall be readjusted, effective as of the date
when the Board of Directors determines not to distribute such shares, evidences
of indebtedness, assets, rights or warrants, as the case may be, to the
Conversion Price which would then be in effect if such record date had not been
fixed.
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(i) Consolidation, Merger, Sale, Lease or Conveyance. In case of any
consolidation with or merger of the Corporation with or into another corporation
or entity, or in case of any sale, lease or conveyance to another corporation of
the assets of the Corporation as an entirety or substantially as an entirety,
each share of Preferred Stock shall after the date of such consolidation,
merger, sale, lease or conveyance be convertible into the number of shares of
stock or other securities or property (including cash) to which the Common Stock
issuable (immediately prior to the time of such consolidation, merger, sale,
lease or conveyance) upon conversion of such share of Preferred Stock would have
been entitled upon such consolidation, merger, sale, lease or conveyance; and in
any such case, if necessary, the provisions set forth herein with respect to the
rights and interests thereafter of the holders of the shares of Preferred Stock
shall be appropriately adjusted so as to be applicable, as nearly as may
reasonably be, to any shares of stock or other securities or property thereafter
deliverable on the conversion of the shares of Preferred Stock.
(i) Rounding of Calculations. All calculations under this subparagraph (e) shall
be made to the nearest cent or to the nearest one ten thousandth of a share, as
the case may be.
(i) Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In
any case in which the provisions of this subparagraph (e) shall require that an
adjustment shall become effective immediately after a record date for an event,
the Corporation may defer until the occurrence of such event (A) issuing to the
holder of any share of Preferred Stock converted after such record date and
before the occurrence of such event the additional shares of Common Stock or
Junior Preferred Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the shares of Common Stock or Junior
Preferred Stock issuable upon such conversion before giving effect to such
adjustment and (B) paying to such holder any amount of cash in lieu of a
fractional share of Common Stock pursuant to subparagraph 5(d); provided that
the Corporation, upon request, shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares, and such cash, upon the occurrence of the event requiring such
adjustment.
(i) Incorporation of More Favorable Adjustments. If the Corporation issues any
securities in a transaction (or series of related transactions) with an
aggregate fair market value as determined in good faith by the Board of
Directors in excess of $50 million containing provisions that, in the aggregate,
protect the holder or holders thereof against dilution upon the occurrence of
certain events in a manner more favorable to such holder or holders than those
set forth in this paragraph 5 (other than a provision specifying an initial
exercise, conversion or analogous price that is less than the Conversion Price
as then in effect), such provisions shall be deemed to be incorporated herein
with respect to such events as if fully set forth in this Certificate of
Designation and, to the extent the provisions of this paragraph 5 would in the
aggregate be less favorable to the holders of the Preferred Stock, such
provisions shall be substituted therefor.
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(b) Statement Regarding Adjustments. Whenever the Conversion Price shall be
adjusted, the Corporation shall forthwith file, at the office of any transfer
agent for the Preferred Stock and at the principal office of the Corporation, a
statement showing in detail the facts requiring such adjustment and the
Conversion Price that shall be in effect after such adjustment, and the
Corporation shall also cause a copy of such statement to be sent by mail, first
class postage prepaid, to each holder of shares of Preferred Stock at its
address appearing on the Corporation's records. Each such statement shall be
signed by the Corporation's independent public accountants, if applicable. Where
appropriate, such copy may be given in advance and may be included as part of a
notice required to be mailed under the provisions of subparagraph 5(g).
(b) Notice to Holders. In the event the Corporation shall propose to take any
action of the type described in clause (i) (but only if the action of the type
described in clause (i) would result in an adjustment in the Conversion Price),
(iii), (iv) or (v) of subparagraph 5(e), the Corporation shall give notice to
each holder of shares of Preferred Stock, in the manner set forth in
subparagraph 5(f), which notice shall specify the record date, if any, with
respect to any such action and the approximate date on which such action is to
take place. Such notice shall also set forth such facts with respect thereto as
shall be reasonably necessary to indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the Conversion
Price and the number, kind or class of shares or other securities or property
which shall be deliverable upon conversion of shares of Preferred Stock. In the
case of any action which would require the fixing of a record date, such notice
shall be given at least ten days prior to the date so fixed, and in case of all
other action, such notice shall be given at least fifteen days prior to the
taking of such proposed action. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of any such action.
(b) Treasury Stock. For the purposes of this paragraph 5, the sale or other
disposition of any Common Stock theretofore held in the Corporation's treasury
shall be deemed to be an issuance thereof.
(b) Costs. The Corporation shall pay all documentary, stamp, transfer or other
transactional taxes attributable to the issuance or delivery of shares of Common
Stock or Junior Preferred Stock, as applicable, upon conversion of any shares of
Preferred Stock; provided that the Corporation shall not be required to pay any
taxes which may be payable in respect of any transfer involved in the issuance
or delivery of any certificate for such shares in a name other than that of the
holder of the shares of Preferred Stock in respect of which such shares are
being issued.
(b) Reservation of Shares. The Corporation shall reserve at all times so long as
any shares of Preferred Stock remain outstanding, free from preemptive rights,
out of its treasury stock (if applicable) or its authorized but unissued shares,
or both, solely for the purpose of effecting the conversion of the shares of
Preferred Stock, sufficient shares of Common Stock and Junior Preferred Stock to
provide for the conversion of all outstanding shares of Preferred Stock.
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(b) Approvals. If any shares of Common Stock and Junior Preferred Stock to be
reserved for the purpose of conversion of shares of Preferred Stock require
registration with or approval of any governmental authority under any Federal or
state law before such shares may be validly issued or delivered upon conversion,
then the Corporation will in good faith and as expeditiously as possible
endeavor to secure such registration or approval, as the case may be. If, and so
long as, any Common Stock and Junior Preferred Stock into which the shares of
Preferred Stock are then convertible is then listed on any national securities
exchange, the Corporation will, if permitted by the rules of such exchange, list
and keep listed on such exchange, upon official notice of issuance, all shares
of such Common Stock and Junior Preferred Stock issuable upon conversion.
(b) Valid Issuance. All shares of Common Stock and Junior Preferred Stock which
may be issued upon conversion of the shares of Preferred Stock will upon
issuance by the Corporation be duly and validly issued, fully paid and
nonassessable, not issued in violation of any preemptive rights arising under
law or contract and free from all taxes, liens and charges with respect to the
issuance thereof, and the Corporation shall take no action which will cause a
contrary result (including without limitation, any action which would cause the
Conversion Price to be less than the par value, if any, of the Common Stock or
Junior Preferred Stock).
2. Voting Rights
(b) In addition to the voting rights provided by applicable law, the holders of
shares of Preferred Stock shall have the right to vote, together with the Common
Stock and the Junior Preferred Stock, as a single class, on all matters on which
the holders of shares of Common Stock are entitled to vote. For purposes of such
voting, each share of Preferred Stock shall have the number of votes equal to
the number of shares of Common Stock then issuable upon conversion of such share
of Preferred Stock (without regard to whether the Stockholder Approval has then
been obtained) pursuant to paragraph 5.
(b) The holders of shares of Preferred Stock and Junior Preferred Stock,
together, voting separately as a class, shall have the right to elect the number
of directors of the Corporation entitled to be elected pursuant to the
Shareholders Agreement, by and among the Corporation and the investors named
therein, as such agreement may be amended from time to time.
(b) Without the consent of the holders of at least a majority of the shares of
Preferred Stock then outstanding, given in writing or by vote at a meeting of
stockholders called for such purpose, the Corporation will not:
(i) create or issue any Parity Stock or Senior Stock, increase the authorized
amount of any such class, or reclassify any class or series of any Junior Stock
into Parity Stock or Senior Stock; or
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(i) amend, alter or repeal any provision of, or add any provision to, the
Corporation's Certificate of Incorporation or By-Laws (by merger or otherwise),
if such action would alter or change the powers, preferences or special rights
of the shares of the Preferred Stock so as to effect them adversely, or increase
or decrease below the number then outstanding the number of shares of Preferred
Stock authorized hereby.
2. Capital. On any redemption of Preferred Stock, the Corporation's capital
shall be reduced by an amount equal to the Liquidation Preference multiplied by
the number of shares of Preferred Stock redeemed on such date. The provisions of
this paragraph 7 shall apply to all certificates representing Preferred Stock
whether or not all such certificates have been surrendered to the Corporation.
2. Purchase Upon a Change of Control.
(a) Upon the occurrence of a Change of Control, the
Corporation shall notify the transfer agent for the Preferred Stock in writing
thereof, if any, and shall make a Change of Control Offer on the terms set forth
in this paragraph 8. The Change of Control Offer shall be made in compliance
with all applicable laws, including, without limitation (if applicable),
Regulation 14E and 14D under the Exchange Act and the rules thereunder and all
other applicable Federal and state securities laws. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this paragraph 8, the Corporation shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this paragraph 8 by virtue thereof.
(b) Within thirty days following any Change of Control, the Corporation shall
commence the Change of Control Offer by mailing to the transfer agent for the
Preferred Stock, if any, and each holder of shares of Preferred Stock a notice,
which shall govern the terms of the Change of Control Offer, and shall state:
(i) that the Change of Control Offer is being made pursuant to this paragraph 8
and that all shares of Preferred Stock tendered will be accepted for payment;
(i) the Change of Control Price and the Change of Control Payment Date;
(i) that any shares of Preferred Stock not tendered for payment pursuant to the
Change of Control Offer shall continue to accrue dividends and be convertible in
accordance with the terms hereof;
(i) that, unless the Corporation defaults in the payment of the Change of
Control Payment, all shares of Preferred Stock accepted for payment pursuant to
the Change of Control Offer shall cease to accrue dividends on the Change of
Control Payment Date;
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(i) that any holder electing to have certificates representing shares of
Preferred Stock purchased pursuant to a Change of Control Offer shall be
required to surrender such certificates representing shares of Preferred Stock
to the Corporation or its designated agent at the address specified in the
notice prior to the close of business on the Change of Control Payment Date;
(i) that any holder of a share of Preferred Stock shall be entitled to withdraw
such election if the Corporation or its designated agent receives, not later
than the close of business on the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the holder of
such shares of Preferred Stock, the number of shares of Preferred Stock such
holder delivered for purchase, and a statement that such holder is withdrawing
its election to have such shares of Preferred Stock purchased;
(i) that a holder whose shares of Preferred Stock are being purchased only in
part shall be issued new shares of Preferred Stocks for the unpurchased shares
of Preferred Stock represented by any certificate surrendered;
(i) the instructions that holders must follow in order to tender their
shares of Preferred Stock; and
(i) the circumstances and relevant facts regarding such Change of Control.
(b) On the Change of Control Payment Date, the Corporation shall, to the extent
of funds legally available therefor and otherwise lawful, (i) accept for payment
the shares of Preferred Stock tendered and not withdrawn pursuant to the Change
of Control Offer, and (ii) deposit with a paying agent an amount equal to the
Change of Control Payment in respect of all shares of Preferred Stock so
tendered and not withdrawn. Such paying agent shall promptly mail to each holder
of shares of Preferred Stock so accepted payment in an amount equal to the
purchase price for such shares, and the unpurchased shares of Preferred Stock
surrendered, if any.
(b) The Corporation shall make a public announcement of the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(b) The Corporation shall not be required to make a Change of Control Offer upon
a Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this paragraph 8 and purchases all shares of Preferred Stock validly tendered
and not withdrawn under such Change of Control Offer.
2. Exclusion of Other Rights. Except as may otherwise be required by law, the
shares of Preferred Stock shall not have any preferences or relative,
participating, optional or other special rights, other than those specifically
set forth in this resolution (as such resolution may be amended from time to
time) and in the Corporation's certificate of incorporation. The shares of
Preferred Stock shall have no preemptive or subscription rights.
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2. Headings of Subdivisions. The headings of the various subdivisions hereof are
for convenience of reference only and shall not affect the interpretation of any
of the provisions hereof.
2. Severability of Provisions. If any right, preference or limitation of the
Preferred Stock set forth in this resolution (as such resolution may be amended
from time to time) is invalid, unlawful or incapable of being enforced by reason
of any rule of law or public policy, all other rights, preferences and
limitations set forth in this resolution (as so amended) which can be given
effect without the invalid, unlawful or unenforceable right, preference or
limitation shall, nevertheless, remain in full force and effect, and no right,
preference or limitation herein set forth shall be deemed dependent upon any
other such right, preference or limitation unless so expressed herein.
2. Status of Reacquired Shares. Shares of Preferred Stock which have been issued
and reacquired in any manner shall (upon compliance with any applicable
provisions of the laws of the State of Delaware) have the status of authorized
and unissued shares of preferred stock undesignated as to series and may,
subject to subparagraph 6(c)(i), be redesignated and reissued.
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IN WITNESS WHEREOF, we have executed and subscribed this Certificate of
Designation and affirm the foregoing as true this _______ day of July, 1999.
ALLIED WASTE INDUSTRIES, INC.
By:
Name: Thomas H. Van Weelden
Title: Chairman of the Board of Directors,
President and Chief Executive Officer
ATTEST:
By: _________________________________
Steve M. Helm
Vice President-Legal and Secretary
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CERTIFICATE OF DESIGNATION
OF SERIES B JUNIOR
PREFERRED STOCK
OF
ALLIED WASTE INDUSTRIES, INC.
Pursuant to Section 151 of the Delaware General Corporation Law,
We, Thomas H. Van Weelden, Chairman of the Board, President and
Chief Executive Officer, and Steven Helm, Secretary, of Allied Waste
Industries, Inc. (the "Corporation"), a corporation organized and existing under
the Delaware General Corporation Law, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Amended Certificate of Incorporation of the Corporation, as
amended, the Board of Directors on July 27, 1999 adopted the following
resolution creating a series of 10,000 shares of Preferred Stock, par value $.10
per share, designated as Series B Junior Preferred Stock:
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority
vested in the Board of Directors of this Corporation in accordance with the
provisions of its Amended Certificate of Incorporation, as amended, a series of
Preferred Stock, par value $.10 per share, of the Corporation be and it hereby
is created, and that the designation and amount and relative rights, limitations
and preferences thereof are as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series B Junior Preferred Stock" (the "Series B
Preferred Stock"); the number of shares constituting such series shall be ten
thousand (10,000). Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series B Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation into
Series B Preferred Stock.
Section 2. Preference. The preferences of shares of Series B
Preferred Stock with respect to dividend payments or distributions upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, as the case may be, will be in every respect junior, and
subordinate to preferences of every other share of any other series of preferred
stock of the Corporation from time to time outstanding other than any series
which by its terms is not senior, prior and superior to the preferences of the
Series B Preferred Stock.
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Section 3. Dividends. (a) Whenever the Corporation shall declare
a dividend on shares of Common Stock, par value $.01 per share, of the
Corporation (the "Common Stock"), following the first date of issuance of any
shares of Series B Preferred Stock, the Corporation shall at the same time
declare a dividend on shares of Series B Preferred Stock in a per share amount
equal to the greater of (i) $100.00 and (ii) the Adjustment Number (as defined
in Section 6) times the aggregate per share amount of cash and/or the per share
amount (payable in kind) of all noncash dividends or other distributions
declared on each share of Common Stock, other than a dividend payable in shares
of Common Stock (by reclassification or otherwise), payable at the same time as
any such dividend on the Common Stock. The declaration date, the record date and
the payment date for any such dividends or other distributions on the Series B
Preferred Stock shall be the same as those for the Common Stock. No other
dividends shall be required to be paid on shares of the Series B Preferred
Stock.
(b) If, at any time when shares of Series B Preferred Stock are
outstanding, the Corporation shall repurchase or offer to repurchase shares of
Common Stock, then the Corporation shall offer to repurchase shares of Series B
Preferred stock in such amounts which are in the same proportion to the amount
of Common Stock repurchased or offered to be repurchased as the number of then
outstanding shares of Series B Preferred Stock bears to the number of then
outstanding shares of Common Stock and at such per share prices as are equal to
the Adjustment Number times the per share amount offered to or paid to the
holders of Common Stock.
Section 4. Voting Rights. In addition to any voting rights to
which holders of shares of Series B Preferred Stock may be entitled under
applicable law, the holders of shares of Series B Preferred Stock shall have the
following voting rights:
(A) Each share of Series B Preferred Stock shall entitle the
holder thereof to a number of votes on all matters submitted to a vote of the
holders of shares of Common Stock equal to the Adjustment Number.
(B) Except as otherwise provided herein or by law, the holders
of shares of Series B Preferred Stock and the holders of shares of Common Stock
shall vote together as one class, and not as a separate class, on all matters
submitted to a vote of stockholders of the Corporation.
(C) The holders of shares of Series B Preferred Stock, voting
separately as a class, shall (unless such directors have been elected by the
holders of the Series A Senior Convertible Preferred Stock, par value $.01 per
share, of the Corporation) have the right to elect the number of directors of
the Corporation who are entitled to be elected pursuant to the Second Amended
and Restated Shareholders Agreement, dated as of July 30, 1999, by and among the
Corporation and the investors named therein, as such agreement may be amended
from time to time.
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(D) Without the consent of the holders of at least a majority
of the shares of Series B Preferred Stock then outstanding, given in writing or
by vote at a meeting of stockholders called for such purpose, amend, alter or
repeal any provision of, or add any provision to, the Corporation's certificate
of incorporation or by-laws (by merger or otherwise) if such action would alter
or change the powers, preferences, or special rights of the Series B Preferred
Stock so as to affect them adversely, or increase or decrease (below the number
of shares then outstanding plus the number of shares reserved for issuance upon
the exercise of outstanding options, rights or warrants or upon the conversion
of all outstanding securities issued by the Corporation, including, without
limitation, the outstanding shares of Series A Convertible Preferred Stock) the
number of shares of Series B Preferred Stock authorized hereby.
Except as set forth herein, holders of Series B Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for the taking of any corporate action.
Section 5. Certain Restrictions. (a) If at any time any dividend
on any Series B Preferred Stock shall not have been declared and paid in cash or
in kind as provided in Section 3 hereof, the occurrence of such contingency
shall mark the beginning of a period (herein called a "default period") which
shall extend until such time as all accrued but unpaid dividends have been
declared and paid in full as provided in Section 3 above.
(b) During and until the expiration of a default period, the
Corporation shall not declare or pay dividends or make any other distributions
on, or redeem or purchase or otherwise acquire for consideration, any shares (or
any rights or warrants to purchase such shares) of any other capital stock of
the Corporation ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with, or junior to, the Series B Preferred Stock.
(c) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with, or junior to, the Series B
Preferred Stock unless the Corporation could, under paragraph (b) of this
Section 5, purchase or otherwise acquire such shares at such time and in such
manner.
Section 6. Liquidation, Dissolution or Winding Up. (a) Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of any other
capital stock of the Corporation junior to the shares of Series B Preferred
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Stock unless, prior thereto, the holders of shares of Series B Preferred Stock
shall have received $100.00 per share (the "Liquidation Preference"), plus all
accrued but unpaid dividends thereon, whether or not earned, to the date fixed
for liquidation, dissolution or winding up. Following the payment of the full
amount of the Liquidation Preference, plus accrued but unpaid dividends, no
additional distributions shall be made to the holders of shares of Series B
Preferred Stock until and unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common Catch-up") equal to
the quotient obtained by dividing (i) the Liquidation Preference by (ii) the
Adjustment Number. Following the payment of the full amount of the Liquidation
Preference and the Common Catch-up in respect of all outstanding shares of
Series B Preferred Stock and Common Stock, respectively, holders of shares of
Series B Preferred Stock and holders of shares of Common Stock shall receive
their ratable and proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to 1 with respect to such shares of Series
B Preferred Stock and Common Stock, on a per share basis, respectively.
(b) If there are not sufficient assets available to permit
payment in full of the Liquidation Preference and the liquidation preferences of
all other series of preferred stock, if any, which rank on a parity with the
Series B Preferred Stock, then such remaining assets shall be distributed
ratably to the holders of the Series B Preferred Stock and such parity shares in
proportion to their respective liquidation preferences. If there are not
sufficient assets available to permit payment in full of the Common Catch-up,
then such remaining assets shall be distributed ratably to the holders of Common
Stock.
(c) "Adjustment Number" shall mean 10,000; provided, that if
the Corporation shall at any time after July 30, 1999 (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock (by stock split, reclassification or otherwise), or
(iii) combine the outstanding Common Stock into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case the shares
of Series B Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share equal to the Adjustment Number times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is changed or exchanged.
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Section 8. Conversion. (a) Immediately upon receipt of the
Stockholder Approval (as hereinafter defined), each outstanding share of Series
B Preferred Stock shall automatically be converted into a number of fully paid,
non-assessable shares of Common Stock equal to the Adjustment Number, without
any further action of the holder of such shares and thereafter the holder shall
have no rights as a holder of Series B Preferred Stock and no other rights
against, or with respect to, the Corporation except (i) dividends accrued with
respect to the Series B Preferred Stock prior to receipt of the Stockholder
Approval and (ii) as a holder of the shares of Common Stock into which the
Series B Preferred Stock has been converted and the right to receive
certificates representing such shares of Common Stock. Upon surrender of
certificates which previously had represented such shares of Series B Preferred
Stock in accordance with paragraph (b) of this Section 8, the Corporation shall
deliver or cause to be delivered to such holder certificates representing such
shares of Common Stock. (In no event shall the Corporation be required to issue
fractional shares of Common Stock in connection with any conversion and, in lieu
thereof, the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to that fractional interest of a share
multiplied by (a) if the Common Stock is publicly traded on any national
securities exchange, the average of the daily closing prices per share of Common
Stock during the Measurement Period (as defined below) as reported (absent
manifest error) in The Wall Street Journal, (b) if the Common Stock is not
publicly traded on any national securities exchange, but traded
over-the-counter, the average of the daily closing reported bid and asked prices
of the Common Stock during the Measurement Period, as reported by Nasdaq or any
comparable system (or if not so reported by Nasdaq or any comparable system, as
furnished by two members of the National Association of Securities Dealers, Inc.
selected from time to time by the Corporation for that purpose), or (c) if the
Common Stock is not traded in such manner that the quotations referred to above
are available for the Measurement Period, the fair market value of one share of
Common Stock as determined in good faith by the Board of Directors. "Measurement
Period" means, as of any date, the twenty consecutive trading days ending two
trading days before such date. In lieu of paying cash on account of any
fractional interests, the Corporation may, at its option, cause an agent to
aggregate all fractional share interests and sell such aggregated number of
shares on the open market in regular way brokerage transactions and cause the
aggregate net proceeds (with all costs of sale and brokerage commissions
deducted from the gross proceeds of such sale) to be paid pro rata to each
person who otherwise would be entitled to receive cash in lieu of a fractional
share interest).
(b) Upon the surrender of the certificate or certificates which
previously had represented shares of Series B Preferred Stock at any time
following the conversion of shares of Series B Preferred Stock into shares of
Common Stock at the principal office of the Corporation (or such other office or
agency of the Corporation as the Corporation may designate by notice in writing
to the holder or holders of the Series B Preferred Stock) at any time during
normal business hours, the holder of such certificates shall be entitled to
receive from the Corporation a certificate or certificates representing the
shares of Common Stock into which the Series B Preferred Stock previously
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represented by the surrendered certificates has been converted. Whether or not
such certificates are surrendered, such conversion will be deemed to have been
effected as of the close of business on the date on which Stockholder Approval
has been obtained, and, except as set forth above, at such time the rights of
the holder of the converted Series B Preferred Stock as such holder will cease
and the person or persons in whose name or names the certificate or certificates
for such Series B Preferred Stock had been issued upon such conversion will be
deemed to have become the holder or holders of record of the shares of Common
Stock represented thereby.
(c) As promptly as practicable after such surrender, the
Corporation will issue and deliver in accordance with the surrendering holder's
instructions the certificate or certificates for the Common Stock into which
such shares of Series B Preferred Stock have been converted.
(d) Shares of Series B Preferred Stock which are converted into
shares of Common Stock as provided herein shall not be reissued.
(e) The Corporation will at all times reserve and keep available
out of its authorized but unissued shares of Common Stock or its treasury
shares, free of preemptive rights, solely for the purpose of issue upon the
conversion of the Series B Preferred Stock as provided in this Section 8, such
number of shares of Common Stock as shall then be issuable upon the conversion
of all then outstanding shares of Series B Preferred Stock.
(f) The issuance of certificates for Common Stock upon the
conversion of Series B Preferred Stock will be made without charge to the
holders of such shares for any documentary, stamp, transfer or similar tax in
respect thereof or other cost incurred by the Corporation in connection with
such conversion and the related issuance of Common Stock issued or issuable upon
the conversion of Series B Preferred Stock. However, if any such certificate is
to be issued in a name other than that of the record holder of the share or
shares of Series B Preferred Stock converted, the person or persons requesting
the issuance thereof shall pay to the Corporation the amount of any tax which
may be payable in respect of any transfer involved in such issuance or shall
establish to the satisfaction of the Corporation that such tax has been paid.
(g) Certificates representing shares of Series B Preferred Stock
shall note the automatic conversion of shares upon the occurrence of certain
events as set forth in this Section.
(h) For purposes of this Section, "Stockholder Approval" means
any vote of the stockholders of the Company required to issue shares of Common
Stock upon the conversion of the Series B Preferred Stock under the rules of any
stock exchange or other self-regulatory authority applicable to the Corporation
or, if no such vote is required, the delivery of a written statement by the
Corporation to that effect to the record holders of the Series B Preferred
Stock.
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(i) All shares of Common Stock which may be issued upon
conversion of the shares of Series B Preferred Stock will, upon issuance by the
Corporation, be duly and validly issued, fully paid and non-assessable, not
issued in violation of any preemptive rights arising under law or contract and
free from all liens and adverse claims with respect to the issuance thereof, and
the Corporation shall take no action which will cause a contrary result.
(j) If any shares of Common Stock to be reserved for the purpose
of conversion of shares of Series B Preferred Stock require registration with or
approval of any governmental authority under any Federal or state law before
such shares may be validly issued or delivered upon conversion, then the
Corporation will in good faith and as expeditiously as possible endeavor to
secure such registration or approval, as the case may be. If, and so long as,
any shares of Common Stock into which the shares of Series B Preferred Stock are
then convertible is then listed on any national securities exchange, the
Corporation will, if permitted by the rules of such exchange, list and keep
listed on such exchange, upon official notice of issuance, all shares of such
Common Stock issuable upon conversion.
Section 9. No Redemption. The shares of Series B Preferred Stock
shall not be redeemable.
Section 10. Reacquired Shares. Any shares of Series B Preferred
Stock which shall at any time have been redeemed, purchased or otherwise
acquired by the Corporation (upon compliance with any applicable provisions of
the laws of the State of Delaware) shall have the status of authorized but
unissued shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the board of
directors.
Section 11. Fractional Shares. Series B Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holders fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series B Preferred Stock.
Section 12. Severability. If any right, preference or limitation
of the Series B Preferred Stock set forth in this resolution (as such resolution
may be amended from time to time) is invalid, unlawful or incapable of being
enforced by reason of any rule of law or public policy, all other rights,
preferences and limitations set forth in this resolution (as so amended) which
can be given effect without the invalid, unlawful or unenforceable right,
preference or limitation shall, nevertheless, remain in full force and effect,
and no right, preference or limitation herein set forth shall be deemed
dependent upon any other such right, preference or limitation unless so
expressed herein.
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IN WITNESS WHEREOF, we have executed and subscribed this
Certificate this day of July, 1999.
------------------------------------
Chairman of the Board, President
and Chief Executive Officer
Attest:
- ----------------------
Secretary
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SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE, dated as of July 30, 1999 (this "Supplemental
Indenture"), among ALLIED WASTE NORTH AMERICA, INC., a corporation duly
organized and existing under the laws of the State of Delaware (the "Company"),
having its principal office at 15880 North Greenway-Hayden Loop, Suite 100,
Scottsdale, Arizona 85260, each of the GUARANTORS signatory hereto and U.S. BANK
TRUST NATIONAL ASSOCIATION, a national banking association, as Trustee (the
"Trustee").
WITNESSETH:
WHEREAS, the Company, the Guarantors and the Trustee executed and
delivered an Indenture, dated as of July 30, 1999 (the "Indenture"), to provide
for the issuance by the Company from time to time of debt securities evidencing
its unsecured indebtedness;
WHEREAS, pursuant to Board Resolution (the "Resolutions"), the Company
has authorized the issuance of $2,000,000,000 of its 10% Series A Senior
Subordinated Notes Due 2009 (the "Series A Notes") and $2,000,000,000 of its 10%
Series B Senior Subordinated Notes Due 2009 (the "Series B Notes" and together
with the Series A Notes, the "Notes"); and
WHEREAS, the Company, the Guarantors and certain other parties named on
the signature page thereof entered into a Registration Rights Agreement dated as
of the date hereof (as such agreement may be amended, modified or supplemented
from time to time, the "Registration Rights Agreement") which contemplates (i)
the registration with the Securities and Exchange Commission (the "SEC") of the
issuance of the Series B Notes and (ii) the consummation of an Exchange Offer
(defined below) whereby the Series A Notes may be exchanged for Series B Notes;
and
WHEREAS, the Company desires to establish the terms of the Notes in
accordance with Section 3.1 of the Indenture and to establish the form of the
Notes in accordance with Section 2.1 of the Indenture.
ARTICLE I.
TERMS
SECTION 1.01. TERMS OF NOTES. The following terms relating to the
Notes are hereby established:
(1) The Series A Notes shall constitute a series of Securities having
the title "10% Series A Senior Subordinated Notes Due 2009." The Series B Notes
shall constitute a series of Securities having the title "10% Series B Senior
Subordinated Notes Due 2009."
(2) The aggregate principal amount of the Series A Notes that may be
authenticated and delivered under the Indenture (except for Series A Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Series A Notes pursuant to Sections 3.4, 3.5, 3.6, 8.6
or 11.7 of the Indenture or any Securities that, pursuant to Section 3.3, are
deemed never to have been authenticated or delivered thereunder) shall be up to
$2,000,000,000. The aggregate principal amount of the Series B Notes that may be
authenticated and delivered under the Indenture (except for Series B Notes
authenticated and delivered upon registration of transfer of or in exchange for
or in lieu of, other Series B Notes pursuant to Sections 3.4, 3.5, 3.6, 8.6 or
11.7 of the Indenture or any Securities that, pursuant to Section 3.3, are
deemed never to have been authenticated or delivered thereunder) shall be up to
$2,000,000,000.
(3) The entire outstanding principal of the Notes shall be payable on
August 1, 2009 (the "Stated Maturity Date").
(4) The rate at which the Notes shall bear interest shall be 10%; (a)
with respect to the Series A Notes, interest shall accrue from the date hereof;
(b) with respect to the Series B Notes, the date from which interest shall
accrue shall be the date on which interest was most recently paid on the Series
A Notes, or if there has been no Interest Payment Date relating to the Series A
Notes prior to the issuance of the Series B Notes, interest shall accrue from
the date hereof; (c) the Interest Payment Dates for the Notes on which interest
will be payable shall be May 1 and November 1 of each year, beginning November
1, 1999; the Regular Record Dates for the interest payable on the Notes on any
Interest Payment Date shall be April 15 with respect to the May 1 Interest
Payment Date and October 15 with respect to the November 1 Interest Payment
Date; (d) interest on overdue principal and premium, if any, from time to time,
shall be at a rate of 2% per annum in excess of the rate then in effect;
interest on overdue installments of interest and Special Interest, if any, from
time to time, shall be at the same rate, to the extent lawful; and the basis
upon which interest shall be calculated shall be that of a 360-day year
consisting of twelve 30-day months.
(5) The place where the principal of (and premium, if any) and
interest, including Special Interest, if any, with respect to and interest on
the Notes shall be payable and Notes may be surrendered for the registration of
transfer or exchange shall be the Corporate Trust Office of the Trustee which,
as of this writing, is located at 100 Wall Street, 20th Floor, New York, New
York 10005, Attention: Corporate Trust Administration. The place where notices
or demands to or upon the Company in respect of the Notes and the Indenture may
be served shall be the Corporate Trust Office of the Trustee. In addition,
payment of interest (including any Special Interest) on any Note may, at the
option of the Company, be made by check mailed to the address of the Person in
whose name the Note is registered at the close of business on the Regular
Payment Date; provided, however, that all payments of principal, and premium
(including Special Interest, if any), if any, and interest on the Notes to
Holders of which have given wire instructions to the Company or the Paying Agent
at least 10 Business Days prior to the applicable payment date shall be made by
wire transfer to an account maintained by such Holder entitled thereto as
specified by such Holder in the instructions.
(6) Prior to August 1, 2004, the Notes will be subject to redemption,
at the option of the Company, in whole or in part, at any time, upon not less
than 30 not more than 60 days' notice mailed to each Holder of Notes to be
redeemed at such Holder's address appearing in the register of Holders in
amounts of $1,000 or an integral multiple of $1,000, at a redemption price equal
to the greater of (1) 100% of their principal amount or (2) the sum of the
present values of the remaining scheduled payments of principal and interest
thereon discounted to maturity on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Yield plus 50 basis points,
plus in each case accrued but unpaid interest (including Special Interest) to
but excluding the Redemption Date (subject to the right of Holders of record on
the relevant Regular Record Date to receive interest due on an Interest Payment
Date that is on or prior to the Redemption Date).
Prior to August 1, 2002, the Company may redeem up to 331/3% in
aggregate principal amount of the Notes originally issued under the Indenture at
a redemption price equal to 110% of the principal amount of the Notes redeemed,
together with accrued but unpaid interest (including Special Interest) to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest Payment Date that is
on or prior to the Redemption Date) with the net proceeds of one or more Public
Offerings of Capital Stock (other than Redeemable Interests); 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.
On or after August 1, 2004, the Notes shall 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
Notes to be redeemed at such Holder's address appearing in the register of
Holders, in amounts of $1,000 or an integral multiple of $1,000, at the
following Redemption Prices, expressed as percentages of principal amount, plus
accrued but unpaid interest (including Special Interest) to but excluding the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest Payment Date that is
on or prior to the Redemption Date), if redeemed during the twelve-month period
beginning on August 1, of each of the years indicated below:
Year Percentage
2004..........................................................105.000
2005..........................................................103.3333
2006..........................................................101.6667
2007 and thereafter...........................................100.000%
(7) Except as set forth in this Supplemental Indenture, the Notes shall
not be redeemable at the option of any Holder thereof, upon the occurrence of
any particular circumstances or otherwise. The Notes will not have the benefit
of any mandatory redemption or sinking fund.
(8) The Notes shall be issuable in denominations of $1,000.
(9) Payments of the principal of, Special Interest, if any, with
respect to and interest on the Notes shall be made in U.S. Dollars, and the
Notes shall be denominated in U.S. Dollars.
(10) The Trustee shall also be the Security Registrar and Paying Agent.
(11) The entire outstanding principal amount of and any accrued
interest, if any, on Notes shall be payable upon declaration of acceleration of
the maturity thereof pursuant to Article 5 of the Indenture.
(12) The Notes will be payable on the Stated Maturity Date in an amount
equal to the principal amount thereof, Special Interest, if any, plus any
accrued and unpaid interest accrued to the Stated Maturity Date.
(13) There shall be the following additions to the covenants set forth
in the Indenture with respect to the Notes, which shall be effective only for so
long as any of the Notes are Outstanding:
(a) Asset Dispositions.
The Company shall not make, and shall not permit any Restricted
Subsidiary to make, any Asset Disposition unless: (i) the Company (or
such Restricted Subsidiary, as the case may be) receives consideration
at the time of such disposition at least equal to the fair market value
of the shares or the assets disposed of, as determined in good faith by
its Board of Directors for any transaction or series of transactions
involving in excess of $25 million and not involving the 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 Restricted 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 Restricted Subsidiaries as such business is conducted
immediately prior to such Asset Disposition, (x) any securities, notes
or other obligations received by the Company or any such Restricted
Subsidiary from such transferee that are contemporaneously (subject to
ordinary settlement periods) converted by the Company or such
Restricted Subsidiary into cash or Cash Equivalents (to the extent of
cash and Cash Equivalents received), (y) any Designated Noncash
Consideration received pursuant to this clause (y) that is at the time
outstanding, not to exceed 15% of Consolidated Total Assets at the time
of the receipt of such Designated Noncash Consideration (with the fair
market value of each item of Designated Noncash Consideration being
measured at the time received and without giving effect to subsequent
changes in value), or (z) 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 in such Asset
Disposition) are applied by the Company or a Restricted Subsidiary as
follows (A) first, within one year from the later of the date of such
Asset Disposition or the receipt of such Net Available Proceeds, to
Senior Debt of the Company or its Restricted Subsidiaries then
outstanding that would require such application or which would prohibit
payments pursuant to Clause (B) below or Tranche D Term Loans; (B)
second, to the extent Net Available Proceeds are not required to be
applied as specified in Clause (A) above, to purchases of outstanding
Notes pursuant to an Offer to Purchase (to the extent such an offer is
not prohibited by the terms of the Bank Agreement then in effect) at a
purchase price equal to 100% of their principal amount plus accrued
interest to the date of purchase (subject to the rights of Holders of
record on the relevant Regular Record Date to receive interest due on
an Interest Payment Date that is on or prior to the purchase date); and
(C) third, to the extent of any remaining Net Available Proceeds
following completion of such Offer to Purchase, to any other use as
determined by the Company that is not otherwise prohibited by the
Indenture; provided further that the 75% limitation referred to in
clause (ii) above will not apply to any Asset Disposition if the
consideration received from the Asset Disposition, as determined in
good faith by the Company's Board of Directors, is equal to or greater
than what the after-tax proceeds would have been had the Asset
Disposition complied with the aforementioned 75% limitation.
Notwithstanding the foregoing, the Company shall not be required
to comply with the provisions described in Clause (iii) of the
preceding paragraph (i) if the Net Available Proceeds are invested or
committed to be 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 Restricted Subsidiaries as such business is conducted prior
to such Asset Disposition (determined by the Board of Directors in good
faith) or (ii) to the extent the Company elects to redeem the Notes
with the Net Available Proceeds pursuant to any of the provisions of
Subsection (6) of this Supplemental Indenture of the Notes.
Notwithstanding the foregoing, the Company shall 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.
The Company shall mail the Offer Document for an Offer to
Purchase required pursuant to this subsection 13(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 this subsection
13(a) or the receipt of the Net Available Proceeds from such Asset
Disposition. The aggregate principal amount of the Notes 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 this subsection 13(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 Notes owned by such Holder pursuant to
the Offer to Purchase, subject to the requirement that any portion of a
Note tendered must be tendered in an integral multiple of $1,000
principal amount.
(b) 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 shall commence an Offer to Purchase all
Outstanding Notes, at a purchase price equal to 101% of their aggregate
principal amount plus accrued interest, if any, 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).
A "Change of Control" shall be deemed to have occurred in the
event that, after the date of this Supplemental Indenture, (i) so long
as the Company is a Subsidiary of AWI, (a) any Person, or any Persons
(other than a Permitted AWI Successor, as defined below), acting
together that would constitute a "group" (an "Group") for purposes of
Section 13(d) of the Exchange Act (an "AWI Group"), 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 AWI, (b) any Person or AWI Group,
together with any Affiliates or Related Persons thereof, succeeds in
having sufficient of its nominees that not been approved by the
Continuing Directors elected to the Board of Directors of AWI such that
such nominees, when added to any existing director remaining on the
Board of Directors of AWI after such election that is an Affiliate or
Related Person of such Person or AWI Group, shall constitute a majority
of the Board of Directors of AWI or (c) there occurs any transaction or
series of related transactions (other than a merger, consolidation or
other transaction with a Related Business in which the shareholders of
AWI immediately prior to such transaction (or series) receive (I)
solely Voting Stock of AWI (or its successor or parent, as the case may
be), (II) cash, securities and other property in an amount which could
be paid by the Company as a Restricted Payment under this Supplemental
Indenture after giving pro forma effect to such transaction, or (III) a
combination of (I) and (II), and the beneficial owners of the Voting
Stock of AWI 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 AWI (or in the case of a transaction (or
series) in which another entity becomes a successor to, or parent of,
AWI, of the successor or parent entity), (ii) if the Company is not a
Subsidiary of AWI, (a) any Person, or any Persons (other than a
Permitted Company Successor, as defined below), acting together that
would constitute a "group" for purposes of Section 13(d) of the
Exchange Act (an "Allied Group"), 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, (b) any Person or Allied Group,
together with any Affiliates or Related Persons thereof, succeeds in
having sufficient of its nominees who have not been approved by the
Continuing Directors 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 Allied Group, shall
constitute a majority of the Board of Directors of the Company or, (c)
there occurs any transaction or series of related transactions other
than a merger, consolidation or other transaction with a Related
Business in which the shareholders of the Company immediately prior to
such transaction (or series) receive (I) solely Voting Stock of the
Company (or its successor or parent, as the case may be), (II) cash,
securities and other property in an amount which could be paid by the
Company as a Restricted Payment under this Supplemental Indenture after
giving pro forma effect to such transaction or (III) a combination of
(I) and (II), 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.
A "Permitted AWI Successor" means (i) an issuer, other than AWI,
of Voting Securities issued to the shareholders of AWI in a merger,
consolidation or other transaction permitted by clause (i)(c) of the
definition of Change of Control, (ii) Apollo and (iii) Blackstone.
A "Permitted Company Successor" means an issuer, other than the
Company, of Voting Securities issued to the shareholders of the Company
in a merger, consolidation or other transaction permitted by clause
(ii)(c) of the definition of Change of Control.
The Company shall 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 Notes resulting from a Change of
Control.
Prior to complying with any of the provisions of this subsection
13(b), but in any event within 90 days following a Change of Control,
the Company shall either repay all outstanding Senior Debt or obtain
the requisite consents, if any, under all agreements governing
outstanding Senior Debt to permit the repurchase of Notes required by
this covenant. The Company shall publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Purchase
Date.
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
Notes 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
9.3 of the Indenture) money sufficient to pay the Purchase Price of all
Notes or portions thereof so accepted and (iii) deliver or cause to be
delivered to the Trustee all Notes so accepted together with an
Officers' Certificate stating the Notes 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 Notes so accepted
payment in an amount equal to the Purchase Price for each $1,000 of
Notes so accepted, and the Company shall promptly execute a new Note or
Notes equal in principal amount to any unpurchased portion of the Note
surrendered as requested by the Holder, and the Guarantors shall
promptly execute their Guarantees to be endorsed thereon, and
thereafter the Trustee shall promptly authenticate and mail or deliver
to such Holders such new Note or Notes. Any Note 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) Limitation on Consolidated Debt.
The Company shall not incur any Debt and shall not permit 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 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 preceding limitations, the Company or any
Restricted Subsidiary of the Company may Incur the following Debt:
(i) Debt under the Bank Agreement in an aggregate
principal amount at any one time outstanding not to exceed the
amount permitted to be borrowed thereunder;
(ii) Debt evidenced by the Notes and the Guarantees;
(iii) 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 (iii) 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;
(iv) Debt outstanding on the date of this Supplemental
Indenture;
(v) Debt incurred in connection with an acquisition,
merger or consolidation transaction permitted under the
provisions of the Indenture described under Section 7.1 of the
Indenture (as superseded by subsection 15 of this Section 1.01
of this Supplemental Indenture), which Debt (A) was issued by a
Person prior to the time such Person becomes a Restricted
Subsidiary in such transaction, including by way of merger of
consolidation with the Company or another Restricted Subsidiary,
and was not issued in contemplation of such transaction or (B)
is issued by the Company or a Restricted Subsidiary to a seller
in connection with such transaction, in an aggregate amount for
all such Debt issued pursuant to the provisions of this
Supplemental Indenture described under this Clause (v) and then
outstanding does not exceed 7.5% of the Consolidated Total
Assets of the Company at the time of such Incurrence;
(vi) Debt consisting of Permitted Interest Rate or
Currency Protection Agreements;
(vii) Debt Incurred to renew, extend, refinance or
refund any outstanding Debt permitted in the preceding paragraph
or in Clauses (i) through (v) above or Incurred pursuant to this
clause (vii); provided, however, that such Debt does not exceed
the principal amount of Debt so renewed, extended, refinanced or
refunded (plus the amount of any premium and accrued interest,
plus customary fees, consent payments, expenses and costs
relating to the Debt so renewed, extended, refinanced or
refunded); and
(viii) Debt not otherwise permitted to be Incurred
pursuant to clauses (i) through (vii) above, which, in aggregate
amount, together with the aggregate amount of all other Debt
previously Incurred pursuant to the provisions of this Clause
(viii) and then outstanding, does not exceed 7.5% of the
Consolidated Total Assets of the Company at the time of such
Incurrence.
(d) 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
or any Restricted Subsidiary or to the holders thereof in their
capacity as such (excluding (a) any dividends or distributions 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), (b) dividends or distributions by a Restricted Subsidiary
to the Company or another Wholly Owned Restricted Subsidiary and (c)
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) of this
clause (ii), 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 that
is subordinate in right of payment to the Notes (each of the
transactions described in Clauses (i) through (iv) being a "Restricted
Payment"), if:
(1) a Default or an Event of Default shall have
occurred and be continuing; or
(2) the Company would, at the time of such Restricted
Payment and after giving pro forma effect to such Restricted
Payment as if it 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 set forth in the
first paragraph under subsection 13(c) of this Section 1.01 of
this Supplemental Indenture; or
(3) upon giving effect to such Restricted Payment, the
aggregate of all Restricted Payments (excluding Restricted
Payments permitted by Clauses (ii), (iii), (iv), (v) and (vii)
of the next succeeding paragraph) from the date of this
Supplemental Indenture (the amount so expended, if other than in
cash, determined in good faith by the Board of Directors)
exceeds the sum, without duplication, of: (a) 50% of the
aggregate Consolidated Net Income (or, in case Consolidated Net
Income shall be negative, less 100% of such deficit) for the
period (taken as one accounting period) from the beginning of
the first fiscal quarter commencing after the date of this
Supplemental Indenture to the end of the Company's most recently
ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment; (b) 100% of
the aggregate net cash proceeds from the issuance and sale to
AWI of Capital Stock (other than Redeemable Interests) of the
Company and options, warrants or other rights to acquire Capital
Stock (other than Redeemable Interests and Debt convertible into
Capital Stock) of the Company and the principal amount of Debt
and Redeemable Interests of the Company that has been converted
into Capital Stock (other than Redeemable Interests) of the
Company after the date of this Supplemental Indenture, provided
that any such net proceeds received by the Company from an
employee stock ownership plan financed by loans from the Company
or a Subsidiary of the Company shall be included only to the
extent such loans have been repaid with cash on or prior to the
date of determination; (c) 50% of any dividends received by the
Company or a Wholly Owned Restricted Subsidiary after the date
of this Supplemental Indenture from an Unrestricted Subsidiary
of the Company; and (d) $300 million.
The preceding provisions shall not prohibit:
(i) the payment of any dividend within 60 days after
declaration of such dividend if at the declaration date such
payment would have complied with this covenant;
(ii) any refinancing or refunding of Debt permitted if
such refinancing or refunding is permitted pursuant to clause
(vii) of the second paragraph under subsection 13(c) of this
Section 1.01 of this Supplemental Indenture;
(iii) the purchase, redemption or other acquisition or
retirement for value of any Debt or Capital Stock of the Company
or any options, warrants or rights to purchase or acquire shares
of Capital Stock of the Company in exchange for, or out of the
net cash proceeds of, the substantially concurrent issuance or
sale (other than to a Restricted Subsidiary of the Company) of
Capital Stock (other than Redeemable Interests) of the Company;
provided that the amount of any such net cash proceeds that are
utilized for any such purchase, redemption or other acquisition
or retirement for value shall be excluded from Clause (3)(b) in
the preceding paragraph of this subsection 13(d);
(iv) the repurchase, redemption, defeasance,
retirement, refinancing or acquisition for value or payment of
principal of any subordinated Debt or Capital Stock through the
issuance of new subordinated Debt or Capital Stock of the
Company;
(v) the purchase or redemption of any Debt from Net
Available Proceeds to the extent permitted under subsection
13(a) of this Section 1.01 of this Supplemental Indenture;
(vi) payments pursuant to the Intercompany Agreements;
and
(vii) so long as no default or Event of Default has
occurred or is continuing, the payment of cash dividends on the
Senior Convertible Preferred Stock outstanding on the date of
this Supplemental Indenture or issued as dividends thereon to
the extent not prohibited by the Bank Agreement in effect from
time to time.
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 shall 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 of
this subsection 13(d) of this Supplemental Indenture.
(e) Dividend and Other Payment Restrictions Affecting
Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, suffer to exist any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary: (i) to pay,
directly or indirectly, dividends or make any other distributions in
respect to 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.
The preceding restrictions shall not apply to any encumbrance or
restriction existing pursuant to: (a) the Notes, the Indenture
(including this Supplemental Indenture), the Guarantees or any other
agreement in effect on the date of this Supplemental Indenture, (b) the
Bank Agreement, including any Guarantees of or Liens securing the Debt
Incurred thereunder, (c) an agreement relating to any Debt Incurred by
such Subsidiary prior to the date on which such Subsidiary was acquired
by the Company and outstanding on such date and not incurred in
anticipation of becoming a Subsidiary, (d) an agreement which has been
entered into for the pending sale or disposition of all or
substantially all of the Capital Stock, other ownership interests or
assets of such Subsidiary, provided that such restriction terminates
upon consummation or abandonment of such disposition and upon
termination of such agreement, (e) customary non-assignment provisions
in leases and other agreements entered into in the ordinary course of
business, (f) any security agreement (including a capital lease)
securing Debt permitted to be Incurred under this Supplemental
Indenture that impose restrictions of the nature described in Clause
(iii) above on the property subject to the Lien of such security
agreement, (g) an agreement effecting a renewal, extension, refinancing
or refunding of Debt incurred pursuant to an agreement referred to in
Clause (a), (b) or (f) of this paragraph; 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; or (h) applicable corporate law or regulation relating to
the payment of dividends or distributions.
(f) Limitation on Liens.
Each of AWI and the Company shall not, and the Company shall not
permit any of its Restricted Subsidiaries to, create, Incur, assume or
otherwise cause or suffer to exist or become effective any Lien
securing Debt that is pari passu or subordinated in right of payment to
the Notes (other than Permitted Liens) upon any of their property or
assets, now owned or hereafter acquired to secure Debt of AWI, the
Company or any of its Restricted Subsidiaries.
(g) Transactions with Affiliates and Related Persons.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend
any transaction, contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate of the Company
(each of the preceding, an "Affiliate Transaction"), unless (a) such
Affiliate Transaction is on terms that are no less favorable to the
Company or such Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (b) the Company delivers to the
Trustee, with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$50,000,000, either (i) a resolution of the Board of Directors set
forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (a) above and that such Affiliate
Transaction has been approved by a majority of the disinterested
members of the Board of Directors or (ii) an opinion as to the fairness
to the Company or such Restricted Subsidiary, as the case may be, of
such Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national standing.
The following items shall not be deemed to be Affiliate
Transactions and, therefore shall not be subject to the provisions of
the previous paragraph: (a) customary directors' fees, indemnification
or similar arrangements or any employment agreement or other
compensation plan or arrangement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business,
including ordinary course loans to employees not to exceed: (i)
$50,000,000 outstanding in the aggregate at any time and (ii)
$5,000,000 to any one employee, and consistent with the past practice
of the Company or such Restricted Subsidiary; (b) loans by the Company
and its Restricted Subsidiaries to employees of AWI or any of its
Subsidiaries in connection with management incentive plans not to
exceed $50,000,000 at any time outstanding; provided that such
limitation shall not apply to loans the proceeds of which are used to
purchase common stock of (i) the Company from the Company or (ii) AWI
from AWI if and to the extent that AWI utilizes the proceeds of such
loan to acquire Capital Stock (other than Redeemable Interests) of the
Company; (c) transactions between or among the Company and/or its
Restricted Subsidiaries; (d) payments of customary fees by the Company
or any of its Restricted Subsidiaries to investment banking firms and
financial advisors made for any financial advisory, financing,
underwriting or placement services or in respect of other investment
banking activities, including, without limitation, in connection with
acquisitions or divestitures which are approved by a majority of the
Board of Directors in good faith; (e) any agreement as in effect on the
date of this Supplemental Indenture or any amendment thereto (so long
as such amendment is not disadvantageous to the Holders of the Notes in
any material respect) or any transaction contemplated thereby; and (f)
Restricted Payments that are permitted by the provisions of subsection
13(d) of this Section 1.01 of this Supplemental Indenture.
(h) No Senior Subordinated Debt
The Company shall not incur, create, issue, assume, guarantee or
otherwise become liable for any Debt that is subordinate or junior in
right of payment to any Debt of the Company and senior in any respect
in right of payment to the Notes. No Guarantor shall incur, create,
issue, assume, guarantee or otherwise become liable for any Debt that
is subordinate or junior in right of payment to the Debt of such
Guarantor and senior in any respect in right of payment to such
Guarantor's Guarantee.
(i) Provision of Financial Information.
Whether or not AWI is required to be subject to Section 13(a) or
15(d) of the Exchange Act, or any successor provision thereto, the
Company (or AWI for so long as the Company is a Wholly-Owned Subsidiary
of AWI) shall file with the Commission the annual reports, quarterly
reports and other documents that the Company (or AWI for so long as the
Company is a Wholly-Owned Subsidiary of AWI) 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 (or AWI for so long as
the Company is a Wholly-Owned Subsidiary of AWI) were so required. Such
documents shall 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 file with the Trustee copies of the annual
reports, quarterly reports and other documents which the Company (or
AWI for so long as the Company is a Wholly-Owned Subsidiary of AWI)
filed 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 (or AWI for so long as the
Company is a Wholly-Owned Subsidiary of AWI) were required to comply
with such Sections and (b) if filing such documents by the Company (or
AWI for so long as the Company is a Wholly-Owned Subsidiary of AWI)
with the Commission is not permitted under the Exchange Act, promptly
upon written request supply copies of such documents to any prospective
Holder.
(j) Designation of Restricted and Unrestricted Subsidiaries.
The Company at any time may designate any Person that is a
Subsidiary of the Company, or that becomes a Subsidiary of the Company
after the date of this Supplemental Indenture as an "Unrestricted
Subsidiary." Upon such designation, 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. In addition, the Company may at any
time terminate the status of any Unrestricted Subsidiary as an
Unrestricted Subsidiary. Upon such termination, such Subsidiary and
each other Subsidiary of the Company, if any, of which such Subsidiary
is a Subsidiary shall be a Restricted Subsidiary.
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:
(i) 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
first paragraph of subsection 13(d) of this Section 1.01 of this
Supplemental Indenture; or
(ii) such change or other event would otherwise result
in a Default or an Event of Default.
In addition and notwithstanding the foregoing, no Restricted
Subsidiary of the Company may become an Unrestricted Subsidiary, and
the status of any Unrestricted Subsidiary as an Unrestricted Subsidiary
shall be deemed to have been immediately terminated when:
(i) such Subsidiary (A) has outstanding Debt that is
Unpermitted Debt (as defined below) 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 Guarantee of, any debt of such
Subsidiary, including any undertaking, agreement or instrument
evidencing such Debt, or (B) is directly or indirectly liable on
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 subsection 13(j)
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
described in the preceding paragraph.
"Unpermitted Debt" means any Debt of a Subsidiary of the Company
if: (x) a default under such Debt (or under any instrument or
agreement pursuant to or by which such Debt is issued, secured
or evidenced) or any right that the holders of such Debt 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.
Each Person that is or becomes a Subsidiary of the Company shall
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.
(14) (a) In addition to the Events of Default set forth in Section 5.1
of the Indenture, the Notes shall include the following additional Event of
Default designated as clause (j) of such Section, which shall be deemed an Event
of Default under Section 5.1 of the Indenture:
(j) failure to perform or comply with the provisions of Section
7.1 of the Indenture (as superseded by subsection 15 of Section 1.01
hereof) or the provisions of subsection 13(a) and 13(b) of this Section
1.01 of this Supplemental Indenture.
(b) In addition, Section 5.1 of the Indenture is further
supplemented by adding the following paragraph thereto:
"If an Event of Default occurs at any time 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 Notes pursuant to Section 11 of the Indenture and paragraph
5(b) of the Notes, then, upon acceleration of the Notes, an equivalent
premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in the Indenture or the Notes to the
contrary notwithstanding."
(15) Section 7.1 of the Indenture is hereby superseded by the
following in respect of the Notes:
The Company (i) may not consolidate with or merge into any Person; (ii)
may not permit any Person other than a Restricted Subsidiary to consolidate with
or merge into the Company; and (iii) may not, directly or indirectly, in one or
a series of transactions, transfer, convey, sell, lease or otherwise dispose of
all or substantially all of the properties and assets of the Company and its
Subsidiaries on a consolidated basis; unless, in each case of (i), (ii) and
(iii) 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 of such Subsidiary at
the time of the transaction (or series), no Default or 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 including
this Supplemental Indenture;
(3) if either (x) the Company or the successor entity would, at
the time of such transaction (or series) and after giving pro forma
effect thereto as if such transaction (or series) had occurred at the
beginning of the most recently ended four full fiscal quarter period
for which internal financial statements are available immediately
preceding the date of such transaction (or series), have been permitted
to Incur at least $1.00 of additional Debt pursuant to the Consolidated
EBITDA Coverage Ratio test set forth in the first paragraph under
subsection 13(c) of Section 1.01 hereof or (y) the Consolidated EBITDA
Coverage Ratio of the Company or the successor entity for the most
recently ended four full fiscal quarter period for which internal
financial statements are available immediately preceding the date of
such transaction (or series), calculated on a pro forma basis as if
such transaction (or series) had occurred at the beginning of such four
full fiscal quarter period, would be no less than such Consolidated
EBITDA Coverage Ratio, calculated without giving effect to such
transaction or series or any other transactions (or series) that is
subject to the provisions of this Supplemental Indenture described in
this paragraph and that occurred after the date that is twelve months
before the date of such transaction (or series);
(4) if, as a result of any such transaction, property or assets
of the Company or any Restricted Subsidiary of the Company would become
subject to a Lien prohibited by subsection 13(f) of this Section 1.01,
the Company or the successor entity will have secured the Notes as
required by such covenant; and
(5) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel as specified in the Indenture.
The Company shall deliver to the Trustee prior to the proposed
consolidation, merger, sale, transfer, lease or other disposition an Officers'
Certificate to the foregoing effect and an Opinion of Counsel stating that the
proposed consolidation, merger, sale, transfer, lease or other disposition and
such supplemental indenture comply with this Supplemental Indenture and that all
conditions precedent to the consummation of such transaction under this Section
7.1 have been met."
(16) Section 16.4 of the Indenture is hereby supplemented to include
the following as clause (d) of such Section in respect of the Notes:
"(d) In the event that any Subsidiary Guarantor ceases to be a
guarantor under, or to pledge any of its assets to secure obligations
under, the Bank Agreement, such Guarantor shall be released from all of
its obligations under its Guarantee endorsed on the Securities and
under this Article 16."
(17) The Notes shall not be issuable as Bearer Securities.
(18) Interest on any Note shall be payable only to the Person in whose
name that Note (or one or more predecessor Notes thereof) is registered at the
close of business on the Regular Record Date for such interest.
(19) Article 4 of the Indenture shall be applicable to the Notes.
(20) The Notes shall not be issuable in definitive form except under
the circumstances described in Section 2.1 of the Indenture.
(21) The Notes shall not be subordinated to any debt of the Company
other than Senior Debt, and shall constitute senior subordinated unsecured
obligations of the Company.
(22) For all purposes, the Series A Notes and the Series B Notes shall
be treated as one series of Securities under the Indenture.
(23) Section 8.2(e) of the Indenture is hereby modified and superseded
in its entirety as follows in respect of the Notes:
(e) Any amendment to, or waiver of, the provisions of Article 15
of the Indenture relating to subordination that adversely affects the
rights of the Holders of the Notes shall require the consent of the
Holders of at least 75% in aggregate principal amount of Outstanding
Notes.
(24) Article 2 of the Indenture is hereby modified and superseded as
follows in respect of the Notes:
SECTION 1.02. FORMS.
(1) Attached hereto as Exhibit A is a true and correct copy of the Form
of Note representing the Company's Notes.
(2) Attached hereto as Exhibit B is a true and correct copy of a
specimen certificate of transfer.
---------
(3) Attached hereto as Exhibit C is a true and correct copy of a
specimen certificate of exchange.
---------
(4) Attached hereto as Exhibit D is a true and correct copy of a
specimen certificate from acquiring institutional accredited investor.
(5) The form of Guarantee shall be as set forth in Section 2.3 of the
Indenture.
ARTICLE II.
TRANSFER AND EXCHANGE
Section 2.01. General. Sections 2.4, 3.2 and 3.3 of the Indenture
are hereby supplemented as follows:
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Supplemental Indenture and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Supplemental Indenture, expressly agree to such terms and provisions and to be
bound thereby. However, to the extent any provision of any Note conflicts with
the express provisions of this Supplemental Indenture, the provisions of this
Supplemental Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form shall be substantially in
the form of Exhibit A attached hereto (including the Global Note Legend thereon
and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.02 of this Supplemental
Indenture.
(c) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in Global Notes that are held by Participants through
Euroclear or Cedel Bank.
Section 2.02. Registration, Transfer and Exchange. Section 3.5
of the Indenture is hereby modified and superseded in its entirety as follows
in respect of the Notes:
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 90 days after the date of such notice from the Depositary, (ii)
the Company in its sole discretion determines that the Global Notes (in whole
but not in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee or (iii) there shall have occurred and be
continuing a Default or an Event of Default under the Indenture with respect to
the Notes. Upon the occurrence of either of the preceding events in (i), (ii) or
(iii) above, Definitive Notes shall be issued in such names as the Participants
and Indirect Participants and the Depositary shall instruct the Trustee. Global
Notes also may be exchanged or replaced, in whole or in part, as provided in
Sections 3.6 and 3.4 of the Indenture. Every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to
this Section 2.02 or Section 3.6 or 3.4 of the Indenture, shall be authenticated
and delivered in the form of, and shall be, a Global Note. A Global Note may not
be exchanged for another Note other than as provided in this Section 2.02(a),
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.02(b), (c) or (f) of this Supplemental Indenture.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Supplemental Indenture and the Applicable Procedures. Beneficial interests in
the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth in this Supplemental Indenture to the extent
required by the Securities Act. Transfers of beneficial interests in the Global
Notes also shall require compliance with either subparagraph (i) or (ii) below,
as applicable, as well as one or more of the other following subparagraphs, as
applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the Restricted
Period, transfers of beneficial interests in the Regulation S Global
Note may not be made to a U.S. Person or for the account or benefit of
a U.S. Person (other than an Initial Purchaser.) Beneficial interests
in any Unrestricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.02(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.02(b)(i) above,
the transferor of such beneficial interest must deliver to the
Registrar either (A) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be credited
with such increase or (B) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary
to the Registrar containing information regarding the Person in whose
name such Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above. Upon consummation of an Exchange
Offer by the Company in accordance with Section 2.02(f) of this
Supplemental Indenture, the requirements of this Section 2.02(b)(ii)
shall be deemed to have been satisfied upon receipt by the Registrar of
the instructions contained in the Letter of Transmittal delivered by
the Holder of such beneficial interests in the Restricted Global Notes.
Upon satisfaction of all of the requirements for transfer or exchange
of beneficial interests in Global Notes contained in this Supplemental
Indenture and the Notes or otherwise applicable under the Securities
Act, the Trustee shall adjust the principal amount of the relevant
Global Note(s) pursuant to Section 2.02(h) of this Supplemental
Indenture.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.02(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of
a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of
a beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of
a beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications and certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may be
exchanged by any Holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.02(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the applicable
Registration Rights Agreement and the Holder of the beneficial
interest to be transferred, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to a Shelf
Registration Statement in accordance with the applicable
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to an Exchange Offer Registration Statement in
accordance with the applicable Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such beneficial interest
in a Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the Holder of such beneficial interest
in a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to
the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained in this Supplemental Indenture and in the
Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 3.3 of the Indenture, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any Holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to
an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other
than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.02(h) of this Supplemental Indenture, and the Company shall execute
and the Trustee shall authenticate and deliver to the Person designated
in the instructions a Restricted Definitive Note in the appropriate
principal amount. Any Restricted Definitive Note issued in exchange for
a beneficial interest in a Restricted Global Note pursuant to this
Section 2.02(c) shall be registered in such name or names and in such
authorized denomination or denominations as the Holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Restricted Definitive Notes to the Persons
in whose names such Notes are so registered. Any Restricted Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.02(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer
contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A Holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
an Exchange Offer in accordance with the applicable Registration
Rights Agreement and the Holder of such beneficial interest, in
the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that
it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to a Shelf
Registration Statement in accordance with the applicable
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such beneficial interest
in a Restricted Global Note proposes to exchange such
beneficial interest for a Definitive Note that does not
bear the Private Placement Legend, a certificate from
such Holder in the form of Exhibit C hereto, including
the certifications in item (1)(b) thereof; or
(2) if the Holder of such beneficial interest
in a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a Definitive Note that does not
bear the Private Placement Legend, a certificate from
such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to
the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained in this Supplemental Indenture and in the
Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 3.3 of the Indenture, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any Holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.02(b)(ii) of this Supplemental Indenture, the Trustee shall cause the
aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.02(h) of this Supplemental Indenture,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note
in the appropriate principal amount. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section
2.02(c)(iii) shall be registered in such name or names and in such
authorized denomination or denominations as the Holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section
2.02(c)(iii) shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in reliance
on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B)
through (D) above, a certificate to the effect set forth in
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case of
clause (A) above, the appropriate Restricted Global Note, in the case
of clause (B) above, the 144A Global Note, in the case of clause (C)
above, the Regulation S Global Note, and in all other cases, the IAI
Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the applicable
Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not
(1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to a Shelf
Registration Statement in accordance with the applicable
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to an Exchange Offer Registration Statement in
accordance with the applicable Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial
interest in the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes
proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of a beneficial
interest in the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to
the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained in this Supplemental Indenture and in the
Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs
in this Section 2.02(d)(ii), the Trustee shall cancel the Definitive
Notes and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Unrestricted Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from an Unrestricted Definitive
Note or a Restricted Definitive Note, as the case may be, to a
beneficial interest is effected pursuant to subparagraphs (ii)(B),
(ii)(D) or (iii) above at a time when an Unrestricted Global Note has
not yet been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 3.3 of the Indenture,
the Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the principal amount of
Unrestricted Definitive Notes or Restricted Definitive Notes, as the
case may be, so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.02(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.02(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes.
Any Restricted Definitive Note may be transferred to and registered in
the name of Persons who take delivery thereof in the form of a
Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if
applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
an Exchange Offer in accordance with the applicable Registration
Rights Agreement and the Holder, in the case of an exchange, or
the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to a Shelf
Registration Statement in accordance with the applicable
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to an Exchange Offer Registration Statement in
accordance with the applicable Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive
Notes proposes to exchange such Notes for an
Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit C hereto, including the
certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained in this
Supplemental Indenture and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of an Exchange Offer in
accordance with the applicable Registration Rights Agreement, the Company shall
issue and, upon receipt of an Authentication Order in accordance with Section
3.3, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in
an aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in an Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in an Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Restricted Definitive Notes so accepted
Unrestricted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Supplemental Indenture
unless specifically stated otherwise in the applicable provisions of this
Supplemental Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend
in substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET
FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (as defined in Rule 144A under the
Securities Act) (A "QIB"), (B) IT HAS ACQUIRED THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act) (AN "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO ALLIED NA OR ANY OF
ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS NOTE (the form of
which can be obtained from the Trustee) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT
OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO ALLIED NA THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO ALLIED NA) OR (G)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
to this Section 2.02 (and all Notes issued in exchange therefor
or substitution thereof) shall not bear the Private Placement
Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED
IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY
FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
(I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 3.6 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 3.5 OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
3.9 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF ALLIED NA."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 3.9 of the
Indenture. At any time prior to such cancellation, if any beneficial interest in
a Global Note is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such Global Note
shall be reduced accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to
reflect such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note by
the Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a Holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.4, 8.6 and 11.7 of the
Indenture and subsections 13(a) and 13(b) of Section 1.01 of this
Supplemental Indenture).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits of the Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of
transfer or exchange.
(v) The Company shall not be required (A) to issue, to register
the transfer of or to exchange any Notes during a period beginning at
the opening of business 15 days before the day of any selection of
Notes for redemption under Section 11.3 of the Indenture and ending at
the close of business on the day of selection, (B) to register the
transfer of or to exchange any Note so selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in
part or (C) to register the transfer of or to exchange a Note between a
record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered as the absolute owner
of such Note for the purpose of receiving payment of principal of and
interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 3.3 of the
Indenture.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.02
to effect a registration of transfer or exchange may be submitted by
facsimile.
ARTICLE III.
DEFINITIONS
Section 3.03. Additional definitions. In addition to the definitions
set forth in Article I of the Indenture, the Notes shall include the following
additional definitions, which, in the event of a conflict with the definition of
terms in the Indenture the definitions in this Supplemental Indenture, shall
control:
"144A Global Note" means a global note substantially in the form
of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of, and registered in
the name of, the Depositary or its nominee that will be issued in a
denomination equal to the outstanding principal amount of the Notes
sold in reliance on Rule 144A.
"Acquired Business" means (a) any Person at least a majority of
the capital stock or other ownership interests of which is acquired
after the date hereof by the Company or a Subsidiary of the Company and
(b) any assets constituting a discrete business or operating unit
acquired on or after the date hereof by the Company or a Subsidiary of
the Company.
"Allied Waste Group" means, collectively, AWI, the Company, and
their respective subsidiaries, and a "member" of the AWI Waste Group
means AWI, the Company and each of their respective subsidiaries.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules
and procedures of the Depository, Euroclear and Cedel that apply to
such transfer or exchange.
"Apollo" means Apollo Management IV, L.P. or its Permitted
Transferees (exclusive of the Allied Waste Group).
"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
the Restricted 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 or business, or
(iii) other assets or rights of such Person or any Restricted
Subsidiary outside of the ordinary course of business. Notwithstanding
the preceding, the following items shall not be deemed to be an Asset
Disposition (x) a disposition by a Subsidiary of such Person to such
Person or a Restricted Subsidiary or by such Person to a 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 7 of the Indenture (as superseded by subsection 15 of
Section 1.01 hereof) of the Company and (z) any disposition that
constitutes a Restricted Payment or Permitted Investment that is
permitted pursuant to the provisions of subsection 13(d) of Section
1.01 of this Supplemental Indenture.
"AWI" means Allied Waste Industries, Inc.
"Bank Agreement" means the credit agreement of the Company dated
July 21, 1999, as amended, among the Company, AWI, certain lenders
party thereto, The Chase Manhattan Bank, DLJ Capital Funding, Inc., and
Citicorp USA, Inc., as agents, or any bank credit agreement that
replaces, amends, supplements, restates or renews such credit
agreement.
"Blackstone" means the collective reference to (i) Blackstone
Capital Partners III Merchant Banking Fund L.P., a Delaware limited
partnership, Blackstone Capital Partners II Merchant Banking Fund L.P.,
a Delaware limited partnership, Blackstone Offshore Capital Partners
III L.P., a Cayman Islands limited partnership, Blackstone Offshore
Capital Partners II L.P., a Cayman Islands limited partnership,
Blackstone Family Investment Partnership III L.P., a Delaware limited
partnership, and Blackstone Family Investment Partnership II L.P., a
Cayman Islands limited partnership (each of the foregoing, a
"Blackstone Fund") and (ii) each Affiliate of any Blackstone Fund that
is not an operating company or Controlled by an operating company and
each general partner of any Blackstone Fund or any Blackstone Affiliate
who is a partner or employee of The Blackstone Group L.P.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"BFI" means Browning-Ferris Industries, Inc., a Delaware
corporation.
"Broker-Dealer" has the meaning set forth in the Registration
Rights Agreement.
"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 of such obligation 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.
"Cash Equivalents" means (i) United States dollars, (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, (iv) demand deposits made in the
ordinary course of business and consistent with the Company's customary
cash management policy in any domestic office of any commercial bank
organized under the laws of the United States of America or any State
thereof, (v) insured deposits issued by commercial banks of the type
described in Clause (iv) above, (vi) mutual funds whose investment
guidelines restrict such funds' investments primarily to those
satisfying the provisions of Clauses (i) through (iii) above, (vii)
repurchase obligations with a term of not more than 90 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 and (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 Services, Inc., and in each
case maturing within 360 days.
"Cedel" means Cedel Bank, SA.
"Common Stock" of any Person means Capital Stock of such Person
that does not rank prior to the payment of dividends or as of the
distribution of assets upon any voluntary liquidation, dissolution or
winding up of such Person, to shares of Capital Stock or any other
class of such Person.
"Comparable Treasury Issue" means, on any date the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Notes on such
date that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate
debt securities of a maturity comparable to the remaining term of such
Notes on such date. "Independent Investment Banker" means Donaldson,
Lufkin & Jenrette Securities Corporation or if such firm is unwilling
or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by the
Trustee.
"Comparable Treasury Price" means, with respect to any
Redemption Date (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) on the third business day preceding such
Redemption Date, as set forth in the daily statistical release (or any
successor release) published by the Federal Reserve Bank of New York
and designated "Composite 3:30 p.m. Quotations for U.S. Government
Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day: (A) the
average of the Reference Treasury Dealer Quotations for such Redemption
Date after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or (B) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such
Quotations. "Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any Redemption Date, the average,
as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the Trustee by such
Reference Treasury Dealer at 5:00 p.m. on the third Business Day
preceding such Redemption Date.
"Consolidated EBITDA" of any Person means for any period the
Consolidated Net Income for such period increased by the sum of,
without duplication: (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; plus (iv) the aggregate amount
of letter of credit fees accrued during such period; plus (v) all
non-cash or non-recurring charges during such period, including charges
for costs related to acquisitions, it being understood that (x)
non-cash non-recurring charges shall not include accruals for closure
and post-closure liabilities and (y) charges shall be deemed non-cash
charges until the period during which cash disbursements attributable
to such charges are made, at which point such charges shall be deemed
cash charges; provided that, for purposes of this clause (y), the
Company shall be required to monitor the actual cash disbursements only
for those non-cash charges that exceed $1,000,000 individually or that
exceed $10,000,000 in the aggregate in any fiscal year); plus (vi) all
cash charges attributable to the execution, delivery and performance of
the Indenture (including the Supplemental Indenture) or the Bank
Agreement; plus (vii) all non-recurring cash charges related to
acquisitions and financings, including amendments thereto; and minus
all non-cash non-recurring gains during such period to the extent
included in determining net operating income for such period.
Notwithstanding the preceding, 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: (x)
only 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 of 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. Notwithstanding the foregoing, 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 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. In
determining the pro forma adjustments to Consolidated EBITDA to be made
with respect to any Acquired Business for periods prior to the
acquisition date thereof, actions taken by the Company and its
Restricted Subsidiaries prior to the first anniversary of the related
acquisition date that result in cost savings with respect to such
Acquired Business will be deemed to have been taken on the first day of
the period for which Consolidated EBITDA is being determined (with the
intent that such cost savings be effectively annualized by
extrapolation from the demonstrated cost savings since the related
acquisition date).
"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) the net amount
due and payable, or minus the net amount receivable, with respect to
any interest rate swap or similar agreement or foreign currency hedge,
exchange or similar agreement; (v) any Preferred Stock dividends
declared and paid or payable in cash; and (v) any interest capitalized
in accordance with generally accepted accounting principles.
"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 the following shall be
excluded: (a) for purposes solely of calculating Consolidated Net
Income for purposes of clause (3)(a) of the second half of the first
paragraph of subsection 13(d) of Section 1.01 of this Supplemental
Indenture 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, to
the extent such net income was distributed to shareholders of such
Person or used to purchase equity securities of such Person prior to
the date of such transaction, (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: (A) non-cash recurring charges shall not include
accruals for closure and post closure liabilities and (B) charges,
other than charges for the accruals referred to in (A) 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 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 of such period 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.
"Continuing Directors" means, as of any date of determination
with respect to any Person, any member of the Board of Directors of
such Person that:
(1) was a member of such Board of Directors on the
date hereof; or
(2) was nominated for election or elected to such Board
of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such
nomination or election.
"Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Default" means an event that is, or with the passage of time or
the giving of notice or both would be an Event of Default.
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.02
of this Supplemental Indenture, substantially in the form of Exhibit A
hereto except that such Note shall not bear the Global Note Legend and
shall not have the "Schedule of Exchanges of Interests in the Global
Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person specified in Section
3.1(b) of the Indenture as the Depositary with respect to the Notes,
and any and all successors thereto appointed as depositary hereunder
and having become such pursuant to the applicable provision of this
Supplemental Indenture.
"Designated Noncash Consideration" means: (1) the fair market
value of non-cash consideration received by the Company or one of its
Restricted Subsidiaries in connection with an Asset Disposition that is
so designated as Designated Noncash Consideration pursuant to an
Officers' Certificate, setting forth the basis of such valuation,
executed by the principal executive officer and the principal financial
officer of the Company, minus (2) the amount of cash or Cash
Equivalents received in connection with a sale of such Designated
Noncash Consideration.
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the Bank
Agreement; and
(2) after payment in full of all Obligations under the
Bank Agreement, any other Senior Debt permitted under this
Supplemental Indenture the principal amount of which is $100.0
million or more and that has been designated by the Company as
"Designated Senior Debt."
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Excepted Disposition" means a transfer, conveyance, sale, lease
or other disposition by the Company or any Restricted Subsidiary of any
asset of the Company or any Restricted Subsidiary the fair market value
of which itself does not exceed 2.5% of Consolidated Total Assets of
the Company and which, when aggregated with all other assets disposed
of in Excepted Dispositions in any fiscal year, does not exceed 5% of
Consolidated Total Assets of the Company.
"Exchange Notes" means the Notes issued in the Exchange Offer
pursuant to Section 2.02(f) of this Supplemental Indenture.
"Exchange Offer" has the meaning set forth in the Registration
Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which
are in effect on the date hereof.
"Global Note Legend" means the legend set forth in Section
2.02(g)(ii), which is required to be placed on all Global Notes issued
under this Supplemental Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes,
substantially in the form of Exhibit A hereto issued in accordance with
Section 2.01, 2.02(b)(iv), 2.02(d)(ii) or 2.02(f) of this Supplemental
Indenture.
"Guarantee" 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. "Guaranteed," "Guaranteeing" and "Guarantor" shall have meanings
correlative to the foregoing; provided, however, that the Guarantee by
any Person shall not include endorsements for such Person for
collection or deposit, in either case, in the ordinary course of
business.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means a Global Note bearing the Private
Placement Legend and held by an Institutional Accredited Investor.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Initial Purchasers" means, with respect to the Notes,
Donaldson, Lufkin & Jenrette Securities Corporation, Chase Securities
Inc., Salomon Smith Barney Inc., CIBC World Markets, Credit Suisse
First Boston Corporation, Deutsche Banc Alex. Brown, Morgan Stanley &
Co. Incorporated, ABN AMRO Incorporated, First Union Capital Markets
Corp., Scotia Capital Markets (USA) Inc., Credit Lyonnais Securities
(USA) Inc., Banc One Capital Markets, Inc. and BancBoston Robertson
Stephens Inc.
"Institutional Accredited Investor" means an institution that is
an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act, who are not also QIBs.
"Insurance Subsidiaries" means Reliant Insurance Company and
Indemnity Corporation, a Vermont corporation and a Subsidiary of the
Company, Global Indemnity Assurance, a Vermont corporation and a
Subsidiary of BFI and Commercial Reassurance Limited, a corporation
organized under the laws of the Republic of Ireland and a Subsidiary of
BFI.
"Intercompany Agreements" means the Management Agreements
between AWI and the Company dated November 15, 1996.
"Interest Rate or Currency Protection Agreement" of any Person
means any interest rate protection agreement (including, without
limitation, interest rate swaps, caps, floors, collars, derivative
instruments and similar agreements), and/or other types of interest
hedging agreements and any currency protection agreement (including
foreign exchange contracts, currency swap agreements or other currency
hedging arrangements).
"Investment" by any Person in any other Person means: (i) any
direct or indirect loan, advance or other extension of credit or
capital contribution to or for the account of such other Person, by
means of any transfer of cash or other property to any Person or any
payment for property or services for the account or use of any Person,
or otherwise, (ii) any direct or indirect purchase or other acquisition
of any Capital Stock, bond, note, debenture or other debt or equity
security or evidence of Debt, or any other ownership interest, issued
by such other Person, whether or not such acquisition is from such or
any other Person, (iii) any direct or indirect payment by such Person
on a Guarantee of any obligation of or for the account of such other
Person or any direct or indirect issuance by such Person of such a
Guarantee or (iv) any other investment of cash or other property by
such Person in or for the account of such other Person.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by
such Holders in connection with the Exchange Offer.
"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 equivalent 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, from
such Asset Disposition 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 Debt or 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 that, 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.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"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."
"Notes" has the meaning assigned to it in the preamble to this
Supplemental Indenture.
"Offer to Purchase" means an offer, set forth in the Offer
Document sent by the Company by first class mail, postage prepaid, to
each Holder at his or her address appearing in the Note Register on the
date of the Offer Document, to purchase up to the principal amount of
Notes specified in such Offer Document at the purchase price (the
"Purchase Price") specified in such Offer Document (as determined
pursuant to this Supplemental Indenture). Unless otherwise required by
applicable law, the Offer Document shall specify 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 the Purchase Date for
the purchase of Notes within five Business Days after the Offer
Expiration Date. 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 or incorporated by reference: (i) 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
subsection 13(i) of Section 1.01 of this Supplemental Indenture, which
requirements may be satisfied by delivery of such documents together
with the Offer Document, and (ii) any other information required by
applicable law to be included in the Offer Document. The Offer Document
shall contain all instructions and materials necessary to enable
Holders to tender Notes pursuant to the Offer to Purchase. The Offer
Document shall also state:
(1) the Section of this Supplemental 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 Notes
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 Supplemental Indenture) (the
"Purchase Amount");
(4) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of Notes accepted for payment (as specified
pursuant to this Supplemental Indenture);
(5) that the Holder may tender all or any portion of the Notes
registered in the name of such Holder and that any portion of a Note
tendered must be tendered in an integral multiple of $1,000 principal
amount;
(6) the place or places where Notes are to be surrendered for
tender pursuant to the Offer to Purchase;
(7) that interest on any Note not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will
continue to accrue;
(8) that on the Purchase Date the purchase price will become due
and payable upon each Note accepted for payment pursuant to the Offer
to Purchase and that interest thereon shall cease to accrue on and
after the Purchase Date;
(9) that each Holder electing to tender a Note pursuant to the
Offer to Purchase will be required to surrender such Note at the place
or places specified in the Offer Document prior to the close of
business on the Offer 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
authorize in writing and bearing appropriate signature guarantees);
(10) that Holders will be entitled to withdraw all or any
portion of Notes 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 Note the Holder
tendered and a statement that such Holder is withdrawing all or a
portion of his tender;
(11) that (a) if Notes 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 Notes and (b) if Notes 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 Notes having an
aggregate principal amount equal to the Purchase Amount on a pro rata
basis (with such adjustments as may be deem appropriate so that only
Securities in denominations of $1,000 or integral multiples thereof
shall be purchased); and
(12) that in the case of any Holder whose Note is purchased only
in part, the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Note without service charge, a new
Note or Notes, of any authorized denomination as requested by such
Holder, in an aggregate 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.
"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.
"Participant" means, with respect to the Depositary, Euroclear
or Cedel, a Person who has an account with the Depositary, Euroclear or
Cedel, respectively (and, with respect to DTC, shall include Euroclear
and Cedel).
"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, (iv) demand
deposits made in the ordinary course of business and consistent with
the Company's customary cash management policy in any domestic office
of any commercial bank organized under the laws of the United States of
America or any State thereof, (v) insured deposits issued by commercial
banks of the type described in Clause (iv) above, (vi) mutual funds
whose investment guidelines restrict such funds' investments primarily
to those satisfying the provisions of Clauses (i) through (iii) above,
(vii) repurchase obligations with a term of not more than 90 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 of such rating by Standard & Poor's Ratings Group or P-1 or
the equivalent of such rating by Moody's Investors Services, 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 and extensions
of trade credit in the ordinary course of business, (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 AWI,
in connection with management incentive plans not to exceed $50,000,000
at any time outstanding; provided, however, that to the extent the
proceeds thereof are used to purchase Capital Stock (other than
Redeemable Interests) of: (i) the Company from the Company or (ii) AWI
from AWI if AWI uses the proceeds thereof to acquire Capital Stock
(other than Redeemable Interests) of the Company, such limitation on
the amount of such Investments at any time outstanding shall not apply
with respect to such Investments, (xii) any Investment consisting of a
Permitted Interest Rate or Currency Protection Agreement, (xiii) any
Investment acquired by the Company or any of its Restricted
Subsidiaries (A) in exchange for any other Investment or accounts
receivable held by the Company or any such Restricted Subsidiary in
connection with or as a result of a bankruptcy, workout, reorganization
or recapitalization of the issuer of such other Investment or accounts
receivable or (B) as a result of a foreclosure by the Company or any of
its Restricted Subsidiaries with respect to any secured Investment or
other transfer of title with respect to any secured Investment in
default, (xiv) any Investment that constitutes part of the
consideration from any Asset Disposition made pursuant to, and in
compliance with, subsection 13(a) of Section 1.01 of this Supplemental
Indenture, (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 15% of
the Consolidated Total Assets of the Company outstanding at any time.
"Permitted Liens" means (i) Liens incurred after the date of
this Supplemental Indenture securing Debt of the Company that ranks
pari passu in right of payment to the Notes, if the Notes are secured
equally and ratably with such Debt; (ii) Liens in favor of the Company
or any Restricted Subsidiary; (iii) Liens on property of, or shares of
Stock or evidences of Debt of, a Person existing at the time such
Person is merged into or consolidated with the Company or any
Restricted Subsidiary of the Company, provided that such Liens were not
incurred in contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged into or
consolidated with the Company or any Restricted Subsidiary; (iv) Liens
on property existing at the time of acquisition of such property by the
Company or any Restricted Subsidiary of the Company, provided that such
Liens were not incurred in contemplation of such acquisition; (v) Liens
existing on the date of this Supplemental Indenture; (vi) Liens for
taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that
any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (vii) Liens
securing Permitted Refinancing Debt where the Liens securing the
Permitted Refinancing Debt were permitted under this Supplemental
Indenture; (viii) landlords', carriers', warehousemen's, mechanics',
materialmen's, repairmen's or the like Liens arising by contract or
statute in the ordinary course of business and with respect to amounts
which are not yet delinquent or are being contested in good faith by
appropriate proceedings; (ix) pledges or deposits made in the ordinary
course of business (A) in connection with leases, performance bonds and
similar obligations, or (B) in connection with workers' compensation,
unemployment insurance and other social security legislation; (x)
easements, rights-of-way, restrictions, minor defects or irregularities
in title and other similar encumbrances which, in the aggregate, do not
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Company or such Restricted Subsidiary; (xi) any attachment or judgment
Lien that does not constitute an Event of Default; (xii) Liens in favor
of the Trustee for its own benefit and for the benefit of the Holders;
(xiii) any interest or title of a lessor pursuant to a lease
constituting a Capital Lease Obligation; (xiv) pledges or deposits made
in connection with acquisition agreements or letters of intent entered
into in respect of a proposed acquisition; (xv) Liens in favor of prior
holders of leases on property acquired by the Company or of sublessors
under leases on Company property; (xvi) Liens incurred or deposits made
to secure the performance of tenders, bids, leases, statutory or
regulatory obligations, banker's acceptances, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money);
(xvii) Liens, including extensions and renewals thereof upon real or
personal property acquired after the date of the Supplemental
Indenture; provided that: (a) any such Lien is created solely for the
purpose of securing Debt incurred, in accordance with subsection 13(c)
of Section 1.01 of this Supplemental Indenture (1) to finance the cost
(including the cost of improvement or construction) of the item,
property or assets subject to such Lien, and such Lien is created prior
to, at the time of or within three months after the later of the
acquisition, the completion of construction or the commencement of full
operation of such property or (2) to refinance any Debt previously so
secured, (b) the principal amount of the Debt secured by such Lien does
not exceed 100% of such cost and (c) any such Lien shall not extend to
or cover any property or asset other than such item of property or
assets and any improvements on such item; (xviii) leases or subleases
granted to others that do not materially interfere with the ordinary
course of business of the Company and its Restricted Subsidiaries,
taken as a whole; (xix) Liens arising from filing Uniform Commercial
Code financing statements regarding leases; (xx) Liens on property of,
or on shares of stock or Debt of, any Person existing at the time such
Person becomes, or becomes a part of, any Restricted Subsidiary,
provided that such Liens do not extend to or cover any property or
assets of the Company or any Restricted Subsidiary other than the
property or assets acquired; (xxi) Liens encumbering deposits securing
Debt under Permitted Interest Rate Currency or Commodity Price
Agreements; (xxii) Liens arising out of conditional sale, title
retention, consignment or similar arrangements for the sale of goods
entered into by the Company or any of its Restricted Subsidiaries in
the ordinary course of business in accordance with the past practices
of the Company and its Restricted Subsidiaries; (xxiii) any renewal of
or substitution of any Liens permitted by any of the preceding clauses,
provided that (a) the Debt secured is not increased other than by the
amount of any premium and accrued interest, plus customary fees,
consent payments, expenses and costs related to such renewal or
substitution of Liens or the incurrence of any related refinancing of
Debt and (b) the Liens are not extended to any additional assets (other
than proceeds and accessions; (xxiv) Liens incurred in the ordinary
course of business of the Company or any Restricted Subsidiary of the
Company with respect to obligations that do not exceed $50 million at
any one time outstanding and that (a) are not incurred in connection
with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (b) do
not in the aggregate materially detract from the value of the property
or materially impair the use thereof in the operation of business by
the Company or such Restricted Subsidiary; and (xxv) Liens on assets of
Unrestricted Subsidiaries that secure non-recourse Debt of Unrestricted
Subsidiaries. This definition does not authorize the incurrence of any
Debt not otherwise permitted by subsection 13(c) of Section 1.01 of
this Supplemental Indenture.
"Permitted Transferee" means, with respect to any Person: (i)
any Affiliate of such Person; (ii) any investment manager, investment
advisor, or constituent general partner of such Person; or (iii) any
investment fund, investment account, or investment entity that is
organized by such Person or its Affiliates and whose investment
manager, investment advisor, or constituent general partner is such
Person or a Permitted Transferee of such Person.
"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.
"Private Placement Legend" means the legend set forth in Section
2.02(g)(i) to be placed on all Notes issued under this Supplemental
Indenture except where otherwise permitted by the provisions of this
Supplemental Indenture.
"Public Offering" means any underwritten public offering of
Common Stock pursuant to a registration statement filed under the
Securities Act.
"Purchase Date" means a settlement for the purchase of Notes
within five Business Days after the Offer Expiration Date.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Reference Treasury Dealer", means Donaldson, Lufkin & Jenrette
Securities Corporation and its successors, provided, however, that if
any of the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue, expressed in each case as a percentage of
its principal amount, quoted in writing to the Trustee by such
Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such Redemption Date.
"Registration Rights Agreement" means the Registration Rights
Agreement for the Notes, dated as of July 30, 1999, by and among the
Company and the other parties named on the signature pages thereof, as
such agreement may be amended, modified or supplemented from time to
time.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Note" means a global Note bearing the
Private Placement Legend and deposited with or on behalf of the
Depositary and registered in the name of the Depositary or its nominee,
issued in a denomination equal to the outstanding principal amount of
the Notes initially sold in reliance on Rule 903 of Regulation S.
"Related Business" means a business substantially similar to the
business engaged in by the Company and its Subsidiaries on the date of
this Supplemental Indenture.
"Related Person" of any Person means, without limitation, any
other Person owning (a) 5% or more of the outstanding Common Stock of
such Person or (b) 5% or more of the Voting Stock of such Person.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Period" means the 40-day restricted period as
defined in Regulation S.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"Senior Convertible Preferred Stock" means the senior
convertible preferred stock with an initial liquidation preference of
$1.0 billion issued pursuant to a Certificate of Designations of AWI as
such Certificate of Designations is in effect on the date of this
Supplemental Indenture as modified from time to time; provided that
such modifications do not increase the amount of dividends paid or
payable in respect thereof.
"Senior Debt" means (1) all Indebtedness of the Company or any
Guarantor outstanding under the Bank Agreement and all Permitted
Interest Rate or Currency Protection Agreements with respect thereto,
unless the instrument under which such Indebtedness is incurred
expressly provides that it is on parity with or subordinated in right
of payment to the Notes or any Guarantee or subordinated to any other
Debt of the Company or any Guarantor; (2) any other Indebtedness of the
Company or any Guarantor permitted to be incurred under the terms of
this Supplemental Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on parity with
or subordinated in right of payment to the Notes of any Guarantee or
subordinated to any other Debt of the Company or any Guarantor; and (3)
all Obligations with respect to the items listed in the preceding
clauses (1) and (2). Notwithstanding anything to the contrary in the
preceding, Senior Debt shall not include: (1) any liability for
federal, state, local, or other taxes owed or owing by the Company; (2)
any Indebtedness of the Company to any of its Subsidiaries or other
Affiliates; (3) any trade payables; or (4) the portion of any
Indebtedness that is incurred in violation of this Supplemental
Indenture.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Special Interest" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"Subsidiary" of any Person means: (1) a corporation of which
more than 50% of the combined voting power of the outstanding Voting
Stock is owned, directly or indirectly, by such Person or by one or
more other Subsidiaries of such Person or by such Person and one of
more Subsidiaries thereof, (2) 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 (3) 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.
"Tranche D Term Loans" means the Tranche D Term Loans issued
under the Bank Agreement as in effect on the date of this Supplemental
Indenture in an aggregate principal amount not in excess of $500
million.
"Treasury Yield" means with respect to any Redemption Date, the
rate per annum equal to the semi-annual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such Redemption Date.
"U.S. Person" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"Unrestricted Definitive Note" means one or more Definitive
Notes that do not bear and are not required to bear the Private
Placement Legend.
"Unrestricted Global Note" means a permanent global Note
substantially in the form of Exhibit A attached hereto that bears the
Global Note Legend and that has the "Schedule of Exchanges of Interests
in the Global Note" attached thereto, and that is deposited with or on
behalf of and registered in the name of the Depositary, representing a
series of Notes that do not bear the Private Placement Legend.
"Unrestricted Subsidiary" means (i) at any date, a Subsidiary of
the Company that is an Unrestricted Subsidiary in accordance with the
provisions of subsection 13(j) of Section 1.01 hereof 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
subsection 13(j) of Section 1.01 hereof 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.
ARTICLE IV.
MISCELLANEOUS
Section 4.01. Definitions. Capitalized terms used but not defined
in this Supplemental Indenture shall have the meanings ascribed thereto in the
Indenture.
Section 4.02. Confirmation of Indenture. The Indenture, as modified,
supplemented and superseded by this Supplemental Indenture, is in all respects
ratified and confirmed, and the Indenture and this Supplemental Indenture shall
be read, taken and construed as one and the same instrument. (References herein
to the Indenture shall be deemed to be to the Indenture, as modified,
supplemented and superseded by this Supplemental Indenture).
Section 4.03. Concerning the Trustee. The Trustee assumes no duties,
responsibilities or liabilities by reason of this Supplemental Indenture other
than as set forth in the Indenture and, in carrying out its responsibilities
hereunder, shall have all of the rights, protections and immunities which it
possesses under the Indenture.
Section 4.04. Governing Law. This Supplemental Indenture, the Indenture
and the Notes shall be governed by and construed in accordance with the law of
the State of New York without giving effect to any provisions thereof relating
to conflicts of law.
Section 4.05. Separability. In case any provision in this Supplemental
Indenture shall for any reason be held to 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 4.06. Counterparts. This Supplemental Indenture may be executed
in any number of counterparts each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
Supplemental Indenture Signature Page
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
ALLIED WASTE NORTH AMERICA, INC.
By: /s/ G. Thomas Rochford, Jr.
-----------------------------
Name: G. Thomas Rochford, Jr.
Title: Treasurer
ALLIED WASTE INDUSTRIES, INC.
for purposes of Article 16 of the Indenture and as Guarantor of
the Securities and as Guarantor of the obligations of the
Subsidiary Guarantors under the Subsidiary Guarantees
By: /s/ G. Thomas Rochford, Jr.
--------------------------------
Name: G. Thomas Rochford, Jr.
Title: Treasurer
Each of the Subsidiary Guarantors Listed on Schedule I hereto,
as Guarantor of the Securities
By*: /s/ G. Thomas Rochford, Jr.
-----------------------------------
Name: G. Thomas Rochford, Jr.
Title: Treasurer
U.S. BANK TRUST NATIONAL ASSOCIATION
By:
Name:
Title:
<PAGE>
EXHIBIT A
[Face of Note]
- --------------------------------------------------------------------------------
CUSIP/CINS ____________
10% Series A Senior Subordinated Notes due 2009
No. ______ $____________
ALLIED WASTE NORTH AMERICA, INC.
promises to pay to Cede & Co.,
or registered assigns,
the principal sum of
Dollars on May 1, 2009.
Interest Payment Dates: May 1 and November 1, commencing November 1, 1999
Record Dates: April 15 and October 15
Dated: July 30, 1999
ALLIED WASTE NORTH AMERICA, INC.
By:
-------------------------------
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By: ----------------------------------
Authorized Signatory
A-1
<PAGE>
[Back of Note]
10% Series A Senior Subordinated Notes due 2009
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Regulation S Note Legend, if applicable, pursuant to the provision
of the Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Allied Waste North America, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at 10% per annum from the date hereof until maturity and shall pay the Special
Interest, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Special Interest
semi-annually in arrears on May 1 and November 1 of each year beginning November
1, 1999, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
November 1, 1999. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 2% per annum in
excess of the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Special Interest, if any, from time to time on
demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360 day year of twelve 30 day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Special Interest, if any, to the Persons who are
registered Holders of Notes at the close of business on the April 15 or October
15 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 3.7(b) of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Special Interest, if any,
and interest at the office or agency of the Company maintained for such purpose
within or without the City and State of New York, or, at the option of the
Company, payment of interest and Special Interest, if any, may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to principal of and interest, premium and Special
Interest on, all Global Notes and all other Notes the Holders of which shall
have provided wire transfer instructions to the Company or the Paying Agent at
least 10 Business Days prior to the applicable payment date. Such payment shall
be 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.
3. PAYING AGENT AND REGISTRAR. Initially, U.S. Bank Trust National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
A-2
<PAGE>
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of July 30, 1999, as amended by the Supplemental Indenture dated as of July 30,
1999 (together, the "Indenture"), each among the Company, the Guarantors and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa 77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the indenture shall govern and be
controlling. The Notes are obligations of the Company limited to $2.0 billion in
aggregate principal amount.
5. SUBORDINATION. The Notes are subordinated to Senior Debt, as defined
in the Supplemental Indenture. To the extent provided in the Supplemental
Indenture, Senior Debt must be paid in full before any payment may be made in
respect of the Notes or any other Obligation in respect of Senior Debt. Each
Holder by accepting a Note agrees to the subordination provisions contained in
the Indenture and authorizes the Trustee to give it effect and appoints the
Trustee as attorney-in-fact for such purpose. The Indenture also provides that,
under certain circumstances, the Company will be prohibited from making any
payments in respect of the Notes or any other Obligation in respect of Senior
Debt if the Company is in default on any Senior Debt.
6. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraphs (b), (c) and (d) of this
Paragraph 5, the Company shall not have the option to redeem the Notes prior to
the final maturity of such Notes.
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, prior to August 1, 2004 the Company may redeem Notes, at its
option, upon not less than 30 nor more than 60 days' notice mailed to each
Holder of Notes to be redeemed at such Holder's address appearing in the Note
Register, in amounts of $1,000 or an integral multiple of $1,000, at a
Redemption Price equal to the greater of (i) 100% of their principal amount or
(ii) the sum of the present values of the remaining scheduled payments of
principal and interest thereon discounted to maturity on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Yield plus 50 basis points, plus in each case accrued but unpaid interest
(including Special Interest) to but excluding the Redemption Date (subject to
the right of Holders of record on the relevant Regular Record Date to receive
interest due on an Interest Payment Date that is on or prior to the Redemption
Date).
(c) Prior to August 1, 2002, the Company may redeem up to 331/3%
in aggregate principal amount of the Notes originally issued under the indenture
at a redemption price equal to 110.0% of the principal amount of the Notes
redeemed, together with accrued but unpaid interest (including Special Interest)
to the redemption date (subject to the right of Holders of record on the
relevant regular record date to receive interest due on an interest payment date
that is on or prior to the redemption date) with the net proceeds of one or more
Public Offerings of Capital Stock (other than Redeemable Interests); 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.
A-3
<PAGE>
(d) On or after August 1, 2004 the 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 Notes to be redeemed at such Holder's address appearing in the
register of Holders, in amounts of $1,000 or an integral multiple of $1,000 at
the following Redemption Prices, expressed as percentages of principal amount,
plus accrued but unpaid interest (including Special Interest) to but excluding
the Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest Payment Date that is
on or prior to the Redemption Date), if redeemed during the twelve-month period
beginning on August, of each of the years indicated below:
Year Percentage
2004..................................................................105.0000%
2005..................................................................103.3333%
2006..................................................................101.6667%
2007 and thereafter...................................................100.0000%
7. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
8. REPURCHASE AT OPTION OF HOLDER. 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.
9. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
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 need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the Guarantors and
the rights of the Holders of the Securities under the Indenture at any time by
the Company, the Guarantors and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Notes at the time.
A-4
<PAGE>
13. DEFAULTS AND REMEDIES. Events of Default include: (i) failure to
pay any interest on any note issued under the indenture when due, continued for
30 days, whether or not prohibited by the subordination provisions of the
indenture; (ii) failure to pay principal of or premium, if any, on any note
issued under the indenture when due, whether or not prohibited by the
subordination provisions of the indenture, (iii) failure to perform or to comply
with subsections 13(a), or 13(b) of Section 1.01 of the Supplemental Indenture
or Article 7 of the Indenture (as superseded by Subsection 15 of Section 1.01 of
the Supplemental Indenture); (iv) failure to perform any other covenant or
warranty of the Company or any Guarantor in the indenture or the Notes issued
under the indenture, continued for 60 days after written notice from Holders of
at least 10% in principal amount of the Outstanding Notes issued under the
indenture as provided in the indenture; (v) a default or defaults under any
bonds, debentures, notes or other evidences of, or obligations constituting,
Debt by the Company, any Guarantors or any Restricted Subsidiary or under any
mortgages, indentures, instruments or agreements under which there may be issued
or existing or by which there may be secured or evidenced any Debt of the
Company, the Guarantor or any Restricted Subsidiary with a principal or similar
amount then outstanding, individually or in the aggregate, in excess of $50
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 to such Debt, 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; (vi) the rendering of a final judgment or
judgments, not subject to appeal, against the Company, the Parent Guarantor or
any of its Restricted Subsidiaries in an aggregate amount in excess of $50
million that remains unstayed, undischarged or unbonded for a period of 60 days
after such rendering; and (vii) certain events of bankruptcy, insolvency or
reorganization affecting the Company, AWI or any Restricted Subsidiary of the
Company. If any Event of Default (other than an Event of Default of the type
described in clause (vii) above) occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
accelerate the maturity of all such Notes. If an Event of Default of the type
described in clause (vii) above occurs, the principal of any accrued interest on
the Outstanding Notes will become immediately due an 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 Notes may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than the non-payment of accelerated
principal, have been cured or waived as provided in the Indenture. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Outstanding Notes by notice to the Trustee may on behalf
of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
A-5
<PAGE>
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
16. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement relating to the Notes dated as of July 30, 1999, among the Company,
the Guarantors and the parties named on the signature pages thereof (the
"Registration Rights Agreement").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
ALLIED WASTE NORTH AMERICA, INC.
15880 North Greenway - Hayden Loop, Suite 100
Scottsdale, AZ 85260
Attention: Treasurer
A-6
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
-------------------------------
(Insert assignee's legal name)
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
-------------------
Your Signature:
-------------------------
(Sign exactly as your name
appears on the face of this Note)
Signature Guarantee:
-------------------------------------
A-7
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to subsection 13(a) or 13(b) of Section 1.01 of the Supplemental
Indenture, check the appropriate box below:
[ ]Subsection 13(a) [ ] Subsection 13(b)
If you want to elect to have only part of the Note purchased by the
Company pursuant to subsection 13(a) or Section 13(b) of Section 1.01 of the
Supplemental Indenture, state the amount you elect to have purchased:
$--------------
Date:
------------------------
Your Signature:
-----------------------
(Sign exactly as your name
appears on the face of this Note)
Tax Identification No.:
-----------------------
Signature Guarantee:
----------------------------
A-8
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
<TABLE>
<CAPTION>
Principal Amount of
Amount of decrease Amount of increase in this Global Note Signature of
in Principal Amount Principal Amount of following such authorized officer
of this Global Note this Global Note decrease (or of Trustee or Note
Date of Exchange increase) Custodian
<S> <C> <C> <C> <C>
</TABLE>
A-9
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Allied Waste North America, Inc.
15880 North Greenway - Hayden Loop, Suite 100
Scottsdale, Arizona 85260
U.S. Bank Trust National Association
180 East 5th Street
St. Paul, MN 55101
Re: 10% Senior Subordinated Notes due 2009
---------------------------------------
Reference is hereby made to the Indenture, dated as of July 30, 1999,
as amended by that Supplemental Indenture, dated as of July 30, 1999
(collectively, the "Indenture"), between Allied Waste North America, Inc., as
issuer (the "Company"), and U.S. Bank Trust National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
___________________ (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ]Check if Transferee will take delivery of a beneficial interest in
the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [ ]Check if Transferee will take delivery of a beneficial interest in
the Regulation S Global Note or a Definitive Note pursuant to Regulation S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act, (iii) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act and (iv) if the
B-1
<PAGE>
proposed transfer is being made prior to the expiration of the Restricted
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Note and/or the Definitive Note and in the Indenture and
the Securities Act.
3. [ ]Check and complete if Transferee will take delivery of a beneficial
interest in the IAI Global Note or a Definitive Note pursuant to any provision
of the Securities Act other than Rule 144A or Regulation S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904,
and the Transferor hereby further certifies that it has not engaged in any
general solicitation within the meaning of Regulation D under the Securities Act
and the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is supported
by (1) a certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this certification),
to the effect that such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the IAI Global Note and/or the Definitive Notes and in the
Indenture and the Securities Act.
4. [ ] Check if Transferee will take delivery of a beneficial interest
in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) [ ] Check if Transfer is pursuant to Rule 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
B-2
<PAGE>
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [ ] Check if Transfer is Pursuant to Regulation S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [ ] Check if Transfer is Pursuant to Other Exemption.(i)The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
----------------------------
[Insert Name of Transferor]
By:
--------------------------------
Name:
Title:
Dated:
--------------------------------
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ), or
----------
(ii) [ ] Regulation S Global Note (CUSIP ), or
-----
(iii) [ ] IAI Global Note (CUSIP ); or
--------
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ), or
---------
(ii) [ ] Regulation S Global Note (CUSIP ), or
----
(iii) [ ] IAI Global Note (CUSIP ); or
------
(iv) [ ] Unrestricted Global Note (CUSIP ); or
----
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Allied Waste North America, Inc.
15880 North Greenway - Hayden Loop, Suite 100
Scottsdale, Arizona 85260
U.S. Bank Trust National Association
180 East 5th Street
St. Paul, MN 55101
Re: 10% Senior Subordinated Notes due 2009
----------------------------------------
(CUSIP _________)
Reference is hereby made to the Indenture, dated as of July 30, 1999,
as amended by that Supplemental Indenture, dated as of July 30, 1999
(collectively, the "Indenture"), between Allied Waste North America, Inc., as
issuer (the "Company"), and U.S. Bank Trust National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
___________________ (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $___________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note.
(a) [ ] Check if Exchange is from beneficial interest in a
Restricted Global Note to beneficial interest in an Unrestricted Global Note. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(b) [ ] Check if Exchange is from beneficial interest in a
Restricted Global Note to Unrestricted Definitive Note. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(c) [ ] Check if Exchange is from Restricted Definitive Note to
beneficial interest in an Unrestricted Global Note. In connection with the
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Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes.
(a) [ ] Check if Exchange is from beneficial interest in a
Restricted Global Note to Restricted Definitive Note. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) [ ] Check if Exchange is from Restricted Definitive Note to
beneficial interest in a Restricted Global Note. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation
of the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
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This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
------------------------------
[Insert Name of Transferor]
By:
-----------------------------
Name:
Title:
Dated:
-------------------------
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FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Allied Waste North America, Inc.
15880 North Greenway - Hayden Loop, Suite 100
Scottsdale, Arizona 85260
U.S. Bank Trust National Association
180 East 5th Street
St. Paul, MN 55101
Re: 10% Senior Subordinated Notes due 2009
------------------------------------------
Reference is hereby made to the Indenture, dated as of July 30, 1999,
as amended by that Supplemental Indenture, dated as of July 30, 1999
(collectively, the "Indenture"), between ALLIED Waste North America, Inc., as
issuer (the "Company"), and U.S. Bank Trust National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any person purchasing the Definitive Note or beneficial interest
in a Global Note from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.
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3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
-------------------------------------
[Insert Name of Accredited Investor]
By:
-----------------------------------
Name:
Title:
Dated:
---------------------------
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EXECUTION COPY
- --------------------------------------------------------------------------------
CREDIT AGREEMENT
dated as of
July 21, 1999
among
ALLIED WASTE INDUSTRIES, INC.,
ALLIED WASTE NORTH AMERICA, INC.,
The Lenders Party Hereto,
THE CHASE MANHATTAN BANK,
as Administrative Agent and Collateral Agent
CITICORP USA, INC.,
as Syndication Agent
and
DLJ CAPITAL FUNDING, INC.,
and
CREDIT SUISSE FIRST BOSTON
as Documentation Agents
---------------------------
CHASE SECURITIES INC. and SALOMON SMITH BARNEY INC.
as Arrangers
CHASE SECURITIES INC.,
as Book Manager
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE I Definitions
<S> <C> <C>
SECTION 1.01. Defined Terms....................................................................2
SECTION 1.02. Classification of Loans and Borrowings..........................................38
SECTION 1.03. Terms Generally.................................................................39
SECTION 1.04. Accounting Terms; GAAP. ........................................................39
ARTICLE II The Credits
SECTION 2.01. Commitments.....................................................................39
SECTION 2.02. Loans and Borrowings............................................................40
SECTION 2.03. Requests for Borrowings.........................................................40
SECTION 2.04. Swingline Loans.................................................................41
SECTION 2.05. Letters of Credit...............................................................42
SECTION 2.06. Funding of Borrowings...........................................................47
SECTION 2.07. Interest Elections..............................................................47
SECTION 2.08. Termination and Reduction of Commitments........................................48
SECTION 2.09. Repayment of Loans; Evidence of Debt............................................49
SECTION 2.10. Amortization of Term Loans......................................................50
SECTION 2.11. Prepayment of Loans.............................................................53
SECTION 2.12. Fees............................................................................55
SECTION 2.13. Interest........................................................................56
SECTION 2.14. Alternate Rate of Interest......................................................56
SECTION 2.15. Increased Costs.................................................................57
SECTION 2.16. Break Funding Payments..........................................................58
SECTION 2.17. Taxes...........................................................................58
SECTION 2.18. Payments Generally; Pro Rata Treatment;
Sharing of Setoffs..................................................60
SECTION 2.19. Mitigation Obligations; Replacement of Lenders..................................62
ARTICLE III Representations and Warranties
SECTION 3.01. Organization; Powers............................................................63
SECTION 3.02. Authorization...................................................................63
SECTION 3.03. Enforceability..................................................................64
SECTION 3.04. Governmental Approvals..........................................................64
SECTION 3.05. Financial Statements............................................................65
SECTION 3.06. No Material Adverse Change......................................................65
SECTION 3.07. Title to Properties; Possession Under Leases....................................65
SECTION 3.08. Subsidiaries; Other Equity Investments..........................................66
SECTION 3.09. Litigation; Compliance with Laws................................................66
SECTION 3.10. Agreements......................................................................66
SECTION 3.11. Federal Reserve Regulations.....................................................67
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act.........................................................67
SECTION 3.13. Tax Returns.....................................................................67
SECTION 3.14. No Material Misstatements.......................................................67
SECTION 3.15. Employee Benefit Plans..........................................................67
SECTION 3.16. Environmental Matters...........................................................68
SECTION 3.17. Insurance.......................................................................69
SECTION 3.18. Labor Matters...................................................................69
SECTION 3.19. Solvency........................................................................69
SECTION 3.20. Intellectual Property...........................................................69
SECTION 3.21. Year 2000.......................................................................70
SECTION 3.22. Senior Indebtedness.............................................................70
SECTION 3.23. Security Interests..............................................................70
SECTION 3.24. Tranche D Representations and Warranties........................................71
ARTICLE IV Conditions
SECTION 4.01. Effective Date..................................................................71
SECTION 4.02. Each Credit Event...............................................................76
SECTION 4.03. Determinations Under Section 4.01...............................................76
SECTION 4.04. Modification of Schedules.......................................................76
ARTICLE V-A Affirmative Covenants
SECTION 5.01A. Existence; Businesses and Properties...........................................76
SECTION 5.02A. Insurance......................................................................77
SECTION 5.03A. Obligations and Taxes..........................................................77
SECTION 5.04A. Financial Statements, Reports, Etc.............................................78
SECTION 5.05A. Litigation and Other Notices...................................................80
SECTION 5.06A. Employee Benefits..............................................................80
SECTION 5.07A. Maintaining Records; Access to Properties
and Inspections.....................................................80
SECTION 5.08A. Environmental Laws.............................................................81
SECTION 5.09A. Preparation of Environmental Reports...........................................81
SECTION 5.10A. Further Assurances.............................................................82
SECTION 5.11A. Compliance with Terms of Leaseholds............................................83
SECTION 5.12A. Performance of Material Agreements.............................................84
SECTION 5.13A. Inactive Subsidiaries..........................................................84
SECTION 5.14A. Year 2000......................................................................84
SECTION 5.15A. Information Regarding Collateral...............................................84
SECTION 5.16A. Casualty and Condemnation......................................................84
SECTION 5.17A. Compliance with Laws...........................................................84
SECTION 5.18A. Use of Proceeds and Letters of Credit..........................................85
SECTION 5.19A. Interest Rate Protection.......................................................85
SECTION 5.20A. Asset Sales....................................................................85
ARTICLE V-B Tranche D Affirmative Covenants
SECTION 5.01B. Existence; Businesses and Properties...........................................85
SECTION 5.02B. Insurance......................................................................86
SECTION 5.03B. Obligations and Taxes..........................................................86
SECTION 5.04B. Financial Statements, Reports, Etc.............................................87
SECTION 5.05B. Litigation and Other Notices...................................................88
SECTION 5.06B. Employee Benefits..............................................................89
SECTION 5.07B. Maintaining Records; Access to Properties and
Inspections.........................................................89
SECTION 5.08B. Environmental Laws.............................................................89
SECTION 5.09B. Preparation of Environmental Reports...........................................90
SECTION 5.10B. Compliance with Terms of Leaseholds............................................90
SECTION 5.11B. Performance of Material Agreements.............................................91
SECTION 5.12B. Inactive Subsidiaries..........................................................91
SECTION 5.13B. Year 2000......................................................................91
SECTION 5.14B. Compliance with Laws...........................................................91
SECTION 5.15B. Use of Proceeds and Letters of Credit..........................................91
SECTION 5.16B. Interest Rate Protection.......................................................91
SECTION 5.17B. Asset Sales....................................................................91
SECTION 5.18B. Further Assurances to the Tranche D Lenders....................................92
SECTION 5.19B. Additional Permitted Subordinated Debt.........................................92
SECTION 5.20B. Preliminary Offering Memorandum................................................92
ARTICLE VI-A Negative Covenants
SECTION 6.01A. Indebtedness; Certain Equity Securities........................................93
SECTION 6.02A. Liens..........................................................................95
SECTION 6.03A. No Other Negative Pledge.......................................................97
SECTION 6.04A. Sale and Lease-Back Transactions...............................................97
SECTION 6.05A. Investments, Loans, Guarantees and
Acquisitions........................................................98
SECTION 6.06A. Mergers, Consolidations, Sales of Assets and
Acquisitions.......................................................100
SECTION 6.07A. Hedging Agreements............................................................101
SECTION 6.08A. Restricted Payments; Certain Payments of
Indebtedness.......................................................101
SECTION 6.09A. Transactions with Affiliates..................................................103
SECTION 6.10A. Business of Allied Waste, Borrower and
Subsidiaries.......................................................103
SECTION 6.11A. Other Indebtedness and Agreements.............................................104
SECTION 6.12A. Amendment of Material Documents...............................................104
SECTION 6.13A. Interest Coverage Ratio.......................................................105
SECTION 6.14A. Leverage Ratio................................................................105
SECTION 6.15A. Capital Expenditure...........................................................105
SECTION 6.16A. Designation of Unrestricted Subsidiaries......................................105
ARTICLE VI-B Tranche D Negative Covenants
SECTION 6.01B. Indebtedness; Certain Equity Securities.......................................106
SECTION 6.02B. Liens.........................................................................109
SECTION 6.03B. No Other Negative Pledge......................................................110
SECTION 6.04B. Sale and Lease-Back Transactions..............................................111
SECTION 6.05B. Investments, Loans, Guarantees and
Acquisitions.......................................................111
SECTION 6.06B. Mergers, Consolidations, Sales of Assets
and Acquisitions...................................................112
SECTION 6.07B. Hedging Agreements............................................................113
SECTION 6.08B. Restricted Payments; Certain Payments of
Indebtedness.......................................................113
SECTION 6.09B. Transactions with Affiliates..................................................114
SECTION 6.10B. Business of Allied Waste, Borrower and
Subsidiaries.......................................................115
SECTION 6.11B. Other Indebtedness and Agreements.............................................115
SECTION 6.12B. Designation of Unrestricted Subsidiaries......................................116
SECTION 6.13B. Asset Disposition.............................................................116
SECTION 6.14B. Limitation on Senior Subordinated
Indebtedness.......................................................117
SECTION 6.15B. Capital Expenditure...........................................................117
ARTICLE VII Events of Default; Right To Cure
SECTION 7.01. Events of Default..............................................................118
SECTION 7.02. Borrower's Right to Cure.......................................................123
ARTICLE VIII The Administrative Agent
ARTICLE IX Miscellaneous
SECTION 9.01. Notices........................................................................126
SECTION 9.02. Waivers; Amendments............................................................126
SECTION 9.03. Expenses; Indemnity; Damage Waiver.............................................129
SECTION 9.04. Successors and Assigns.........................................................130
SECTION 9.05. Survival.......................................................................134
SECTION 9.06. Counterparts; Integration; Effectiveness.......................................134
SECTION 9.07. Severability...................................................................134
SECTION 9.08. Right of Setoff................................................................135
SECTION 9.09. Governing Law; Jurisdiction; Consent to
Service of Process.................................................135
SECTION 9.10. WAIVER OF JURY TRIAL...........................................................135
SECTION 9.11. Headings.......................................................................136
SECTION 9.12. Confidentiality................................................................136
SECTION 9.13. Interest Rate Limitation.......................................................136
SECTION 9.14. Exchange of Loans for Exchange Notes..........................................137
SECTION 9.15. Registration Rights............................................................137
ARTICLE X Subordination
SECTION 10.01. Agreement To Subordinate......................................................138
SECTION 10.02. Liquidation, Dissolution, Bankruptcy..........................................138
SECTION 10.03. Default on Senior Indebtedness................................................138
SECTION 10.04. Acceleration of Payment of Notes..............................................139
SECTION 10.05. When Distributions Must Be Paid Over..........................................139
SECTION 10.06. Subrogation...................................................................139
SECTION 10.07. Relative Rights...............................................................139
SECTION 10.08. Subordination May Not Be Impaired by
Borrower...........................................................140
SECTION 10.09. Rights of Administrative Agent................................................140
SECTION 10.10. Distribution or Notice to Representative......................................140
SECTION 10.11. Article X Not To Prevent Tranche D Events
of Default or Limit Right To Accelerate............................140
SECTION 10.12. Administrative Agent Entitled To Rely.........................................140
SECTION 10.13. Administrative Agent To Effectuate
Subordination......................................................141
SECTION 10.14. Administrative Agent Not Fiduciary for
Holders of Senior Indebtedness.....................................141
SECTION 10.15. Reliance by Holders of Senior Indebtedness
on Subordination Provisions........................................141
</TABLE>
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vii
SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 2.05 -- Existing Letters of Credit
Schedule 3.07 -- Landfills
Schedule 3.08 -- Subsidiaries; Equity Investments;
Inactive Subsidiaries
Schedule 3.09 -- Litigation
Schedule 3.15 -- Employee Benefit Plans
Schedule 3.16 -- Environmental Matters
Schedule 3.17 -- Insurance
Schedule 5.13 -- Inactive Subsidiaries
Schedule 5.20 -- Planned Asset Sales
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02(I) -- Existing Liens
Schedule 6.02(II) -- Existing Liens To Be Released
Schedule 6.05 -- Investments
Schedule 6.08 -- Required Joint Venture Restricted Payments
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit A-2 -- Form of Tranche D Assignment and
Acceptance
Exhibit B -- Intentionally Omitted
Exhibit C -- Form of Collateral Trust Agreement
Exhibit D -- Form of Exchange Note Indenture
Exhibit E-1 -- Form of Indemnity, Subrogation and
Contribution Agreement
Exhibit E-2 -- Form of Subordinated Indemnity,
Subrogation and Contribution
Agreement
Exhibit F -- Form of Non-Shared Collateral Pledge
Agreement
Exhibit G -- Form of Non-Shared Collateral
Security Agreement
Exhibit H -- Form of Parent Guarantee Agreement
Exhibit I-1 -- Form of Non-Shared Collateral
Perfection Certificate
Exhibit I-2 -- Form of Shared Collateral Perfection
Certificate
Exhibit J -- Form of Shared Collateral Pledge
Agreement
Exhibit K -- Form of Shared Collateral Security
Agreement
Exhibit L -- Form of Subordinated Parent
Guarantee Agreement
Exhibit M -- Form of Subordinated Subsidiary
Guarantee Agreement
Exhibit N -- Form of Subsidiary
Guarantee Agreement
Exhibit O-1 -- Form of Legal Opinion of Fried,
Frank, Harris, Shriver & Jacobson
Exhibit O-2 -- Form of Legal Opinion of Steve Helm
Exhibit P -- Form of Portfolio Exemption
Certificate
<PAGE>
CREDIT AGREEMENT dated as of July 21, 1999,
among ALLIED WASTE INDUSTRIES, INC., ALLIED WASTE
NORTH AMERICA, INC., the LENDERS party hereto, and
THE CHASE MANHATTAN BANK, as Administrative Agent and
Collateral Agent.
Pursuant to a Merger Agreement dated as of March 7, 1999
(together with the exhibits and schedules thereto, the "Merger Agreement"),
among Allied Waste, MergerCo and BFI (such term and each other capitalized term
used but not defined in this preamble having the meaning given it in Article I),
MergerCo will be merged with and into BFI (the "Merger") in a transaction in
which the outstanding shares of common stock of BFI will be converted into the
right to receive cash consideration of $45 per share. Upon consummation of the
Merger, Allied Waste will own, directly or indirectly through wholly owned
Subsidiaries, 100% of the capital stock of BFI and Allied Waste will directly
own 100% of the capital stock of AWNA. In connection with the consummation of
the Merger, (a) AWNA will obtain the credit facilities provided for hereunder,
(b) AWNA will (i) issue up to $2,500,000,000 of its Senior Subordinated Notes in
a public offering or in a Rule 144A or other private placement and (ii) to the
extent AWNA has not issued $2,500,000,000 of its Senior Subordinated Notes on or
before the Effective Date, borrow Tranche D Term Loans hereunder in an aggregate
principal amount equal to any shortfall, minus the amount of Net Available
Proceeds from Asset Sales or issuances of Equity Interests that the Borrower
anticipates will be applied to reductions of the Tranche D Commitments or
Tranche D Term Loans pursuant to and in accordance with Section 2.10(f) or (j),
(c) all the existing commercial paper of BFI and all indebtedness under the BFI
Credit Facility (other than Existing Letters of Credit) will be repaid in full,
(d) all the indebtedness under the Existing Credit Agreement of AWNA will be
repaid in full, (e) substantially all the other existing long-term indebtedness
of AWNA and BFI will remain outstanding after the Merger and (f) the Sponsors
will purchase the Sponsor Preferred Stock from Allied Waste for cash
consideration of $1,000,000,000.
AWNA has requested the Lenders to extend credit hereunder in
the form of (a) Asset Sale Term Loans on the Effective Date in an aggregate
principal amount of $1,000,000,000, (b) Tranche A Term Loans on the Effective
Date in an aggregate principal amount of $1,750,000,000, (c) Tranche B Term
Loans on the Effective Date in an aggregate principal amount of $1,250,000,000,
(d) Tranche C Term Loans on the Effective Date in an aggregate principal amount
of $1,500,000,000, (e) Tranche D Term Loans on the Effective Date in an
aggregate principal amount equal to $2,500,000,000 minus the amount, if any, of
its Senior Subordinated Notes issued on or before the Effective Date and (f)
Revolving Loans, Letters of Credit and Swingline Loans at any time and from time
to time prior to the Revolving Maturity Date in an aggregate principal amount at
any time outstanding not in excess of $1,500,000,000 (subject to the limitations
set forth herein).
<PAGE>
The proceeds of the Term Loans, together with the proceeds of
the Sponsor Preferred Stock and the Senior Subordinated Notes, are to be used
solely for (a) the payment of the Merger Consideration, (b) the payment of fees
and expenses payable in connection with the Transactions, (c) the repayment of
the Existing Credit Facility, the BFI Credit Facility and commercial paper of
BFI and (d) the repayment of severance and termination obligations of BFI in
connection with the Merger. The proceeds of Revolving Loans and Swingline Loans
are to be used for general corporate purposes, including working capital, to
make payments, if any, arising out of the exercise by BFI stockholders of their
appraisal rights in connection with the Merger and to finance Permitted
Acquisitions, Investments permitted by Section 6.05A and 6.05B and Capital
Expenditures.
The Senior Lenders, Tranche D Lenders and the Swingline Lender
are willing to extend such credit and the Issuing Banks are willing to issue
Letters of Credit on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"A, B and C Term Borrowings" means Tranche A Term Borrowings,
Tranche B Term Borrowings and Tranche C Term Borrowings.
"A, B and C Term Commitments" means Tranche A Commitments,
Tranche B Commitments and Tranche C Commitments.
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Acquired Business" means (a) any Person substantially all of
the capital stock or other ownership interests of which is acquired after the
date hereof by Allied Waste and/or a Subsidiary and (b) any assets constituting
a discrete business or operating unit acquired on or after the date hereof by
Allied Waste or a Subsidiary, in each case in accordance with the terms of this
Agreement.
"Acquired Indebtedness" means Indebtedness of an Acquired
Business outstanding on the date such Acquired Business was acquired by Allied
Waste and/or one of its Subsidiaries.
"Acquisition Consideration" means, with respect to any
acquisition, the aggregate amount of consideration paid by the members of the
Allied Group in connection therewith, including, without limitation (but without
duplication):
(1) the aggregate amount of cash paid and the aggregate fair
market value of noncash property delivered by members of the Allied
Group in connection with such acquisition;
(2) the aggregate amount of Indebtedness and other liabilities
retained by the Acquired Business; and
(3) the aggregate amount of Indebtedness and other liabilities
of the Acquired Business or the Sellers thereof (other than those
referred to in clause (2) above) assumed by the members of the Allied
Group, in connection with such acquisition.
<PAGE>
but in any event excluding (x) common stock, Preferred Stock (other than
Cash-Pay Preferred Stock) and other Non-Cash-Pay Equity Interests issued by
Allied Waste in connection with such acquisition, (y) payment obligations of
members of the Allied Group based on post-acquisition performance of the
Acquired Business and (z) liabilities for which members of the Allied Group have
received indemnification or other financial assurances from or on behalf of the
transferor (so long as the obligors on such indemnification or other financial
assurances are, in the reasonable opinions of the Administrative Agent and the
Borrower, creditworthy).
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder and as Collateral
Agent for the Senior Lenders hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Allied Group" means, collectively, Allied Waste and Allied
Waste's Restricted Subsidiaries (including, without limitation, the Borrower and
its subsidiaries that are Restricted Subsidiaries), and a "member" of the Allied
Group means Allied Waste and each of Allied Waste's Restricted Subsidiaries. For
purposes of the representations and warranties made herein on (and the
conditions to borrowing on) the Effective Date, the term "Allied Group" includes
each of BFI and its subsidiaries.
"Allied Guarantee" means a supplemental indenture, in
substantially the form approved by the Administrative Agent, pursuant to which
AWNA and Allied Waste Guarantee the BFI Indenture Debt.
"Allied Waste" means Allied Waste Industries, Inc., a Delaware
corporation.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate.
"Apollo" means Apollo Management IV, L.P or its Permitted
Transferees (exclusive of the Allied Group).
<PAGE>
"Applicable Margin" means, for any day (a) with respect to any
Asset Sale Term Loan, the applicable Asset Sale Term Loan Margin, (b) with
respect to any Tranche B Term Loan, the applicable Tranche B Margin, (c) with
respect to any Tranche C Term Loan, the applicable Tranche C Margin, (d) with
respect to any Tranche D Loan, the applicable Tranche D Margin, and (e) with
respect to any ABR Loan or Eurodollar Loan that is a Revolving Loan or a Tranche
A Term Loan, the applicable interest rate margin per annum set forth below under
the caption "ABR Spread" or "Eurodollar Spread", as the case may be, based upon
the Leverage Ratio as of the most recent determination date; provided that the
ABR Spread relating to Swingline Loans, whenever such Leverage Ratio is in
Category 2, 3 or 4, will be .25% lower than the ABR Spread reflected in the
table below and whenever such Leverage Ratio is in Category 5, will be 0%;
provided, further, that until the later of (i) the delivery pursuant to Section
5.04A(b) of Allied Waste's Consolidated financial statements for the fiscal
quarter ending March 31, 2000 and (ii) the repayment in full of the Asset Sale
Term Loans, the "Applicable Margin" for purposes of this clause (e) shall be the
applicable rate per annum set forth below in Category 1:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------=====================================
ABR Eurodollar
Leverage Ratio: Spread Spread
- ----------------------------------------------------------------------=====================================
- ----------------------------------------------------------------------=====================================
Category 1
<S> <C> <C>
Greater than or equal to 5.00 to 1.00 1.50% 2.50%
- ----------------------------------------------------------------------=====================================
- ----------------------------------------------------------------------=====================================
Category 2
Greater than or equal to 4.50 to 1.00 but 1.25% 2.25%
less than 5.00 to 1.00
Category 3
Greater than or equal to 4.00 to 1.00 but 1.00% 2.00%
less than 4.50 to 1.00
Category 4
Greater than or equal to 3.50 to 1.00 but 0.75% 1.75%
less than 4.00 to 1.00
Category 5
Greater than or equal to 3.00 to 1.00 but 0.375% 1.375%
less than 3.50 to 1.00
Category 6
Less than 3.00 to 1.00 0% 1.00%
- ----------------------------------------------------------------------=====================================
</TABLE>
For purposes of the foregoing, (i) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Borrower's fiscal year
based upon Allied Waste's Consolidated financial statements delivered pursuant
to Section 5.04A(a) or (b) and (ii) each change in the Applicable Margin
resulting from a change in the Leverage Ratio shall be effective during the
period commencing on and including the date of delivery to the Administrative
Agent of such consolidated financial statements indicating such change and
ending on the date immediately preceding the effective date of the next such
change; provided that the Leverage Ratio shall be deemed to be in Category 1 (A)
at any time that an Event of Default has occurred and is continuing or (B) at
the option of the Administrative Agent or at the request of the Required Lenders
if the Borrower fails to deliver the Consolidated financial statements required
to be delivered by it pursuant to Section 5.04A(a) or (b), during the period
from and including the last date for timely delivery thereof (without regard to
any applicable grace period) until the date on which such Consolidated financial
statements are delivered.
<PAGE>
"Applicable Percentage" means, with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment. If the Revolving Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day, with respect to the
commitment fees payable hereunder, the applicable rate per annum set forth below
under the caption "Commitment Fee Rate", based upon the Leverage Ratio as of the
most recent determination date; provided that until the later of (i) the
delivery pursuant to Section 5.04A(b) and 5.04B(b) of Allied Waste's
Consolidated financial statements for the fiscal quarter ending March 31, 2000
and (ii) the repayment in full of the Asset Sale Term Loans, the "Applicable
Rate" shall be the applicable rate per annum set forth below in Category 1:
<TABLE>
<CAPTION>
- ------------------------------------------------------ ====================================================
Leverage Ratio: Commitment Fee Rate
- ------------------------------------------------------ ====================================================
- ------------------------------------------------------ ====================================================
Category 1
<S> <C>
Greater than or equal to 4.00 to 1.00 0.50%
- ------------------------------------------------------ ====================================================
- ------------------------------------------------------ ====================================================
Category 2
Greater than or equal to 3.00 to 1.00 but less than 0.375%
4.00 to 1.00
- ------------------------------------------------------ ====================================================
- ------------------------------------------------------ ====================================================
Category 3
Less than 3.00 to 1.00 0.25%
- ------------------------------------------------------ ====================================================
</TABLE>
For purposes of the foregoing, (i) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Borrower's fiscal year
based upon Allied Waste's Consolidated financial statements delivered pursuant
to Section 5.04A(a) or (b) and Section 5.04B(a) or (b) and (ii) each change in
the Applicable Rate resulting from a change in the Leverage Ratio shall be
effective during the period commencing on and including the date of delivery to
the Administrative Agent of such consolidated financial statements indicating
such change and ending on the date immediately preceding the effective date of
the next such change; provided that the Leverage Ratio shall be deemed to be in
Category 1 (A) at any time that an Event of Default has occurred and is
continuing or (B) at the option of the Administrative Agent or at the request of
the Required Lenders if the Borrower fails to deliver the Consolidated financial
statements required to be delivered by it pursuant to Section 5.04A(a) or (b)
and Section 5.04B(a) or (b), during the period from and including the last date
for timely delivery thereof (without regard to any applicable grace period)
until the date on which such Consolidated financial statements are delivered.
"Asset Disposition" by any Person that is the Borrower or any
Restricted Subsidiary means any transfer, conveyance, sale, lease or other
disposition by the Borrower 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 the Restricted Subsidiary ceases to
be a Restricted Subsidiary of such Person, of:
(1) shares of Equity Interests, other than directors' qualifying shares, or
other ownership interests of a Restricted Subsidiary;
(2) the property or assets of such Person or any Restricted Subsidiary
representing a division or line or business; or
<PAGE>
(3) other assets or rights of such Person or any Restricted Subsidiary
outside of the ordinary course of business.
Notwithstanding the preceding, the following items shall not be deemed to be an
Asset Disposition:
(1) a disposition by a Subsidiary of such Person to such Person or a
Restricted Subsidiary or by such Person to a Restricted Subsidiary;
(2) the disposition of all or substantially all of the assets of the
Borrower in a manner permitted pursuant to the provisions described under
Section 6.06B; and
(3) any disposition that constitutes a Restricted Payment that is permitted
pursuant to Section 6.08A or Permitted Investment that is permitted
pursuant to the provisions under Section 6.05B.
"Asset Sale" means any sale, lease, assignment, transfer or
other disposition of any property (whether now owned or hereafter acquired,
whether in one transaction or a series of related transactions and whether by
way of merger or otherwise) by any member of the Allied Group, including,
without limitation, any such sale, assignment, transfer or other disposition of
any capital stock or other ownership interests of any of Allied Waste's
Subsidiaries and any sale or securitization of accounts receivable (other than
assignments of accounts receivable for purposes of collection in the ordinary
course of business), but excluding dispositions of obsolete inventory or
equipment and sales of inventory and equipment, in each case, in the ordinary
course of business.
"Asset Sale Term Loan" means a Loan made pursuant to clause
(a) of Section 2.01.
"Asset Sale Term Loan Commitment" means, with respect to each
Senior Lender, the commitment, if any, of such Senior Lender to make an Asset
Sale Term Loan hereunder on the Effective Date, expressed as an amount
representing the maximum principal amount of the Asset Sale Term Loan to be made
by such Lender hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.08 and (b) reduced or increased from time to time
pursuant to assignments by or to such Senior Lender pursuant to Section 9.04.
The initial amount of each Senior Lender's Asset Sale Term Loan Commitment is
set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Senior Lender shall have assumed its Asset Sale Term Loan Commitment,
as applicable. The initial aggregate amount of the Senior Lenders' Asset Sale
Term Loan Commitments is $1,000,000,000.
"Asset Sale Term Loan Margin" means, with respect to any Asset
Sale Term Loan, (a) 1.50% per annum, in the case of an ABR Loan, or (b) 2.50%
per annum, in the case of a Eurodollar Loan.
"Asset Sale Term Loan Maturity Date" means the date that is
two years after the Effective Date.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Senior Lender and an assignee (with the consent of any party
whose consent is required by Section 9.04), and accepted by the Administrative
Agent, in the form of Exhibit A or any other form approved by the Administrative
Agent.
"AWNA" means the Borrower.
<PAGE>
"AWNA Senior Note Indenture" means the Indenture dated as of
December 23, 1998, among AWNA, Allied Waste, various Subsidiaries, and U.S. Bank
Trust National Association, as Trustee, including all supplements thereto, as in
effect on the date hereof, and as thereafter amended in accordance with the
provisions of this Agreement.
"AWNA Senior Notes" means the senior notes of AWNA issued
prior to the date hereof pursuant to the AWNA Senior Note Indenture in an
aggregate outstanding principal amount of approximately $1,700,000,000.
"Bank Indebtedness" means any and all amounts payable under or
in respect of this Agreement and the other Loan Documents in respect of the
Senior Obligations and the Refinancing Indebtedness with respect thereto, as
amended from time to time, including principal, premium, (if any), interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Borrower whether or not a claim
for post-filing interest is allowed in such proceedings), fees, charges,
expenses, reimbursement obligations, guarantees and all other amounts payable
thereunder or in respect thereof.
"BFI" means Browning-Ferris Industries, Inc., a Delaware
corporation and the surviving corporation in the Merger.
"BFI Credit Facility" means (i) the Second Amended and
Restated Revolving Credit Agreement (the "BFI Credit Agreement"), dated as of
May 31, 1995 and amended by the First Amendment to the Second Amended and
Restated Revolving Credit Agreement as of March 31, 1998, among BFI, the
Continuing Banks, the New Banks and the Retiring Banks named therein, the
Co-Agents, Credit Suisse First Boston, as Documentation Agent, Chase Bank of
Texas, N.A., as Administrative Agent, and Chase Manhattan Bank, as Auction
Administrative Agent, and (ii) the Amended and Restated Multicurrency Revolving
Credit Agreement (the "BFI Multicurrency Agreement"), dated as of December 26,
1996 and amended by the First Amendment to the Amended and Restated
Multicurrency Revolving Credit Agreement as of December 26, 1997 and by the
Second Amendment to the Amended and Restated Multicurrency Revolving Credit
Agreement as of March 31, 1998, among BFI, the banks and other financial
institutions listed therein and Credit Suisse First Boston, as Administrative
Agent.
"BFI Indenture" means the Restated Indenture dated as of
September 1, 1991, between BFI and Chase Bank of Texas, N.A., as successor
trustee to First City Texas-Houston, N.A., including all supplements, amendments
and modifications thereto, as in effect on the date hereof, and as hereafter
amended in accordance with the provisions of this Agreement.
"BFI Indenture Debt" means the senior notes of BFI issued
pursuant to the BFI Indenture and outstanding on the date hereof. The aggregate
amount of the BFI Indenture Debt on the date hereof is approximately
$1,450,000,000.
<PAGE>
"Blackstone" means the collective reference to (i) Blackstone
Capital Partners III Merchant Banking Fund L.P., a Delaware limited partnership,
Blackstone Capital Partners II Merchant Banking Fund L.P., a Delaware limited
partnership, Blackstone Offshore Capital Partners III L.P., a Cayman Islands
limited partnership, Blackstone Offshore Capital Partners II L.P., a Cayman
Islands limited partnership, Blackstone Family Investment Partnership III L.P.,
a Delaware limited partnership, and Blackstone Family Investment Partnership II
L.P., a Cayman Islands limited partnership (each of the foregoing, a "Blackstone
Fund") and (ii) each Affiliate of any Blackstone Fund that is not an operating
company or Controlled by an operating company and each general partner of any
Blackstone Fund or any Blackstone Affiliate who is a partner or employee of The
Blackstone Group L.P.
"Blockage Notice" shall have meaning assigned thereto in
Section 10.03.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means Allied Waste North America, Inc., a Delaware
corporation.
"Borrowing" means (a) Loans (and with respect to the Tranche D
Loans, for purposes of Section 2.10 and 2.11, such term will be deemed to
include, after the first anniversary of the Effective Date, any outstanding
Indebtedness evidenced by the Exchange Notes) of the same Class and Type made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Swingline Loan.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City or Phoenix, Arizona are
authorized or required by law to remain closed; provided that, when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
<PAGE>
"Capital Expenditures" means, for any period, expenditures
(including the aggregate amount of Capital Lease Obligations incurred during
such period) made by Allied Waste or any of its Subsidiaries to acquire or
construct fixed assets, plant and equipment (including renewals, improvements
and replacements, but excluding repairs unless such repairs are required to be
capitalized in accordance with GAAP) during such period computed in accordance
with GAAP; provided that Capital Expenditures shall not include (a) expenditures
classified as Permitted Acquisitions, (b) expenditures made by an Acquired
Business prior to the time such Acquired Business was acquired by Allied Waste
or any of its Subsidiaries pursuant to a Permitted Acquisition, (c) expenditures
made with the proceeds of condemnation awards or insurance for fixed assets,
plant and equipment, (d) expenditures made to consummate the Transactions, (e)
expenditures to acquire capital assets made with the proceeds of Asset Sales not
required to be applied to the mandatory prepayment of Loans hereunder, (f)
interest capitalized during such period, (g) expenditures that are accounted for
as capital expenditures of such Person and that actually are paid for by a third
party (excluding Allied Waste or any Subsidiary) and for which neither Allied
Waste nor any Subsidiary has provided or is required to provide or incur,
directly or indirectly, any consideration or obligation to such third party or
any other person (whether before, during or after such period), (i) the book
value of any asset owned by such Person prior to or during such period to the
extent such book value is included as a capital expenditure during such period
as a result of such person reusing or beginning to reuse such asset during such
period without a corresponding expenditure actually having been made in such
period; provided that any expenditure necessary in order to permit such asset to
be reused shall be included as a Capital Expenditure during the period that such
expenditure actually is made and such book value shall have been included in
Capital Expenditures when such asset was originally acquired and (j)
expenditures made to purchase the BFI headquarters building pursuant to
contractual obligations in existence on the date hereof, provided that the Net
Available Proceeds of any resale of such building are applied to repay Loans in
accordance with Sections 2.10 and 2.11 hereof.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Equivalents" means Permitted Investments.
"Cash-Pay Preferred Stock" means Preferred Stock (i) that
requires periodic payment of cash dividends or (ii) that the issuer thereof has
undertaken to redeem for cash at a fixed or determinable date or dates prior to
the date that is six months after the Tranche C Maturity Date, whether by
operation of a sinking fund or otherwise, or upon the occurrence of a condition
not solely within the control of the issuer (other than the existence of a
condition requiring the issuer to redeem such Preferred Stock upon the
occurrence of a change of control of the issuer or any of its affiliates) or
(iii) is redeemable for cash on any date prior to the date that is six months
after the Tranche C Maturity Date at the option of the holder thereof.
"Casualty Event" means, with respect to any property of any
Person, any loss of or damage to, or any condemnation or other taking of, such
property for which such Person or any of its subsidiaries receives insurance
proceeds, proceeds of a condemnation award or other compensation.
"Change in Control" means:
(a) any Person or group (other than Apollo or Blackstone)
(within the meaning of Rule 13d-5 promulgated under the Securities
Exchange Act of 1934 as in effect on the date hereof) shall have
acquired directly or indirectly, beneficial ownership of shares
representing more than 35% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of Allied
Waste;
(b) Allied Waste is merged, consolidated or reorganized into
or with another corporation or other Person, and as a result of such
merger, consolidation or reorganization, less than a majority of the
combined voting power of the then outstanding securities of Allied
Waste immediately after such transaction is held in the aggregate by
the holders of Allied Waste Voting Stock immediately prior to such
transaction (where "Allied Waste Voting Stock" means outstanding
securities of Allied Waste entitled to vote generally in the election
of directors of Allied Waste); or
(c) a majority of the seats (other than vacant seats) on the
board of directors of Allied Waste shall at any time be occupied by
Persons who were neither nominated by the board of directors of Allied
Waste nor appointed by directors so nominated; or
<PAGE>
(d) any change in control (or similar event, however
denominated) with respect to Allied Waste or the Borrower shall occur
under and as defined in any indenture or agreement in respect of
Indebtedness in an aggregate principal amount in excess of $50,000,000;
or
(e) Allied Waste shall cease to own and control, directly,
beneficially and of record, 100% of the outstanding capital stock of
the Borrower, free and clear of all Liens (other than Liens under the
Non-Shared Collateral Pledge Agreement).
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such
Lender or by such Lender's or Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans, Asset Sale Term Loans, Tranche A Term Loans, Tranche B Term
Loans, Tranche C Term Loans, Tranche D Loans or Swingline Loans and, when used
in reference to any Commitment, refers to whether such Commitment is a Revolving
Commitment, Asset Sale Term Loan Commitment, Tranche A Commitment, Tranche B
Commitment, Tranche C Commitment or Tranche D Commitment.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means any and all "Collateral" as defined in the
Non-Shared Collateral Security Agreement or "Collateral" as defined in the
Shared Collateral Security Agreement.
"Collateral Agent" means The Chase Manhattan Bank in its
capacity as collateral agent or collateral trustee under the Loan Documents.
"Collateral Trust Agreement" means the Collateral Trust
Agreement, substantially in the form of Exhibit C, among BFI, Subsidiary Loan
Parties that are Subsidiaries of BFI and the Collateral Trustee for the benefit
of the Shared Collateral Secured Parties.
"Collateral Trustee" means The Chase Manhattan Bank in its
capacity as collateral trustee under the Collateral Trust Agreement, the Shared
Collateral Pledge Agreement and the Shared Collateral Security Agreement.
"Commitment" means the Senior Commitments and the Tranche D
Commitments, or any combination thereof (as the context requires).
"Confidential Information Memorandum" means the Confidential
Information Memorandum of Allied Waste and the Borrower dated April, 1999,
provided to prospective Lenders in connection with the syndication of the
Commitments.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
<PAGE>
"Consolidated EBITDA" means, for any period, Consolidated Net
Income of Allied Waste and its Restricted Subsidiaries, determined without
giving effect to any extraordinary gains included in determining Consolidated
Net Income for such period, plus, without duplication and to the extent deducted
in determining such Consolidated Net Income, the sum of (a) the aggregate amount
of Consolidated Interest Expenses for such period, (b) the aggregate amount of
income tax expense for such period, (c) all amounts attributable to depreciation
and amortization for such period, (d) all non-cash non-recurring charges during
such period, including charges in respect of costs related to Permitted
Acquisitions (it being understood that (i) non-cash non-recurring charges shall
not include accruals for closure and post-closure liabilities and (ii) charges
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; provided that, for purposes of this clause (d), Allied
Waste shall be required to monitor actual cash disbursements only for those
non-cash charges that exceed $1,000,000 individually and $10,000,000 in the
aggregate in any fiscal year), (e) all cash charges attributable to consummation
of the Transactions during such period, (f) non-recurring management fees paid
to Apollo and Blackstone and (g) all non-recurring cash charges incurred in
connection with Permitted Acquisitions, Investments permitted under Sections
6.05(A)(a), (h) or (i) or Sections 6.05B(a), (h) or (i) and Indebtedness
permitted under Section 6.01A or Section 6.01B, and minus, without duplication
and to the extent added to revenues in determining Consolidated Net Income for
such period, all non-cash non-recurring gains during such period, all as
determined on a Consolidated basis with respect to Allied Waste and the
Restricted Subsidiaries. For purposes of Section 6.13A and 6.14A, if the
Borrower or any of its Restricted Subsidiaries acquires any Acquired Business
during any Rolling Period, Consolidated EBITDA for such Rolling Period will be
determined on a pro forma basis as if such Acquired Business were acquired on
the first day thereof. In determining the pro forma adjustments to Consolidated
EBITDA to be made with respect to any Acquired Business for periods prior to the
acquisition date thereof, actions taken by the Borrower and its Restricted
Subsidiaries prior to the first anniversary of the related acquisition date that
result in cost savings with respect to such Acquired Business will be deemed to
have been taken on the first day of the Rolling Period for which Consolidated
EBITDA is being determined (with the intent that such cost savings be
effectively annualized by extrapolation from the demonstrated cost savings since
the related acquisition date). Such pro forma adjustments will be subject to
delivery to the Administrative Agent of a certificate of a Financial Officer of
the Borrower; such certificates may be delivered with respect to any Acquired
Business at any time after the last day of the first fiscal quarter of the
Borrower to end after the related acquisition date and may be delivered
quarterly (but only once per fiscal quarter with respect to each Acquired
Business). Each such certificate shall be accompanied by supporting information
and calculations demonstrating the actual cost savings with respect to such
Acquired Business and such other information as any Lender, through the
Administrative Agent, may reasonably request.
"Consolidated Interest Expense" means, for any period, the
sum, for Allied Waste and its Restricted Subsidiaries (determined on a
Consolidated basis without duplication), of the following:
(a) all interest in respect of Indebtedness (including the
interest component of any payments in respect of Capital Lease
Obligations) accrued or capitalized during such period (whether or not
actually paid during such period), net of interest income; plus
<PAGE>
(b) the net amount due and payable (or minus the net amount
receivable) under Hedging Agreements during such period (whether or not
actually paid or received during such period); plus
(c) all fees payable to Issuing Banks in respect of Letters of
Credit accrued during such period (whether or not actually paid during
such period); plus
(d) all cash dividends accrued during such period (whether or
not actually paid during such period) in respect of Cash-Pay Preferred
Stock of members of the Allied Group other than any such accruals of
cash dividends with respect to Cash-Pay Preferred Stock that has not
yet commenced payment of cash dividends and in respect of which no
declaration of such dividend has occurred in such period or is
anticipated to occur in the next ensuing fiscal quarter; plus
(e) all cash dividends paid during such period in respect of
Cash-Pay Preferred Stock of members of the Allied Group, to the extent
accruals of such dividends were not included as "Consolidated Interest
Expense" in such period or prior periods pursuant to clause (d) above,
provided that "Consolidated Interest Expense" shall not include any interest
expense accrued and not paid or payable in cash in respect of Non-Cash-Pay
Indebtedness.
"Consolidated Net Income" means, for any Person for any
period, the net income (or loss) after provision for taxes and before any
pay-in-kind or non-cash accumulating dividend on preferred stock of such Person
and its subsidiaries determined on a Consolidated basis for such period taken as
a single accounting period.
"Consolidated Total Assets" means, as at any date of
determination, the aggregate amount of assets reflected on the Consolidated
balance sheet of the Allied Group prepared in accordance with GAAP most recently
delivered to the Administrative Agent pursuant to Section 5.04 on or prior to
such date of determination.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Cure Amount" has the meaning specified in Section 7.02.
"Cure Right" has the meaning specified in Section 7.02.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Designated Noncash Consideration" means the fair market value
of noncash consideration received by the Borrower or one of its Restricted
Subsidiaries in connection with an Asset Disposition that is so designated as
Designated Noncash Consideration pursuant to a certificate of a Financial
Officer, setting forth the basis of such valuation, less the amount of cash or
Cash Equivalents received in connection with a sale of such Designated Noncash
Consideration.
<PAGE>
"Designated Senior Indebtedness" means (i) the Bank
Indebtedness and (ii) any other Senior Indebtedness which, at the date of
determination, has an aggregate principal amount of, or under which, at the date
of determination, the holders thereof are committed to lend up to, at least
$50,000,000 and is specifically designated by the Borrower in the instrument
evidencing or governing such Senior Indebtedness as "Designated Senior
Indebtedness" for purposes of this Agreement.
"Designation" shall have the meaning assigned to such term in
Section 6.16A.
"dollars" or "$" refers to lawful money of the United States
of America.
"Domestic Subsidiary" means a Restricted Subsidiary organized
under the laws of the United States of America, any State thereof or the
District of Columbia.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
9.02).
"Environment" means ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, any building, structure or fixture, or as otherwise defined
in any Environmental Law.
"Environmental Claim" means any written accusation,
allegation, notice of violation, claim, demand, order, directive, cost recovery
action or other cause of action by, or on behalf of, any Governmental Authority
or any Person, in any such case for or relating to damages, injunctive or
equitable relief, personal injury (including sickness, disease or death),
remedial action costs, tangible or intangible property damage, natural resource
damages, nuisance, pollution, investigation, closure and post-closure care of
any landfill, any adverse effect on the environment caused by any Hazardous
Material, or for fines, penalties or restrictions, resulting from or based upon
(a) the threat, the existence, or the continuation of the existence, of a
Release (including sudden or nonsudden, accidental or nonaccidental Releases),
(b) exposure to any Hazardous Material, (c) the presence, use, handling,
transportation, storage, treatment or disposal of any Hazardous Material or (d)
the violation or alleged violation of any Environmental Law or Environmental
Permit.
<PAGE>
"Environmental Law" means any and all applicable
present and future treaties, laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices, legally binding agreements or
published and legally binding guidance documents issued, promulgated or entered
into by any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the treatment, storage,
disposal, management, Release or threatened Release of any Hazardous Material or
to health and safety matters, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. ss.ss.
9601 et seq. (collectively "CERCLA"), the Solid Waste Disposal Act, as amended
by the Resource Conservation and Recovery Action of 1976 and Hazardous and Solid
Waste Amendments of 1984, 42 U.S.C. ss.ss. 6901 et seq., the Federal Water
Pollution Control Act, as amended, 33 U.S.C. ss.ss. 1251 et seq., the Clean Air
Act of 1970, as amended, 42 U.S.C. ss.ss. 7401 et seq., the Toxic Substances
Control Act of 1976, 15 U.S.C. ss.ss. 2601 et seq., the Occupational Safety and
Health Act of 1970, as amended, 29 U.S.C. ss.ss. 651 et seq., the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. ss.ss. 11001 et
seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. ss.ss. 300(f)
et seq., the Hazardous Materials Transportation Act, 49 U.S.C. ss.ss. 5101 et
seq., and all amendments or regulations promulgated under any of the foregoing.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of Allied Waste, the Borrower or
any Subsidiary directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the Release or threatened Release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"Environmental Permit" means any permit, approval,
authorization, certificate, license, variance, filing or permission required by
or from any Government Authority pursuant to any Environmental Law.
"Equity Interests" means, with respect to any Person, shares
of capital stock, partnership interests, membership interests in a limited
liability company, beneficial interests in a trust or other equity ownership
interests issued by such Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA; provided that no
ERISA Event shall be "outstanding" on any date on which such ERISA Event has
been corrected.
<PAGE>
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" means Senior Event of Default and Tranche D
Event of Default.
"Excess Cash Flow" means with respect to Allied Waste and its
Subsidiaries on a Consolidated basis for any fiscal year, the excess of (a) the
sum (without duplication) of (i) Consolidated Net Income of Allied Waste and its
Restricted Subsidiaries for such fiscal year, (ii) total interest expense
(whether cash or non-cash) to the extent deducted in determining Consolidated
Net Income, (iii) provisions for taxes to the extent deducted in determining
Consolidated Net Income, (iv) the amount of all depreciation expense,
amortization expense and other non-cash charges to the extent deducted in
determining Consolidated Net Income, (v) all Net Available Proceeds (other than
those the Borrower is permitted to retain pursuant to Section 2.10 and 2.11)
received by Allied Waste and its Restricted Subsidiaries during such fiscal year
to the extent not included in Consolidated Net Income, (vi) all extraordinary
gains resulting in receipt of cash by the Allied Group during such fiscal year
not otherwise included in determining Consolidated Net Income for such fiscal
year, and (vii) an amount equal to any decrease in Net Working Capital during
such fiscal year over (b) the sum, without duplication, of (i) taxes paid or
payable during such fiscal year, (ii) Consolidated Interest Expense paid or
payable in cash during such fiscal year, (iii) Capital Expenditures made in cash
and in accordance with Section 6.15A and 6.15B or funded with Net Available
Proceeds during such fiscal year, (iv) expenditures made in cash for Permitted
Acquisitions and for Investments permitted under Section 6.05A(h), (i) and (l)
and 6.05B(h),(i) and (l) during such fiscal year to the extent not made from the
proceeds of any Indebtedness, (v) scheduled and mandatory principal repayments
of Indebtedness made by Allied Waste and its Restricted Subsidiaries during such
fiscal year, (vi) optional and mandatory prepayments of the principal of Loans
during such period, but only to the extent that such prepayments cannot by their
terms be reborrowed or redrawn and do not occur in connection with a refinancing
of all or any portion of such Loans, (vii) an amount equal to any increase in
Net Working Capital during such fiscal year, (viii) dividends or other
distributions made by Allied Waste in cash during such fiscal year that are
permitted by 6.08A and 6.08B and (ix) to the extent included in determining
Consolidated Net Income, all extraordinary gains that did not result in receipt
of cash by the Allied Group during such fiscal year.
"Exchange Note" means the senior subordinated notes
substantially in the form attached as an exhibit to the Exchange Note Indenture.
"Exchange Note Holders" means holders of the Exchange Notes.
"Exchange Note Indenture" means an indenture between the
Borrower and a trustee substantially in the form of Exhibit D hereto (with such
changes therein as the Administrative Agent and the Borrower shall approve)
provided, that such changes do not materially adversely affect the Senior
Lenders, as the same may at any time be amended, modified and supplemented.
<PAGE>
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender, any Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) any taxes
(including franchise taxes and taxes imposed on (or measured by) net income,
receipts or capital) imposed as a result of a connection between such recipient
and the jurisdiction imposing such tax, including, without limitation, any
connection arising from such recipient being or having been a citizen,
domiciliary or resident of such jurisdiction, being organized in such
jurisdiction, or having or having had a permanent establishment or fixed place
of business therein, but excluding any such connection arising solely from the
activities of such recipient pursuant to or in respect of this Agreement or
under any other Loan Document, including executing, delivering or performing its
obligations or receiving a payment under, or enforcing, this Agreement or any
other Loan Document and (b) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 2.19(b)), any tax
that (i) arises other than as a result of a Change in Law subsequent, in the
case of each Foreign Lender, to the date such Foreign Lender becomes a party to
this Agreement, except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to any
withholding tax pursuant to Section 2.17(a), or (ii) is attributable to such
Foreign Lender's failure to comply with Section 2.17(e).
"Existing Credit Agreement" means the Credit Agreement dated
as of June 18, 1998 among the Borrower, Allied Waste, the lenders party thereto,
the agents party thereto, Citibank, N.A., as Issuing Bank, and Citicorp USA,
Inc., as Administrative Agent, as amended and in effect on the date hereof.
"Existing Letter of Credit" means each letter of credit
previously issued for the account of, or guaranteed by, the Borrower, BFI or a
Domestic Subsidiary that (a) is outstanding on the Effective Date and (b) is
listed on Schedule 2.05 and any letter of credit issued in replacement or
renewal thereof prior to the Effective Date, provided that the Administrative
Agent is notified of such renewal or replacement on or prior to the Effective
Date.
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower.
"Financial Performance Covenants" means the covenants set
forth in Sections 6.13A and 6.14A.
"Foreign Lender" means any Lender that is not a United States
person within the meaning of Section 7701(a)(30) of the Code.
"Foreign Subsidiary" means any Restricted Subsidiary that is
not a Domestic Subsidiary.
"GAAP" means generally accepted accounting principles in the
United States of America.
<PAGE>
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such
Indebtedness or other obligation, (b) to purchase or lease property, securities
or services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness or obligation; provided
that the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business.
"Guarantee Agreements" means the Parent Guarantee Agreement,
the Subsidiary Guarantee Agreement, the Subordinated Parent Guarantee Agreement
and the Subordinated Subsidiary Guarantee Agreement.
"Hazardous Materials" means all explosive or radioactive
substances or wastes; hazardous or toxic substances or wastes; pollutants; and
solid, liquid or gaseous wastes, including petroleum or petroleum distillates,
asbestos or asbestos-containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all substances, wastes, pollutants and materials of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement" means any Interest Rate Protection
Agreement or commodity price protection agreement or other commodity price
hedging arrangement.
"Inactive Subsidiary" has the meaning specified in Section
3.08(c).
<PAGE>
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property or assets acquired by such Person, (d) all
obligations of such Person in respect of the deferred purchase price of property
or services (excluding current accounts payable and accrued obligations incurred
in the ordinary course of business and waste disposal based royalties), (e) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances, (j)
all net payment obligations of such Person in respect of Hedging Agreements, and
(k) all fixed obligations of such Person to pay a determined amount with respect
to Cash Pay-Preferred Stock issued by such Person. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes and
Other Taxes.
"Indemnitee" has the meaning specified in Section 9.03(b).
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit E-1, among the Borrower, the Subsidiary Loan Parties and the
Administrative Agent.
"Initial Lenders" means The Chase Manhattan Bank, Citicorp
USA, Inc. and DLJ Capital Funding, Inc. and Credit Suisse First Boston.
"Insurance Subsidiaries" means, collectively, (i) Reliant
Insurance Company and Indemnity Corporation, an insurance company organized
under the laws of the State of Vermont and, as at the Effective Date, a wholly
owned Subsidiary of the Borrower; (ii) Global Indemnity Assurance Company, an
insurance company organized under the laws of the State of Vermont and, as at
the Effective Date, a wholly owned Subsidiary of the Borrower; and (iii)
Commercial Reassurance Limited, an insurance company organized under the laws of
the Republic of Ireland and, as at the Effective Date, a wholly owned Subsidiary
of the Borrower.
"Intellectual Property" means the "Intellectual Property" as
defined in the Non-Shared Collateral Security Agreement and the "Intellectual
Property" as defined in the Shared Collateral Security Agreement
"Intercompany Agreements" means the Management Agreements
between Allied Waste and the Borrower dated November 15, 1996.
"Interest Coverage Ratio" means, as at any date, the ratio of
(a) Consolidated EBITDA for the Rolling Period most recently ended on or prior
to such date to (b) Consolidated Interest Expense for such Rolling Period.
"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing or Term Loan Borrowing in accordance
with Section 2.07.
<PAGE>
"Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
"Interest Period" means with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; provided that (i) the Borrower
may select Interest Periods of 7 or 14 days so long as no such Interest Period
ends after December 31, 1999, (ii) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless (except in the case of Interest Periods referred
to in clause (i) above) such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (iii) except in the case of Interest Periods referred
to in clause (i) above, any Interest Period that commences on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.
"Interest Rate Protection Agreement" means any interest rate
protection agreement or foreign currency exchange agreement or other interest or
currency exchange rate hedging arrangement.
"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 Equity Interests, bond, note,
debenture or other debt or equity security or evidence of Indebtedness, or any
other ownership interest (including, any option, warrant or any other right to
acquire any of the foregoing), 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 Guarantee of any obligation of or for the account of
such other Person or any direct or indirect issuance by such Person of such a
Guarantee or (iv) any other investment of cash or other property by such Person
in or for the account of such other Person.
"Issuing Bank" means (a) each of The Chase Manhattan Bank and
any issuer of an Existing Letter of Credit and any other Bank designated as an
Issuing Bank in accordance with the provisions of Section 2.05(i), in each case
its capacity as the issuer of Letters of Credit hereunder, and its successors in
such capacity as provided in Section 2.05(i) and (b) in respect of each Existing
Letter of Credit, the issuer thereof. An Issuing Bank may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of the
Issuing Bank, in which case the term "Issuing Bank" shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.
"Junior Indebtedness" means (a) Indebtedness of members of the
Allied Group in respect of Tranche D Term Loans, the Senior Subordinated Notes
and other Permitted Subordinated Debt, and (b) Indebtedness of members of the
Allied Group the payment of which is contractually subordinated to the
obligations of such members as Loan Parties hereunder.
<PAGE>
"LC Disbursement" means a payment made by an Issuing Bank
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender
at any time shall be its Applicable Percentage of the total LC Exposure at such
time.
"Lenders" means the Senior Lenders and the Tranche D Lenders.
"Letter of Credit" means any letter of credit (including each
Existing Letter of Credit) issued pursuant to this Agreement.
"Leverage Ratio" means, as at any date, the ratio of (a) Total
Indebtedness as of such date to (b) Consolidated EBITDA for the Rolling Period
most recently ended on or prior to such date, all determined on a Consolidated
basis in accordance with GAAP.
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Dow Jones Market
Screen, formerly known as Telerate Service (or on any successor or substitute
page of such Service, or any successor to or substitute for such Screen,
providing rate quotations comparable to those currently provided on such page of
such Screen, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate for
dollar deposits with a maturity comparable to such Interest Period. In the event
that such rate is not available at such time for any reason, then the "LIBO
Rate" with respect to such Eurodollar Borrowing for such Interest Period shall
be the rate at which dollar deposits of $5,000,000 and for a maturity comparable
to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset and (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention agreement
(or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset.
"Loan Documents" means this Agreement, the Security
Agreements, the other Security Documents, the Subordinated Parent Guarantee
Agreement, the Subordinated Subsidiary Guarantee Agreement and the Subordinated
Indemnity, Subrogation and Contribution Agreement, as the same may be amended,
supplemented, extended, increased or renewed from time to time.
"Loan Parties" means Allied Waste, the Borrower and the
Subsidiary Loan Parties.
<PAGE>
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement (and on or after the first anniversary of the
Effective Date, for purposes of Sections 2.10 and 2.11 with respect to the
Tranche D Loans, such term will be deemed to include any outstanding
Indebtedness evidenced by the Exchange Notes).
"Margin Stock" means "margin stock", as such term is defined
in Regulation U of the Board.
"Material Adverse Effect" means (a) a materially adverse
effect on the business, condition (financial or otherwise), operations,
performance or properties of Allied Waste and its Restricted Subsidiaries, taken
as a whole, (b) a material impairment of the ability of Allied Waste or the
Borrower to perform its obligations under the Loan Documents, (c) a material
impairment of the ability of the members of the Allied Group, taken as a whole,
to perform their collective obligations under the Loan Documents, or (d) a
material impairment of the rights of or benefits available to the Administrative
Agent and the Lenders under the Loan Documents.
"Material Agreement" means an agreement that is material to
the conduct of the business of Allied Waste and its Restricted Subsidiaries,
taken as a whole.
"Material Indebtedness" means Indebtedness (other than the
Loans and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of Allied Waste and its Restricted Subsidiaries
in an aggregate principal amount exceeding $50,000,000. For purposes of
determining Material Indebtedness, the "principal amount" of the obligations in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements with the applicable
counterparty) that Allied Waste or such Restricted Subsidiary would be required
to pay if such Hedging Agreement were terminated at such time.
"Material Lease" means a lease of Allied Waste or a Restricted
Subsidiary with respect to real property (i) having an aggregate book value of
more than $50,000,000 or (ii) providing for annual rental payments in excess of
$10,000,000.
"Material Loan Party" means Allied Waste, the Borrower, BFI
and each other Loan Party that has (i) $50,000,000 in gross revenues in any
fiscal year or (ii) $50,000,000 in total assets.
"Merger" shall have the meaning assigned to such term in the
preamble hereto.
"MergerCo" means AWIN I Acquisition Corporation, a newly
formed Delaware corporation that is a special purpose subsidiary of AWNA.
"Merger Consideration" means the cash consideration payable
pursuant to the Merger Agreement as a consequence of the Merger in respect of
outstanding Shares and options to acquire Shares, which, in the aggregate, is
approximately $7,400,000,000.
"Merger Documents" means the Merger Agreement and the other
agreements and documents entered into pursuant thereto or in connection
therewith (other than the Loan Documents and the Subordinated Debt Documents).
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
<PAGE>
"Net Available Proceeds" means:
(a) In the case of any Asset Sale, the aggregate amount of all
cash payments as and when received by the members of the Allied Group
directly or indirectly in connection with such Asset Sale; provided
that:
(1) such Net Available Proceeds shall be net of (x)
the amount of any legal, title and recording tax expenses,
commissions and other reasonable fees and expenses (including
reasonable expenses of preparing the relevant property for
sale) paid by the members of the Allied Group in connection
with such Asset Sale, (y) any Federal, state and local income
or other taxes reasonably estimated in good faith to be
payable by members of the Allied Group with respect to such
Asset Sale and (z) the aggregate amount of reserves taken by
the members of the Allied Group in accordance with GAAP
against indemnification obligations incurred by them in
connection with such Asset Sale; provided that if any such
reserves are subsequently reversed by or released to members
of the Allied Group, an amount equal to the amount of such
reversal or release shall be deemed to constitute Net
Available Proceeds;
(2) such Net Available Proceeds shall be net of any
repayments of Indebtedness and related obligations by members
of the Allied Group to the extent that (x) such Indebtedness
is secured by a Lien on the property that is the subject of
such Asset Sale and permitted by Section 6.02A and 6.02B and
(y) the transferee of (or holder of a Lien on) such property
requires that such Indebtedness be repaid as a condition to
the purchase of such property; and
(3) in the case of an Asset Sale consisting of a
substantially contemporaneous exchange (including by way of a
substantially contemporaneous purchase and sale) of discrete
assets of members of the Allied Group for one or more other
assets used for similar purposes, Net Available Proceeds shall
be net of cash payments made by members of the Allied Group in
connection with such exchange.
<PAGE>
(b) In the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation
received in cash by members of the Allied Group in respect of such
Casualty Event net of (1) reasonable cash expenses incurred by them in
connection therewith, (2) contractually required repayments of
Indebtedness and related obligations to the extent secured by a Lien on
the property suffering such Casualty Event and permitted by Section
6.02A and 6.02B and (3) any income, transfer and other taxes reasonably
estimated to be actually payable by members of the Allied Group in
respect of such Casualty Event; provided, however, that, in the case of
any Casualty Event, if the Borrower shall deliver a certificate of a
Financial Officer to the Administrative Agent at the time of such
Casualty Event setting forth the Borrower's intent to use all or a
portion of the proceeds of such Casualty Event to replace or repair the
assets that are the subject of such Casualty Event commencing within
180 days of receipt of such proceeds and no Event of Default shall have
occurred and shall be continuing at the time of such certificate or at
the proposed time of the application of such proceeds, such proceeds
shall not constitute Net Available Proceeds except to the extent not so
used within 365 days after the commencement of such repair or
replacement, at which time such proceeds shall be deemed Net Available
Proceeds.
(c) In the case of any issuance of Indebtedness or of capital
stock or other Equity Interests, the aggregate amount of all cash
received by members of the Allied Group in respect of such issuance,
net of underwriting commissions, discounts or placement fees and other
customary fees and expenses directly incurred in connection therewith.
"Net Working Capital" means, at any date, (a) the Consolidated
current assets of Allied Waste and its Restricted Subsidiaries as of such date
(excluding cash and Permitted Investments) minus (b) the Consolidated current
liabilities of Allied Waste and its Restricted Subsidiaries as of such date
(excluding current liabilities in respect of Indebtedness). Net Working Capital
at any date may be a positive or negative number. Net Working Capital increases
when it becomes more positive or less negative and decreases when it becomes
less positive or more negative.
"Non-Cash-Pay" means:
(a) with respect to any Preferred Stock, that such Preferred
Stock is not Cash-Pay Preferred Stock; and
(b) with respect to any Indebtedness or Equity Interest (other
than Preferred Stock), that such Indebtedness or Equity Interest does
not require any cash payments (whether in respect of principal,
interest, dividends, redemption or repurchase) to be made thereon or in
respect thereof on or prior to the Tranche C Maturity Date, whether by
operation of a sinking fund or otherwise.
"Non-Shared Collateral Pledge Agreement" means the Non-Shared
Collateral Pledge Agreement, substantially in the form of Exhibit F, among
Allied Waste, the Borrower, Subsidiary Loan Parties (other than BFI and its
Subsidiaries) and the Collateral Agent for the benefit of the Secured Parties.
"Non-Shared Collateral Security Agreement" means the
Non-Shared Collateral Security Agreement, substantially in the form of Exhibit
G, among the Borrower, Allied Waste, Subsidiary Loan Parties (other than BFI and
its Subsidiaries) and the Collateral Agent for the benefit of the Secured
Parties.
"Obligations" means the "Obligations" as defined in the
Non-Shared Collateral Security Agreement.
"Other Taxes" means any and all present or future recording,
stamp, documentary, excise, transfer, sales or property or similar taxes,
charges or similar levies arising from any payment made under any Loan Document
or from the execution, delivery or enforcement of, or otherwise with respect to,
any Loan Document.
"Parent Guarantee Agreement" means the Parent Guarantee
Agreement, substantially in the form of Exhibit H, made by Allied Waste in favor
of the Administrative Agent for the benefit of the Secured Parties.
"Participant" has the meaning specified in Section 9.04(e).
<PAGE>
"Payment Blockage Period" shall have the meaning assigned
thereto in Section 10.03.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificates" means certificates in the form of
Exhibit I-1 and Exhibit I-2 or any other form approved by the Collateral Agent.
"Permitted Acquisition" means one or more acquisitions by the
Borrower or any other Loan Party of a business unit (with any associated assets)
located in the United States or capital stock or other ownership interests
(other than Margin Stock) of any other Person organized under the laws of the
United States, any state thereof or the District of Columbia; provided that:
(1) in the case of an acquisition of assets, such assets are
to be used, and in the case of an acquisition of capital stock or other
ownership interests, the Person so acquired is predominately engaged
in, the same line of business as Allied Waste and its Restricted
Subsidiaries and other business activities incidental or related
thereto;
(2) the business acquired conducts its business exclusively in
the United States;
(3) in connection with any such acquisition involving a merger
of the Borrower or any Subsidiary Loan Party, (x) the Borrower or such
Subsidiary Loan Party shall be the survivor (and if any such
acquisition involves a merger of the Borrower and one of its
Subsidiaries, the Borrower shall be the survivor) and (y) after such
merger, Allied Waste shall own, directly or indirectly, beneficially
and of record, Equity Interests in such Subsidiary Loan Party
representing 100% of each of the aggregate ordinary voting power and
the aggregate equity value represented by the issued and outstanding
Equity Interests in such Subsidiary Loan party and the Borrower shall
continue to be a wholly owned Subsidiary of Allied Waste;
(4) immediately prior to and after giving effect to such
acquisition, no Default or Event of Default shall have occurred and be
continuing;
(5) in the case of an acquisition of capital stock or other
ownership interests of a Person, the Borrower or a Subsidiary Loan
Party acquires 100% of the capital stock or other ownership interests
of such Person and pledges such capital stock or other ownership
interests pursuant to a Pledge Agreement; and
(6) with respect to such acquisition, the Loan Parties
(including any Specified Subsidiary acquired in connection with such
acquisition) shall enter into Guarantee Agreements and Security
Documents pursuant to Section 5.10A with respect to the Acquired
Business (and any newly acquired Specified Subsidiary) and no
agreement, instrument, law, regulation, order or decree applicable to
such Specified Subsidiary or Acquired Business shall prohibit, restrain
or limit its ability to enter into or perform any such Guarantee
Agreement or Security Document or to pledge its assets and properties
pursuant to any Security Document.
<PAGE>
provided, however, that the prior written consent of the Required Lenders has
been obtained with respect to any such acquisition (whether effected in one
transaction or a series of related transactions) with respect to which the
aggregate Acquisition Consideration exceeds 40% of Consolidated EBITDA for the
Rolling Period ending on the last day of the most recent fiscal quarter with
respect to which financial statements have been delivered pursuant to Section
5.04A.
"Permitted Cure Security" means a Non-Cash Pay equity security
of Allied Waste.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.03A;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 90 days or are being contested in compliance with
Section 5.03A;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
incurred in the ordinary course of business;
(e) deposits securing liabilities to insurance carries under
insurance or self-insurance arrangements;
(f) judgment liens in respect of judgments or awards in
respect of which Allied Waste or its Subsidiaries are in good faith
prosecuting an appeal or proceedings for review and in respect of which
a stay of execution pending such appeal or proceedings for review shall
have been obtained; provided that Allied Waste shall have set aside on
its books adequate reserves in accordance with GAAP with respect
thereto;
(g) easements, ground leases, zoning restrictions, building
codes, rights-of-way or defects or irregularities in title and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of Allied Waste or any
Restricted Subsidiary;
(h) statutory and common law landlord liens;
(i) leases or subleases to other Persons of properties or
assets owned or leased by the Borrower or a Restricted Subsidiary; and
(j) Liens arising from the sale of overdue accounts receivable
for purposes of collection in the ordinary course of business, provided
that the term "Permitted Encumbrances" shall not include any Lien securing
Indebtedness.
<PAGE>
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) Investments in commercial paper maturing within 360 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) Investments in certificates of deposit, banker's
acceptances and time deposits maturing within one year from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000;
(d) demand deposits made in the ordinary course of business
and consistent with the Borrower'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;
(e) insured deposits issued by commercial banks of the type
described in clause (d) above;
(f) collateralized repurchase obligations with a term of not
more than 90 days for, and secured by, underlying securities of the
types described in clauses (a) through (c) above entered into with a
bank meeting the qualifications described in clause (c) above;
(g) mutual funds whose investment guidelines restrict such
funds' investments primarily to those satisfying the provisions of
clause (a) through (c) above; and
(h) other investment instruments approved in writing by the
Administrative Agent and offered by financial institutions which have a
combined capital and surplus and undivided profits of not less than
$500,000,000.
<PAGE>
"Permitted Subordinated Debt" means Indebtedness of the
Borrower (and Guarantees of such Indebtedness by Restricted Subsidiaries of the
Borrower and by Allied Waste), the payment of which is subordinated to the
Borrower's, Allied Waste's or such Restricted Subsidiary's obligations in
respect of the Senior Obligations, provided that such Permitted Subordinated
Debt (a) accrues interest at a rate determined in good faith by the board of
directors of the Borrower to be a market rate of interest for such Permitted
Subordinated Debt at the time of issuance thereof, (b) is created under
agreements or instruments that do not, as determined in good faith by the board
of directors of the Borrower, (i) impose covenants on the Borrower and the
Borrower's Subsidiaries, (ii) contain a definition of change of control or (iii)
contain events of default and other provisions, in each case materially more
restrictive than the covenants imposed in, the change of control definition used
in and the events of default and other provisions contained in this Agreement,
(c) provides that no scheduled principal payments are due on such Permitted
Subordinated Debt on any date on or prior to the Tranche C Maturity Date, (d) is
unsecured, (e) is not guaranteed by Allied Waste or any Subsidiary unless (i) in
the case of a Subsidiary, such Subsidiary also has Guaranteed the Senior
Obligations and (ii) in the case of Allied Waste or any such Restricted
Subsidiary, such Guarantee of such Permitted Subordinated Debt is subordinated
to such Guarantee of the Senior Obligations on terms no less favorable to the
Lenders than the subordination provisions of the Permitted Subordinated Debt,
(f) does not by its terms require the maintenance or achievement of any
financial performance standards more restrictive than those contained herein, as
determined in good faith by the board of directors of the Borrower, other than
as a condition to taking specified action and (g) the terms of subordination of
such Permitted Subordinated Debt are customary and reasonably satisfactory to
the Administrative Agent, the Syndication Agent and the Documentation Agents.
"Permitted Transferee" means, with respect to any Person: (a)
any Affiliate of such Person; (b) any investment manager, investment advisor, or
constituent general partner of such Person; or (c) any investment fund,
investment account, or investment entity that is organized by such Person or its
Affiliates and whose investment manager, investment advisor, or constituent
general partner is such Person or a Permitted Transferee of such Person.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreements" means the Non-Shared Collateral Pledge
Agreement and the Shared Collateral Pledge Agreement.
"Preferred Stock" means, with respect to any corporation,
capital stock issued by such corporation that is entitled to a preference or
priority, in respect of dividends or distributions upon liquidation, over some
other class of capital stock issued by such corporation.
"Preliminary OM" shall have the meaning assigned to such term
in Section 5.20B.
"Prepayment Event" means:
(a) any Asset Sale (including pursuant to a sale and leaseback
transaction) of any property or asset of Allied Waste or any Restricted
Subsidiary, other than, (i) Asset Sales effected between Loan Parties
permitted by Section 6.06A(f) and (ii) any Asset Sale (other than a
sale of Specified Assets) made after the date of this Agreement
resulting in Net Available Proceeds not exceeding $25,000,000; or
<PAGE>
(b) any Casualty Event with respect to any property or asset
of Allied Waste or any Restricted Subsidiary, to the extent that the
Net Available Proceeds thereof are not applied to rebuilding, repairing
or replacing such property or asset within 365 days of such Casualty
Event, as provided in the definition of "Net Available Proceeds";
(c) the incurrence by Allied Waste, the Borrower or any
Restricted Subsidiary of any Indebtedness for borrowed money, (other
than Refinancing Indebtedness) pursuant to (x) Section 6.01A(xii) or
(xviii), except to the extent the Net Available Proceeds thereof are
used to make Permitted Acquisitions, Investments (other than Permitted
Investments) permitted by Section 6.05A or Capital Expenditures
permitted under Section 6.15A, (y) Section 6.01A(xvi) or (z) the
issuance of the Senior Subordinated Notes; or
(d) any issuance by Allied Waste of any of its capital stock
or other Equity Interests, other than (i) issuances to the extent the
Net Available Proceeds thereof are used, within 365 days of such
issuance, to make Permitted Acquisitions, Investments (other than
Permitted Investments) permitted by Section 6.05A or Capital
Expenditures permitted by Section 6.15A, (ii) issuances of capital
stock pursuant to management compensation plans, (iii) the issuance of
capital stock pursuant to the Sponsor Preferred Stock Purchase and (iv)
any such issuance after the date hereof when no Asset Sale Term
Borrowings or Asset Sale Term Loan Commitments remain outstanding (or
to the extent that Net Available Proceeds of a portion of such issuance
are applied to the repayment of the remaining Asset Sale Term
Borrowings or the termination of the remaining Asset Sale Term Loan
Commitments, any remaining portion thereof).
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"Properties" shall have the meaning assigned to such term in
Section 3.16(a).
"Ref-Fuel" means American Ref-Fuel, a Delaware limited
liability partnership, of which Duke/UAE Ref-Fuel Management, LLC, a wholly
owned subsidiary of Duke/UAE Ref-Fuel, LLC, and BFI Ref-Fuel, Inc., a wholly
owned subsidiary of BFI, are the biggest partners, holding 50% and 49.9% of the
partnership interests, respectively.
"Refinancing Indebtedness" has the meaning specified in
Section 6.01A(a)(xiii).
"Register" has the meaning set forth in Section 9.04.
"Related Business" means a business substantially similar to
the business engaged in by the Borrower and its subsidiaries on the date hereof.
"Related Fund" means, with respect to any Lender that is a
fund that invests in bank loans, any other fund that invests in bank loans and
is advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
<PAGE>
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents, trustees and advisors of such Person and such Person's Affiliates.
"Related Person" of any Person means, without limitation, any
other Person owning:
(1) 5% or more of the outstanding Common Stock of such Person
or
(2) 5% or more of the Voting Stock of such Person.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, emanating or migrating of any Hazardous
Material in, into, onto or through the Environment.
"Relevant Percentage" means (a) if the Leverage Ratio is
greater than or equal to 4.00 to 1.00, 100%; (b) if the Leverage Ratio is less
than 4.00 to 1.00 but greater than or equal to 3.50 to 1.00, 75%; (c) if the
Leverage Ratio is less than 3.50 to 1.00 but greater than or equal to 3.00 to
1.00, 50%; (d) if the Leverage Ratio is less than 3.00 to 1.00 but greater than
or equal to 2.50 to 1.00, 25%; and (e) if the Leverage Ratio is less than 2.50
to 1.00, 0.0%; provided, however, that the Relevant Percentage shall be 100% so
long as any Asset Sale Term Loans or Asset Sale Term Loan Commitments are
outstanding; and provided, further, however, that 100% of the Net Available
Proceeds of issuances of Senior Subordinated Notes, other Permitted Subordinated
Debt or capital stock or other Equity Interests by Allied Waste or its
Subsidiaries received in respect of a Prepayment Event will be used to prepay
outstanding Tranche D Loans and Exchange Notes, if any, or to reduce Tranche D
Commitments if such issuances occur prior to the Effective Date. For purposes of
determining the Relevant Percentage in connection with any Prepayment Event
under circumstances where the proviso to the immediately preceding sentence is
inapplicable, (x) in the case of a Prepayment Event set forth in clause (a) of
the definition of "Prepayment Event", the Leverage Ratio shall be determined as
of the final day of the fiscal quarter most recently ended immediately prior to
the date of consummation of such Asset Sale; (y) in the case of a Prepayment
Event set forth in clause (b) of the definition of "Prepayment Event", the
Leverage Ratio shall be determined as of the date immediately prior to the date
of the receipt or deemed receipt of Net Available Proceeds of such event; and
(z) in the case of a Prepayment Event set forth in clause (c) or (d) of the
definition of "Prepayment Event", the Leverage Ratio shall be determined on a
pro forma basis as of the date of the relevant incurrence of Indebtedness or
issuance of Equity Interests, after giving effect to such incurrence or
issuance.
"repay the Tranche D Obligations" shall have the meaning
assigned thereto in Section 10.03.
"Representative" means the trustee, agent or representative
(if any) for an issue of Senior Indebtedness.
"Required Lenders" means the Required Senior Lenders and the
Required Tranche D Lenders.
"Required Senior Lenders" means, at any time, Senior Lenders
having Revolving Exposures, Term Loans (other than Tranche D Loans) and unused
Senior Commitments representing more than 50% of the sum of the total Revolving
Exposures, outstanding Term Loans and unused Senior Commitments at such time.
<PAGE>
"Required Tranche D Lenders" means, at any time, Tranche D
Lenders having Tranche D Term Loans and unused Tranche D Commitments
representing more than 50% of the sum of the total outstanding Tranche D Term
Loans and unused Tranche D Commitments at such time.
"Responsible Officer" means any executive officer of Allied
Waste or the Borrower (including, without limitation, any Financial Officer).
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in Allied Waste, the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancelation or termination of any Equity Interests in Allied Waste,
the Borrower or any Subsidiary or any option, warrant or other right to acquire
any such Equity Interests in Allied Waste, the Borrower or any Subsidiary.
"Restricted Subsidiary" means the Borrower, BFI and each other
Subsidiary of Allied Waste that has not been designated by the Borrower as an
Unrestricted Subsidiary pursuant to and in compliance with Section 6.16A and
Section 6.12B. On the date hereof, all Subsidiaries of Allied Waste are
Restricted Subsidiaries.
"Revolving Availability Period" means the period from and
including the Effective Date to but excluding the earlier of the Revolving
Maturity Date and the date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Senior
Lender, the commitment, if any, of such Senior Lender to make Revolving Loans
and to acquire participations in Letters of Credit and Swingline Loans
hereunder, expressed as an amount representing the maximum aggregate amount of
such Senior Lender's Revolving Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.08 and (b) reduced or increased
from time to time pursuant to assignments by or to such Senior Lender pursuant
to Section 9.04. The initial amount of each Senior Lender's Revolving Commitment
is set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Senior Lender shall have assumed its Revolving Commitment, as
applicable. The initial aggregate amount of the Senior Lenders' Revolving
Commitments is $1,500,000,000.
"Revolving Exposure" means, with respect to any Senior Lender
at any time, the sum of the outstanding principal amount of such Senior Lender's
Revolving Loans and its LC Exposure and Swingline Exposure at such time.
"Revolving Lender" means a Senior Lender with a Revolving
Commitment or, if the Revolving Commitments have terminated or expired, a Senior
Lender with Revolving Exposure.
"Revolving Loan" means a Loan made pursuant to clause (f) of
Section 2.01.
"Revolving Maturity Date" means the date that is six years
after the Effective Date.
"Rolling Period" means any period of four consecutive fiscal
quarters of Allied Waste.
<PAGE>
"Secured Parties" has the meaning assigned to such term in the
Non-Shared Collateral Security Agreement.
"Security Agreements" means the Non-Shared Collateral Security
Agreement and the Shared Collateral Security Agreement.
"Security Documents" means the Security Agreements, the
Non-Shared Collateral Pledge Agreement, the Shared Collateral Pledge Agreement,
the Parent Guarantee Agreement, the Subsidiary Guarantee Agreement, the
Indemnity, Subrogation and Contribution Agreement, the Collateral Trust
Agreement and each other security agreement or other instrument or document
executed and delivered pursuant to Section 5.10A to secure any of the
Obligations.
"Senior Commitment" means a Revolving Commitment, Asset Sale
Term Loan Commitment, Tranche A Commitment, Tranche B Commitment or Tranche C
Commitment, or any combination thereof (as the context requires).
"Senior Default" means any event or condition which
constitutes a Senior Event of Default or which upon notice, lapse of time or
both would, unless cured or waived, become a Senior Event of Default.
"Senior Event of Default" has the meaning assigned to such
term in Article VII.
"Senior Indebtedness" means the following obligations, whether
outstanding on the date of this Agreement or thereafter issued:
(i) all obligations consisting of the Bank Indebtedness;
(ii) all obligations consisting of the principal of and
premium, if any, and accrued and unpaid interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Borrower regardless of whether
post-filing interest is allowed in such proceeding) in respect of (A)
indebtedness of the Borrower for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for
the payment of which the Borrower is responsible or liable;
(iii) all Capitalized Lease Obligations of the Borrower;
(iv) all obligations of the Borrower (A) for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar
credit transaction, (B) under interest rate swaps, caps, collars,
options and similar arrangements and foreign currency hedges entered
into in respect of any obligations described in clauses (i), (ii) and
(iii) or (C) issued or assumed as the deferred purchase price of
property and all conditional sale obligations of the Borrower and all
obligations of the Borrower under any title retention agreement;
(v) all obligations of other persons of the type referred to
in clauses (ii), (iii) or (iv) and all dividends of other persons for
the payment of which, in either case, the Borrower is responsible or
liable, directly or indirectly, as obligor, guarantor or otherwise,
including guarantees of such obligations and dividends; and
<PAGE>
(vi) all obligations of the Borrower consisting of
modifications, renewals, extensions, replacements and refundings of any
obligations described in clauses (i), (ii), (iii), (iv) or (v);
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such obligations, are not superior
in right of payment to the Tranche D Term Loans; provided, however, that Senior
Indebtedness shall not include (1) any obligation of the Borrower to any
Subsidiary, (2) any liability for Federal, state, local or other taxes owed or
owing by the Borrower, (3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including guarantees
thereof or instruments evidencing such liabilities), (4) any Junior Indebtedness
or any indebtedness, guarantee or obligation of the Borrower that is subordinate
or junior to any other indebtedness, guarantee or obligation of the Borrower or
(5) any Indebtedness that is incurred in violation of this Agreement.
"Senior Lenders" means the Persons listed on Schedule 2.01(a)
and any other Person that shall have become a party hereto pursuant to an
Assignment and Acceptance, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Acceptance. Unless the context otherwise
requires, the term "Senior Lenders" includes the Swingline Lender.
"Senior Loans" means Senior Term Loans and Revolving Loans.
"Senior Obligations" means (i) the obligations of the Borrower
hereunder to pay the principal of, premium, if any, and interest on the Senior
Loans and all other monetary obligations, including fees, costs, expenses,
indemnities and penalties, whether primary, secondary, direct, contingent, fixed
or otherwise, of the Borrower to the Senior Lenders in their capacities as such
under this Agreement or any other Loan Document, (ii) all other "Obligations",
as such term is defined in the Non-Shared Collateral Security Agreement and
(iii) all obligations of Loan Parties under the Parent Guarantee Agreement,
Subsidiary Guarantee Agreement, Security Agreements and Pledge Agreements.
"Senior Subordinated Indebtedness" means the Tranche D Loans,
the Senior Subordinated Notes, and any other Indebtedness of the Borrower that
specifically provides that such Indebtedness is to rank pari passu with the
Tranche D Loans and is not subordinated by its terms to any Indebtedness or
other obligation of the Borrower that is not Senior Indebtedness.
"Senior Subordinated Notes" means up to $2,500,000,000 in
aggregate principal amount of Permitted Subordinated Debt in the form of senior
subordinated Indebtedness issued, in one or more series having substantially the
same provisions (other than maturity and price terms) by the Borrower pursuant
to the Subordinated Debt Documents.
"Senior Term Loans" means Asset Sale Term Loans, Tranche A
Term Loans, Tranche B Term Loans and Tranche C Term Loans.
"Shared Collateral Pledge Agreement" means the Shared
Collateral Pledge Agreement, substantially in the form of Exhibit J, among BFI,
Subsidiaries of BFI that are Subsidiary Loan Parties and the Collateral Trustee
for the benefit of the Shared Collateral Secured Parties.
<PAGE>
"Shared Collateral Secured Parties" means the "Secured
Parties" as defined in the Shared Collateral Security Agreement.
"Shared Collateral Security Agreement" means the Shared
Collateral Security Agreement, substantially in the form of Exhibit K, among
BFI, Subsidiaries of BFI that are Subsidiary Loan Parties and the Collateral
Trustee for the benefit of the Shared Collateral Secured Parties.
"Shares" means shares of common stock of BFI.
"S&P" means Standard & Poor's.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person on a going concern basis is not less than the
amount that will be required to pay the probable liability of such Person on its
Indebtedness as they become absolute and matured, (c) such Person does not
intend to, and does not believe that it will, incur Indebtedness or liabilities
beyond such Person's ability to pay as such Indebtedness and liabilities mature
and (d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's property
would constitute an unreasonably small amount of capital. The portion of
contingent liabilities of any Person at any time that shall be includes for
purposes of the above determinations shall be the amount of such contingent
liabilities that, in light of all facts and circumstances existing at such time,
could reasonably be expected to become actual matured liabilities of such
Person.
"Specified Assets" means the assets set forth on Schedule
5.20A which have been identified by Allied Waste as being held for sale.
"Specified Subsidiary" means a Domestic Subsidiary of Allied
Waste or the Borrower (including Domestic Subsidiaries formed or acquired
pursuant to Permitted Acquisitions), but in any event excluding Inactive
Subsidiaries and Insurance Subsidiaries.
"Sponsor Preferred Stock" means shares of convertible
Preferred Stock of Allied Waste to be issued and sold to the Sponsors on the
Effective Date, and any shares of the same class of such Preferred Stock issued
in payment of dividends on outstanding shares of such class of Preferred Stock.
"Sponsor Preferred Stock Purchase" means the purchase by the
Sponsors of Sponsor Preferred Stock for not less than $1,000,000,000 cash
consideration paid to Allied Waste on or before the Effective Date.
"Sponsors" means Blackstone, Apollo and other investors in
Sponsor Preferred Stock reasonably satisfactory to the Initial Lenders.
<PAGE>
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject, for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentage shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subordinated Debt Documents" means the indenture or other
agreement under which the Senior Subordinated Notes are issued and all other
instruments, agreements and other documents evidencing or governing the Senior
Subordinated Notes or providing for any Guarantee or other right in respect
thereof.
"Subordinated Indemnity, Subrogation and Contribution
Agreement" means the Indemnity, Subrogation and Contribution Agreement,
substantially in the form of Exhibit E-2, among Allied Waste, the Borrower, the
Subsidiary Loan Parties and the Administrative Agent.
"Subordinated Parent Guarantee Agreement" means the
Subordinated Parent Guarantee Agreement substantially in the form of Exhibit L,
made by Allied Waste in favor of the Administrative Agent for the benefit of the
Tranche D Lenders.
"Subordinated Subsidiary Guarantee Agreement" means the
Subordinated Subsidiary Guarantee Agreement substantially in the form of Exhibit
M, made by the Subsidiary Loan Parties in favor of the Administrative Agent for
the benefit of the Tranche D Lenders.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, by the parent or one
or more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.
"Subsidiary" means any subsidiary of Allied Waste. For
purposes of the representations and warranties made herein on (and the
conditions to borrowing on) the Effective Date, the term "Subsidiary" includes
each of BFI and its subsidiaries. Notwithstanding anything herein to the
contrary, Ref-Fuel shall not be deemed to be a Subsidiary or a member of the
Allied Group unless Ref-Fuel becomes a wholly owned subsidiary.
"Subsidiary Guarantee Agreement" means the Subsidiary
Guarantee Agreement, substantially in the form of Exhibit N, made by the
Subsidiary Loan Parties in favor of the Collateral Agent for the benefit of the
Secured Parties.
"Subsidiary Loan Party" means each Specified Subsidiary,
including BFI.
"Swingline Exposure" means, at any time, the aggregate
principal amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Senior Lender at any time shall be its Applicable Percentage of
the total Swingline Exposure at such time.
<PAGE>
"Swingline Lender" means The Chase Manhattan Bank, in its
capacity as lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loans" means Senior Term Loans and Tranche D Term Loans.
"Total Indebtedness" means, at any date, the sum of:
(a) all Indebtedness (other than Indebtedness described in
clauses (e), (f) and (j) of the definition of the term "Indebtedness")
of members of the Allied Group which at such time would be required to
be reflected as liabilities for borrowed money on a Consolidated
balance sheet of Allied Waste and its Subsidiaries prepared as of such
date in accordance with GAAP; and
(b) the face amount of Cash-Pay Preferred Stock of members of
the Allied Group outstanding on such date to the extent that (i) any
member of the Allied Group has undertaken to redeem or repurchase such
Cash-Pay Preferred Stock for cash or other assets at a fixed or
determinable date or dates prior to the date that is six months after
the Tranche C Maturity Date, whether by operation of a sinking fund or
otherwise, or upon the occurrence of a condition not solely within the
control of the issuer (other than upon the occurrence of a change in
control) or (ii) such Cash-Pay Preferred Stock is redeemable or
required to be repurchased for cash or other assets by any member of
the Allied Group on any date prior to the date that is six months after
the Tranche C Maturity Date at the option of the holder thereof.
"Tranche A Availability Period" means the period from and
including the Effective Date to but excluding the earlier of the date that is 60
days after the Effective Date and the date of termination of the Tranche A
Commitments.
"Tranche A Commitment" means, with respect to each Senior
Lender, the commitment, if any, of such Senior Lender to make a Tranche A Term
Loan hereunder on the Effective Date, expressed as an amount representing the
maximum principal amount of the Tranche A Term Loan to be made by such Senior
Lender hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Senior Lender pursuant to Section 9.04. The initial
amount of each Senior Lender's Tranche A Commitment is set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Senior Lender
shall have assumed its Tranche A Commitment, as applicable. The initial
aggregate amount of the Senior Lenders' Tranche A Commitments is $1,750,000,000.
"Tranche A Lender" means a Senior Lender with a Tranche A
Commitment or an outstanding Tranche A Term Loan.
"Tranche A Maturity Date" means the date that is six years
after the Effective Date.
"Tranche A Term Loan" means a Loan made pursuant to clause (b)
of Section 2.01.
<PAGE>
"Tranche B Commitment" means, with respect to each Senior
Lender, the commitment, if any, of such Senior Lender to make a Tranche B Term
Loan hereunder on the Effective Date, expressed as an amount representing the
maximum principal amount of the Tranche B Term Loan to be made by such Senior
Lender hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Senior Lender pursuant to Section 9.04. The initial
amount of each Senior Lender's Tranche B Commitment is set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Senior Lender
shall have assumed its Tranche B Commitment, as applicable. The initial
aggregate amount of the Senior Lenders' Tranche B Commitments is $1,250,000,000.
"Tranche B Lender" means a Senior Lender with a Tranche B
Commitment or an outstanding Tranche B Term Loan.
"Tranche B Margin" means, with respect to any Tranche B Term
Loan (a) 1.75% per annum, in the case of an ABR Loan or (b) 2.75% per annum, in
the case of a Eurodollar Loan.
"Tranche B Maturity Date" means the date that is seven years
after the Effective Date.
"Tranche B Term Loan" means a Loan made pursuant to clause (c)
of Section 2.01.
"Tranche C Commitment" means, with respect to each Senior
Lender, the commitment, if any, of such Senior Lender to make a Tranche C Term
Loan hereunder on the Effective Date, expressed as an amount representing the
maximum principal amount of the Tranche C Term Loan to be made by such Senior
Lender hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Senior Lender pursuant to Section 9.04. The initial
amount of each Senior Lender's Tranche C Commitment is set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Senior Lender
shall have assumed its Tranche C Commitment, as applicable. The initial
aggregate amount of the Senior Lenders' Tranche C Commitments is $1,500,000,000.
"Tranche C Margin" means, with respect to any Tranche C Term
Loan (a) 2.00% per annum, in the case of an ABR Loan or (b) 3.00% per annum, in
the case of Eurodollar Loan.
"Tranche C Maturity Date" means the date that is eight years
after the Effective Date.
"Tranche C Term Loan" means a Loan made pursuant to clause (d)
of Section 2.01.
"Tranche D Assignment and Acceptance" means an assignment and
acceptance entered into by a Tranche D Lender and an assignee (with the consent
of any party whose consent is required by Section 9.04), and accepted by the
Administrative Agent, in the form of Exhibit A-2 or any other form approved by
the Administrative Agent.
<PAGE>
"Tranche D Commitment" means, with respect to each Tranche D
Lender, the commitment, if any, of such Tranche D Lender to make a Tranche D
Term Loan hereunder on the Effective Date, expressed as an amount representing
the maximum principal amount of the Tranche D Term Loan to be made by such
Tranche D Lender hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.08 and (b) reduced or increased from time to time
pursuant to assignments by or to such Tranche D Lender pursuant to Section 9.04.
The initial amount of each Tranche D Lender's Tranche D Commitment is set forth
on Schedule 2.01(b), or in the Assignment and Acceptance pursuant to which such
Tranche D Lender shall have assumed its Tranche D Commitment, as applicable. The
initial aggregate amount of the Tranche D Lender's Tranche D Commitments is
$2,500,000,000.
"Tranche D Default" means any event or condition which
constitutes a Tranche D Event of Default or which upon notice, lapse of time or
both would, unless cured or waived, become a Tranche D Event of Default.
"Tranche D Event of Default" has the meaning assigned to such
term in Article VII.
"Tranche D Lenders" means the Persons listed on Schedule
2.01(b) and any other Person that shall have become a party hereto pursuant to a
Tranche D Assignment and Acceptance, other than any such Person that ceases to
be a party hereto pursuant to a Tranche D Assignment and Acceptance. After the
first anniversary of the Effective Date, Tranche D Lenders shall be deemed to
include any Exchange Note Holders for purposes of Sections 2.10 and 2.11.
"Tranche D Loan Documents" means this Agreement, the
Subordinated Parent Guarantee Agreement and the Subordinated Subsidiary
Guarantee Agreement.
"Tranche D Margin" means, for any day, with respect to any ABR
Loan or Eurodollar Loan that is a Tranche D Loan, the applicable interest rate
margin per annum set forth below under the caption "ABR Spread" or "Eurodollar
Spread", based upon the period elapsed since the Effective Date:
<TABLE>
<CAPTION>
- -------------------------------------------------- ---------------------------------- =====================
Period Since the Eurodollar
Effective Date ABR Spread Spread
- -------------------------------------------------- ---------------------------------- =====================
- -------------------------------------------------- ---------------------------------- =====================
<S> <C> <C>
Category 1 2.50% 3.50%
- ----------
Less than 12 months
- -------------------------------------------------- ---------------------------------- =====================
- -------------------------------------------------- ---------------------------------- =====================
Category 2 3.00% 4.00%
- ----------
Greater than or equal to 12 months and less than
15 months
- -------------------------------------------------- ---------------------------------- =====================
- -------------------------------------------------- ---------------------------------- =====================
Category 3 3.50% 4.50%
- ----------
Greater than or equal to 15 months and less than
18 months
- -------------------------------------------------- ---------------------------------- =====================
- -------------------------------------------------- ---------------------------------- =====================
Category 4 4.00% 5.00%
- ----------
Greater than or equal to 18 months and less than
21 months
- -------------------------------------------------- ---------------------------------- =====================
- -------------------------------------------------- ---------------------------------- =====================
Category 5 4.25% 5.25%
- ----------
Greater than 21 months
- -------------------------------------------------- ---------------------------------- =====================
</TABLE>
For purposes of the foregoing, the period of time elapsed
since the Effective Date shall be deemed to be in Category 5 at any time that an
Event of Default has occurred and is continuing.
<PAGE>
"Tranche D Maturity Date" means the date that is eight years
after the Effective Date.
"Tranche D Obligations" means the obligations of the Borrower
hereunder to pay the principal of, premium, if any, and interest on the Tranche
D Loans and all other monetary obligations, including fees, costs, expenses,
indemnities and penalties, whether primary, secondary, direct, contingent, fixed
or otherwise, of the Borrower to the Tranche D Lenders in their capacities as
such under this Agreement or any other Loan Document.
"Tranche D Representations and Warranties" has the meaning
specified in Section 3.24
"Tranche D Term Loan" means a Loan made pursuant to Clause (e)
of Section 2.01 (and such term shall be deemed to include, after the first
anniversary of the Effective Date, any outstanding Indebtedness evidenced by the
Exchange Notes).
"Transactions" means the Merger and the other transactions
described in the preamble to this Agreement.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Uniform Commercial Code" means the Uniform Commercial Code
(and any similar law) in effect in any applicable jurisdiction.
"Unrestricted Subsidiary" means any Subsidiary that has been
designated by the board of directors of the Borrower as an "Unrestricted
Subsidiary" pursuant to and in accordance with the provisions of Section 6.16A.
"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.
"wholly owned subsidiary" of any Person shall mean a
subsidiary of such Person of which securities (except for directors' qualifying
shares) or other ownership interests representing 100% of the equity or 100% of
the ordinary voting power or 100% of the general partnership interests are, at
the time any determination is being made, owned, controlled or held by such
Person or one or more wholly owned subsidiaries of such Person or by such Person
and one or more wholly owned subsidiaries of such Person.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
<PAGE>
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Borrowing" or "Term
Borrowing") or by Type (e.g., a "Eurodollar Borrowing") or by Class and Type
(e.g., a "Eurodollar Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
<PAGE>
SECTION 2.01. Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees (a) to make an Asset Sale Term Loan to the
Borrower on the Effective Date in a principal amount not exceeding its Asset
Sale Term Loan Commitment, (b) to make Tranche A Term Loans to the Borrower from
time to time during the Tranche A Availability Period in an aggregate principal
amount not exceeding its Tranche A Commitment; provided that not less than the
lesser of (i) $1,250,000,000 of the aggregate Tranche A Commitments or (ii) the
outstanding Tranche A Commitments shall be drawn on the Effective Date, (c) to
make a Tranche B Term Loan to the Borrower on the Effective Date in a principal
amount not exceeding its Tranche B Commitment, (d) to make a Tranche C Term Loan
to the Borrower on the Effective Date in a principal amount not exceeding its
Tranche C Commitment, (e) to make a Tranche D Term Loan to the Borrower on the
Effective Date in a principal amount not exceeding its Tranche D Commitment and
(f) to make Revolving Loans to the Borrower from time to time during the
Revolving Availability Period in an aggregate principal amount that will not
result in such Lender's Revolving Exposure exceeding such Lender's Revolving
Commitment. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.
Amounts repaid in respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than
a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of
the same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each Swingline Loan shall be an ABR
Loan. Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall comply with Section 2.17 and
shall not affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $10,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $10,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Revolving Commitments or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e). Each Swingline Loan shall be in an amount that is an integral
multiple of $100,000 and not less than $1,000,000. Borrowings of more than one
Type and Class may be outstanding at the same time; provided that there shall
not at any time be more than a total of 35 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Revolving Maturity Date, Asset Sale Term Loan Maturity Date, Tranche A
Maturity Date, Tranche B Maturity Date, Tranche C Maturity Date or Tranche D
Maturity Date, as applicable.
<PAGE>
SECTION 2.03. Requests for Borrowings. To request a Revolving
Borrowing or Term Borrowing, the Borrower shall notify the Administrative Agent
of such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 1:00 p.m., New York City time, three Business Days before the date of
the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than
1:00 p.m., New York City time, on the day of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving
Borrowing, Asset Sale Term Loan Borrowing, Tranche A Term Borrowing,
Tranche B Term Borrowing, Tranche C Term Borrowing or Tranche D Term
Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender and/or Tranche D Lender, as
applicable, of the details thereof and of the amount of such Lender's Loan to be
made as part of the requested Borrowing.
SECTION 2.04. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
to the Borrower from time to time during the Revolving Availability Period in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of outstanding Swingline Loans exceeding
$50,000,000 or (ii) the sum of the total Revolving Exposures exceeding the total
Revolving Commitments; provided that the Swingline Lender may, but shall not be
required to, make a Swingline Loan to refinance an outstanding Swingline Loan.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 1:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a credit to the general
deposit account of the Borrower with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(e), by remittance to the Issuing Bank) by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan.
<PAGE>
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 12:00 noon, New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Revolving Lender, specifying in such notice
such Lender's Applicable Percentage of such Swingline Loan or Swingline Loans.
Each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt
of notice as provided above, to pay to the Administrative Agent, for the account
of the Swingline Lender, such Lender's Applicable Percentage of such Swingline
Loan or Swingline Loans. Each Revolving Lender acknowledges and agrees that its
obligation to acquire participations in Swingline Loans pursuant to this
paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever. Each
Revolving Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner as provided in
Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall
apply, mutatis mutandis, to the payment obligations of the Revolving Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Revolving Lenders. The Administrative Agent
shall promptly notify the Borrower in writing of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not
to the Swingline Lender. Any amounts received by the Swingline Lender from the
Borrower (or other party on behalf of the Borrower) in respect of a Swingline
Loan after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative Agent;
any such amounts received by the Administrative Agent shall be promptly remitted
by the Administrative Agent to the Revolving Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve the Borrower of any default in the
payment thereof.
SECTION 2.05. Letters of Credit. (a) General. Upon the
Effective Date, the Existing Letters of Credit will automatically, without any
action on the part of any person, be deemed to be Letters of Credit issued
hereunder for the account of the Borrower for all purposes of this Agreement and
the other Loan Documents. In addition, subject to the terms and conditions set
forth herein, the Borrower may request the issuance of Letters of Credit for its
own account or for the account of any other member of the Allied Group (provided
that the Borrower will be a co-applicant and a co-obligor with respect to each
Letter of Credit issued for the account of any other member of the Allied
Group), in a form reasonably acceptable to the Administrative Agent and the
relevant Issuing Bank, at any time and from time to time during the Revolving
Availability Period. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, an Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
<PAGE>
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the
relevant Issuing Bank and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the Issuing Bank,
the Borrower (and any other member of the Allied Group for whose account such
Letter of Credit is issued) shall also submit a letter of credit application on
the Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed $800,000,000 (as such amount may be reduced from time to time in integral
multiples of $1,000,000 by notice given by the Borrower to the Administrative
Agent, which shall promptly notify the Revolving Lenders thereof) and (ii) the
total Revolving Exposures shall not exceed the total Revolving Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (other than any Existing Letter of
Credit having a later expiration date), or, in the case of any renewal or
extension thereof, one year after such renewal or extension and (ii) the date
that is five Business Days prior to the Revolving Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the relevant Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender
hereby acquires from the Issuing Bank, a participation in such Letter of Credit
(including each Existing Letter of Credit) equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Revolving
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank, such Lender's Applicable Percentage
of each LC Disbursement made by the Issuing Bank and not reimbursed by the
Borrower or any other account party on the date due as provided in paragraph (e)
of this Section, or of any reimbursement payment required to be refunded to the
Borrower or any other account party for any reason. Each Senior Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
<PAGE>
(e) Reimbursement. If an Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying (or causing any other account party in respect of such
Letter of Credit to pay) to the Administrative Agent an amount equal to such LC
Disbursement not later than 1:00 p.m., New York City time, on the date that such
LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 1:00 p.m., New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 1:00 p.m., New York City time, on (i) the Business Day that
the Borrower receives such notice, if such notice is received prior to 1:00
p.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
if such LC Disbursement is not less than $1,000,000, the Borrower may, subject
to the conditions to borrowing set forth herein, request in accordance with
Section 2.03 or 2.04 that such payment be financed with an ABR Revolving
Borrowing or Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the
Borrower fails to make (or cause another account party to make) such payment
when due, the Administrative Agent shall notify each Revolving Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Revolving Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.06 with respect to Loans made by such
Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the relevant Issuing Bank the amounts so received by it from the
Revolving Lenders. Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the appropriate Issuing Bank or, to the extent
that Revolving Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Revolving Lender pursuant to this
paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the
funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall
not constitute a Loan and shall not relieve the Borrower (or any other account
party in respect of the relevant Letter of Credit) of its obligation to
reimburse such LC Disbursement.
<PAGE>
(f) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit (except as otherwise provided below), or
(iv) any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section, constitute
a legal or equitable discharge of, or provide a right of setoff against, the
Borrower's obligations hereunder. Neither the Administrative Agent, the Lenders
nor any Issuing Bank, nor any of their Related Parties, shall have any liability
or responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of such Issuing Bank; provided that the foregoing
shall not be construed to excuse the Issuing Bank from liability to the Borrower
to the extent of any direct damages (as opposed to consequential damages, claims
in respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by such Issuing Bank's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or willful
misconduct on the part of an Issuing Bank (as finally determined by a court of
competent jurisdiction), such Issuing Bank shall be deemed to have exercised
care in each such determination. In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If an Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower (or any other account party)
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Revolving Loans; provided that, if the Borrower fails to reimburse (or cause
another account party to reimburse) such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.13(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Revolving
Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank
shall be for the account of such Lender to the extent of such payment.
<PAGE>
(i) Addition and Replacement of an Issuing Bank. An Issuing
Bank may be replaced at any time by written agreement among the Borrower, the
Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.
The Administrative Agent shall notify the Revolving Lenders of any such
replacement of an Issuing Bank. At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of the
replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective
date of any such replacement, (i) the successor Issuing Bank shall have all the
rights and obligations of the Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit. A Revolving Lender may become an
additional Issuing Bank hereunder pursuant to a written agreement among the
Borrower, the Administrative Agent and such Revolving Lender. The Administrative
Agent shall notify the Revolving Lenders of any such additional Issuing Bank.
Notwithstanding the foregoing, the Borrower shall not designate any Revolving
Lender as an Issuing Bank hereunder if, after giving effect thereto, there would
be more than fifteen Issuing Banks (other than Issuing Banks with no outstanding
Letters of Credit other than Existing Letters of Credit).
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Senior Lenders (or, if the
maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure
representing greater than 50% of the total LC Exposure) demanding the deposit of
cash collateral pursuant to this paragraph, the Borrower shall deposit in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Senior Lenders, an amount in cash equal to the LC
Exposure as of such date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Senior Event of
Default with respect to the Borrower described in clause (viii) or (ix) of
Section 7.01(a). Each such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Borrower
under this Agreement. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Administrative Agent and
at the Borrower's risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse each Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the
consent of Revolving Lenders with LC Exposure representing greater than 50% of
the total LC Exposure), be applied to satisfy other obligations of the Borrower
under this Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived. If the Borrower is required to provide an amount of cash collateral
hereunder pursuant to Section 2.11(b), such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower as and to the extent that, after
giving effect to such return, the Borrower would remain in compliance with
Section 2.11(b) and no Default shall have occurred and be continuing.
<PAGE>
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall
make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 3:00 p.m., New York City time, to the
account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders; provided that Swingline Loans shall be made as
provided in Section 2.04. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Administrative Agent in
New York City and designated by the Borrower in the applicable Borrowing
Request; provided that ABR Revolving Loans made to finance the reimbursement of
an LC Disbursement as provided in Section 2.05(e) shall be remitted by the
Administrative Agent to the relevant Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower each agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at the greater of
the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation. If
such Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing
and Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Swingline Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02 and
paragraph (f) of this Section:
<PAGE>
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Senior Lender and/or Tranche
D Lender, as applicable, of the details thereof and of such Lender's portion of
each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof,
(i) if a Senior Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Senior Lenders so notifies
the Borrower, then, so long as a Senior Event of Default is continuing (A) no
outstanding Borrowing (other than a Tranche D Borrowing) may be converted to or
continued as a Eurodollar Borrowing and (B) unless repaid, each Eurodollar
Borrowing (other than Tranche D Borrowings) shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto, and (ii) if a
Tranche D Event of Default has occurred and is continuing and the Administrative
Agent, at the request of the Required Tranche D Lenders so notifies the
Borrower, then, so long as a Tranche D Event of Default is continuing (A) no
outstanding Tranche D Borrowing may be converted to or continued as a Eurodollar
Borrowing and (B) unless repaid, each Tranche D Borrowing that is a Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
(f) A Borrowing of any Class may not be converted to or
continued as a Eurodollar Borrowing if after giving effect thereto (i) the
Interest Period therefor would commence before and end after a date on which any
principal of the Loans of such Class is scheduled to be repaid and (ii) the sum
of the aggregate principal amount of outstanding Eurodollar Borrowings of such
Class with Interest Periods ending on or prior to such scheduled repayment date
plus the aggregate principal amount of outstanding ABR Borrowings of such Class
would be less than the aggregate principal amount of Loans of such Class
required to be repaid on such scheduled repayment date.
<PAGE>
SECTION 2.08. Termination and Reduction of Commitments. (a)
Unless previously terminated, (i) the Asset Sale Term Loan Commitments, Tranche
B Commitments, Tranche C Commitments, Tranche D Commitments and Tranche A
Commitments in excess of $500,000,000 shall terminate at 5:00 p.m., New York
City time, on the Effective Date, (ii) the Revolving Commitments shall terminate
on the Revolving Maturity Date and (iii) the undrawn balance of the Tranche A
Commitments shall terminate at 5:00 p.m., New York City time, on the last day of
the Tranche A Availability Period.
(b) The Borrower may at any time terminate, or from time to
time reduce, the Commitments of any Class; provided that (i) each reduction of
the Commitments of any Class shall be in an amount that is an integral multiple
of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.11,
the sum of the Revolving Exposures would exceed the total Revolving Commitments.
(c) If any prepayment of Term Borrowings is required pursuant
to Section 2.11 but cannot be made because there are no Term Borrowings
outstanding, or because the amount of the required prepayment exceeds the
outstanding amount of Term Borrowings, then, on the date that such prepayment is
required, the Revolving Commitments shall be reduced by an aggregate amount
equal to the amount of the required prepayment, or the excess of such amount
over the outstanding amount of Term Borrowings, as the case may be.
(d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section, or any required reduction of the Revolving Commitments under paragraph
(b) or (c) of this Section, at least three Business Days prior to the effective
date of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Senior Lenders and/or the Tranche D
Lenders, as applicable, of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of the Commitments of any Class
shall be made ratably among the Lenders in accordance with their respective
Commitments of such Class.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Senior Lender the then unpaid principal amount of each
Revolving Loan of such Senior Lender on the Revolving Maturity Date, (ii) to the
Administrative Agent for the account of each Senior Lender and Tranche D Lender,
as applicable, the then unpaid principal amount of each Term Loan of such Lender
as provided in Section 2.10 and (iii) to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the earlier of the Revolving Maturity
Date and the first date after such Swingline Loan is made that is the 15th or
last day of a calendar month and is at least ten Business Days after such
Swingline Loan is made; provided that on each date that a Revolving Borrowing is
made, the Borrower shall repay all Swingline Loans then outstanding.
<PAGE>
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.10. Amortization of Term Loans. (a) Subject to
adjustment pursuant to paragraph (e) of this Section, the Borrower shall repay
Tranche A Term Borrowings on each date set forth below in the aggregate
principal amount set forth opposite such date:
Date Amount
September 30, 2000 $ 75,000,000
September 30, 2001 $100,000,000
September 30, 2002 $250,000,000
September 30, 2003 $350,000,000
September 30, 2004 $450,000,000
(b) Subject to adjustment pursuant to paragraph (e) of this
Section, the Borrower shall repay Tranche B Term Borrowings in the aggregate
principal amount of $5,000,000 on September 30 of each year, beginning on
September 30, 2001.
(c) Subject to adjustment pursuant to paragraph (e) of this
Section, the Borrower shall repay Tranche C Term Borrowings in the aggregate
principal amount of $5,000,000 on September 30 of each year, beginning on
September 30, 2001.
<PAGE>
(d) To the extent not previously paid, (i) all Asset Sale Term
Loans shall be due and payable on the Asset Sale Term Loan Maturity Date, (ii)
all Tranche A Term Loans shall be due and payable on the Tranche A Maturity
Date, (iii) all Tranche B Term Loans shall be due and payable on the Tranche B
Maturity Date, and (iv) all Tranche C Term Loans shall be due and payable on the
Tranche C Maturity Date and (v) all Tranche D Term Loans shall be due and
payable on the Tranche D Maturity Date.
(e) If the initial aggregate amount of the Lenders' Term
Commitments of any Class exceeds the aggregate principal amount of Term Loans of
such Class that are made on the Effective Date (or, in the case of Tranche A
Term Loans, outstanding at 5:00 p.m., New York City time, on the last day of the
Tranche A Availability Period), then the scheduled repayments of Term Borrowings
of such Class to be made pursuant to this Section shall be reduced ratably by an
aggregate amount equal to such excess. Any prepayment of a Term Borrowing of any
Class shall be applied to reduce the subsequent scheduled repayments of the Term
Borrowings of such Class to be made pursuant to this Section ratably; provided
that at the option of the Borrower, any prepayment made pursuant to Section
2.11(a) may be applied either (a) first to reduce the next scheduled repayments
of the Term Borrowings of such Class to be made pursuant to this Section in
order of maturity or (b) ratably.
(f) If any Senior Subordinated Notes or other Permitted
Subordinated Debt or any capital stock or other Equity Interest (other than
capital stock issued pursuant to management compensation plans and the Sponsor
Preferred Stock Purchase) is issued by Allied Waste or its Subsidiaries on or
before the Effective Date, an amount equal to the Net Available Proceeds of such
Permitted Subordinated Debt and the Net Available Proceeds of any such equity
issuance shall be allocated (i) first, to reduce the Tranche D Commitments and
accordingly the amount of Tranche D Term Borrowings on the Effective Date, (ii)
second, to reduce Asset Sale Term Loan Commitments (and accordingly the amount
of Asset Sale Term Loan Borrowings on the Effective Date) and (iii) third, to
the extent of any additional Net Available Proceeds, to reduce A, B, and C Term
Commitments (and accordingly the amounts of A, B and C Term Borrowings on (or in
the case of Tranche A Term Borrowings, on or after) the Effective Date) on a pro
rata basis in accordance with the relative outstanding amounts of such
Commitments at the time of such reductions.
(g) If any Asset Sales are effected by Allied Waste or its
Subsidiaries or by BFI or its subsidiaries on or before the Effective Date, an
amount equal to the Net Available Proceeds of such Asset Sales shall be
allocated (i) first, to reduce Asset Sale Term Loan Commitments (and accordingly
the amount of Asset Sale Term Loan Borrowings on the Effective Date) and (ii)
second, to reduce A, B and C Term Commitments (and accordingly the amounts of A,
B and C Term Borrowings on (or in the case of Tranche A Term Borrowings, on or
after) the Effective Date) on a pro rata basis in accordance with the relative
outstanding amounts of such Commitments at the time of such reductions.
(h) If mandatory prepayment amounts arise from the issuance of
Senior Subordinated Notes or equity securities (other than in connection with
the Sponsor Preferred Stock Purchase) by Allied Waste or the Borrower after the
Effective Date, then, subject to Section 2.11(c), the Net Available Proceeds
thereof shall be allocated (i) first, to repay outstanding Tranche D Term
Borrowings, (ii) second, to repay outstanding Asset Sale Term Borrowings and
(iii) third, to the extent of any remaining Net Available Proceeds, to repay A,
B and C Term Borrowings or reduce the Tranche A Commitments, as appropriate, on
a pro rata basis in accordance with the respective outstanding amounts of such
Borrowings and the then remaining unused Tranche A Commitments at the time of
such prepayment.
<PAGE>
(i) Notwithstanding the provisions of paragraph (g) above, if
Net Available Proceeds from Asset Sales referred to in such paragraph are
received on, before or after the Effective Date and (after giving effect to any
allocation of a portion of such Net Available Proceeds to repay Asset Sale Term
Borrowings or reduce Asset Sale Term Loan Commitments) (x) there are no then
outstanding Asset Sale Term Loans or Asset Sale Term Loan Commitments and (y)
the outstanding Tranche D Commitments or Tranche D Term Borrowings, as
applicable, have been reduced to not more than $500,000,000 from the application
of at least $2,000,000,000 of net proceeds from the sale of Senior Subordinated
Notes and or equity securities (other than in connection with the Sponsor
Preferred Stock Purchase) of Allied Waste, then, subject to Section 2.11(c) such
Net Available Proceeds from Asset Sales may, at the Borrower's option, be
applied (to the extent not required to repay in full all Asset Sale Term Loans
or terminate in full all Asset Sale Term Loan Commitments) to repay outstanding
Tranche D Term Borrowings or reduce Tranche D Term Commitments, as the case may
be, until such Tranche D Term Borrowings are paid in full and such Tranche D
Commitments are terminated in full, and then to repay A, B and C Term Borrowings
or reduce Tranche A Commitments, as applicable, on a pro rata basis in
accordance with the respective outstanding amounts of such Borrowings and the
then remaining unused Tranche A Commitments at the time of such prepayment.
(j) Prior to any repayment of any Term Borrowings of any Class
hereunder, the Borrower shall select the Borrowing or Borrowings of the
applicable Class to be repaid and shall notify the Administrative Agent by
telephone (confirmed by telecopy) of such selection not later than 1:00 p.m.,
New York City time, three Business Days before the scheduled date of such
repayment. Each repayment of a Borrowing shall be applied ratably to the Loans
included in the repaid Borrowing. Repayments of Term Loans shall be accompanied
by accrued interest on the amount repaid.
(k) So long as Tranche A Term Loans are outstanding, any
Lender holding Tranche B Term Loans or Tranche C Term Loans may, on not less
than one Business Day's prior written notice to the Administrative Agent, elect
not to have any mandatory prepayment to be made out of Excess Cash Flow pursuant
to Section 2.11(d) applied to such Lender's Tranche B Term Loans or Tranche C
Term Loans, in which case the amount not so applied shall be applied to prepay
Tranche A Term Loans.
(l) So long as Asset Sale Term Loans or Tranche A Term Loans
are outstanding, the Borrower may, at its election, afford the Lenders holding
Tranche B Loans or Tranche C Loans the right to elect on not less than one
Business Day's prior written notice to the Administrative Agent with respect to
any optional prepayment pursuant to Section 2.11(a), not to have such prepayment
applied to such Lender's Tranche B Term Loans or Tranche C Term Loans, in which
case the amount not so applied shall be applied to prepay Asset Sale Term Loans
and Tranche A Term Loans on a pro rata basis in accordance with the outstanding
amounts thereof and otherwise as described in Section 2.10(n).
(m) If at the time of any mandatory prepayment made during the
Tranche A Availability Period, the Tranche A Term Loan has not been fully drawn,
the amount of such mandatory prepayment allocable to the undrawn portion of the
Tranche A Term Loan may be retained by the Borrower and the Tranche A
Commitments will be permanently reduced by such amount.
<PAGE>
(n) Except as set forth in paragraphs (f), (g), (h), (i), (k),
and (l), and subject to Section 2.11(c), (i) all Net Available Proceeds to be
applied at any time to prepay Term Borrowings pursuant to Section 2.11 shall be
applied (A) first, to repay outstanding Asset Sale Term Borrowings and (B)
second, to the extent of any remaining Net Available Proceeds, to repay A, B and
C Term Borrowings, or reduce the Tranche A Commitments, as appropriate, on a pro
rata basis in accordance with the respective outstanding amounts of such
Borrowings and the then remaining unused Tranche A Commitments at the time of
such prepayment; and (ii) all Excess Cash Flow to be applied at any time to
prepay Term Borrowings pursuant to Section 2.11 shall be applied to repay the
Senior Term Loans at the Borrower's option, in order of maturity of such
Borrowings or on a pro rata basis in accordance with the respective outstanding
amounts of such Borrowings at the time of such prepayment.
Each payment of Borrowings pursuant to this Section 2.10 shall
be accompanied by accrued interest on the principal amount paid to but excluding
the date of payment.
SECTION 2.11. Prepayment of Loans. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to the requirements of this Section provided that on or after
the first anniversary of the Effective Date, when such prepaid Borrowing is a
Tranche D Loan, the Borrower shall be required to redeem a ratable amount of any
outstanding Exchange Notes in accordance with the provisions of Article 3 of the
Exchange Note Indenture.
(b) In the event and on such occasion that the sum of the
Revolving Exposures exceeds the total Revolving Commitments, the Borrower shall
prepay Revolving Borrowings or Swingline Borrowings (or, if no such Borrowings
are outstanding, deposit cash collateral in an account with the Administrative
Agent pursuant to Section 2.05(j)) in an aggregate amount equal to such excess.
<PAGE>
(c) In the event and on each occasion that any Net Available
Proceeds are received by or on behalf of Allied Waste, the Borrower or any
Restricted Subsidiary or BFI or any subsidiary of BFI in respect of any
Prepayment Event, the Borrower shall, within three Business Days after such Net
Available Proceeds are received, prepay Term Borrowings (or reduce Term Loan
Commitments, in the case of Net Available Proceeds received on or before the
Effective Date) in an aggregate amount equal to the amount of the Relevant
Percentage of such Net Available Proceeds required to be applied or allocated in
accordance with Sections 2.10(f), (g), (h), (i), (j), (k), (l) and (n); provided
that on or after the first anniversary of the Effective Date, the Relevant
Percentage of Net Available Proceeds received in respect of any Prepayment Event
and prepaid in accordance with such sections to the Tranche D Lenders shall be
applied ratably to prepay Tranche D Loans and redeem any outstanding Exchange
Notes in accordance with Article 3 of the Exchange Note Indenture; provided
further that in the case of Net Available Proceeds arising out of the sale of
Specified Assets, the issuance of the Senior Subordinated Notes, the issuance of
Permitted Cure Securities or the issuance or incurrence of Indebtedness pursuant
to Section 6.01A(xvi), the Borrower shall prepay Term Borrowings in an aggregate
amount equal to 100% of Net Available Proceeds in accordance with such sections;
provided further that, in the case of any event described in clause (a) of the
definition of the term Prepayment Event occurring after the repayment in full of
all Asset Sale Term Loans (other than in connection with a sale of Specified
Assets), if the Borrower shall deliver to the Administrative Agent a certificate
of a Financial Officer to the effect that the Borrower and the Subsidiaries
intend to apply the Net Available Proceeds from such event, within one year
after receipt of such Net Available Proceeds, to acquire real property,
equipment or other tangible assets (including pursuant to Permitted
Acquisitions) to be used in the business of the Borrower and the Subsidiaries,
and certifying that no Event of Default has occurred and is continuing, then no
prepayment shall be required pursuant to this paragraph in respect of Net
Available Proceeds so applied by the end of such one-year period. The amount of
the Relevant Percentage of such Net Available Proceeds not so applied by the end
of such one-year period shall be applied to the prepayment of Term Borrowings as
if received on the date on which such status is first ascertainable. Any Net
Available Proceeds required to be applied to the reduction of Tranche A
Commitments or the prepayment of Tranche A Term Loans shall be applied (i)
first, to the prepayment of Tranche A Term Loans then outstanding, if any, and
(ii) second, to permanently reduce the Tranche A Commitments. Notwithstanding
any other provision of this Agreement, including the provisions of Sections 2.10
and 2.11, any and all proceeds, including any Net Available Proceeds, from the
sale or disposition of Collateral subject to Liens under the Security Agreements
or the Pledge Agreements at the time of such sale or disposition and made
pursuant to the exercise of remedies under such Security Documents shall be
applied in accordance with the provisions of the applicable Security Agreement
or Pledge Agreement rather than the provisions of this Agreement.
(d) Following the end of each fiscal year of the Borrower,
commencing with the fiscal year ending December 31, 2000, the Borrower shall
prepay Senior Term Loans in an aggregate amount equal to 75% of Excess Cash Flow
for such fiscal year, in accordance with Sections 2.10(j), (k), (l) and (n).
Each prepayment pursuant to this paragraph shall be made on or before the date
on which financial statements are delivered pursuant to Section 5.04(A) with
respect to the fiscal year for which Excess Cash Flow is being calculated (and
in any event within 105 days after the end of such fiscal year).
(e) The Borrower shall notify the Administrative Agent (and,
in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 1:00 p.m., New
York City time, three Business Days before the date of prepayment, (ii) in the
case of prepayment of an ABR Revolving Borrowing, not later than 1:00 p.m., New
York City time, one Business Day before the date of prepayment or (iii) in the
case of prepayment of a Swingline Loan, not later than 1:00 p.m., New York City
time, on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment; provided that, if a
notice of optional prepayment is given in connection with a conditional notice
of termination of the Revolving Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any such
notice (other than a notice relating solely to Swingline Loans), the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an Loan of a Borrowing of the same Type as provided in
Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to
the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.13.
<PAGE>
SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the daily unused amount of each
Commitment of such Lender during the period from and including the date hereof
to but excluding the date on which such Commitment terminates. Accrued
commitment fees shall be payable in arrears (i) in the case of commitment fees
in respect of the Revolving Commitments and Tranche A Commitments, on the last
day of March, June, September and December of each year and on the date on which
the Revolving Commitments or Tranche A Commitments, as applicable, terminate,
commencing on the first such date to occur after the date hereof, and (ii) in
the case of commitment fees in respect of the Asset Sale Loan Commitments,
Tranche B Commitments, Tranche C Commitments, and Tranche D Commitments on the
Effective Date or any earlier date on which such Commitments terminate. All
commitment fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day). For purposes of computing commitment fees with respect
to Revolving Commitments, a Revolving Commitment of a Lender shall be deemed to
be used to the extent of the outstanding Revolving Loans and LC Exposure of such
Lender (and the Swingline Exposure of such Lender shall be disregarded for such
purpose).
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Margin as interest on Eurodollar Revolving Loans on the daily amount of such
Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender's Revolving Commitment
terminates and the date on which such Lender ceases to have any LC Exposure, and
(ii) to each Issuing Bank a fronting fee, which shall accrue at the rate or
rates per annum separately agreed upon between the Borrower and such Issuing
Bank, not to exceed 0.25% per annum, on the outstanding amount of each Letter of
Credit issued by such Issuing Bank during the period from and including the date
of issuance thereof to but excluding the date of termination, expiration or
drawing in full of such Letter of Credit, as well as such Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Revolving Commitments terminate and any such fees accruing after the
date on which the Revolving Commitments terminate shall be payable on demand.
Any other fees payable to an Issuing Bank pursuant to this paragraph shall be
payable within 10 days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
<PAGE>
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to an Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR
Borrowing (including each Swingline Loan) shall bear interest at the Alternate
Base Rate plus the Applicable Margin.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Revolving Loans as provided in paragraph (a) of
this Section.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Revolving Commitments; provided that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by either the Required
Senior Lenders or the Required Tranche D Lenders that the Adjusted LIBO
Rate for such Interest Period will not adequately and fairly reflect
the cost to such Lenders (or Lender) of making or maintaining their
Loans (or its Loan) included in such Borrowing for such Interest
Period;
<PAGE>
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing
Bank; or
(ii) impose on any Lender or any Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or such
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or Issuing
Bank hereunder (whether of principal, interest or otherwise), then the Borrower
will pay to such Lender or Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or Issuing Bank, as the case
may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or any Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or Issuing Bank's capital or on the
capital of such Lender's or Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by such Issuing
Bank, to a level below that which such Lender or such Issuing Bank or such
Lender's or Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or Issuing Bank's
policies and the policies of such Lender's or Issuing Bank's holding company
with respect to capital adequacy), then from time to time the Borrower will pay
to such Lender or Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or Issuing Bank or such Lender's or
Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or Issuing Bank, as the case
may be, the amount shown as due on any such certificate within 10 days after
receipt thereof.
<PAGE>
(d) Failure or delay on the part of any Lender or Issuing Bank
to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or Issuing Bank's right to demand such compensation; provided that
the Borrower shall not be required to compensate a Lender or an Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 90 days prior to the date that such Lender or Issuing Bank, as the case may
be, notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender's or Issuing Bank's intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 90-day period
referred to above shall be extended to include the period of retroactive effect
thereof.
(e) Notwithstanding the foregoing, Section 2.17, and not this
Section 2.15, is the only section of this Agreement that deals with increased
costs with respect to Taxes.
SECTION 2.16. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan or Term Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.11(e) and is revoked in accordance therewith), or (d)
the assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
<PAGE>
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent,
each Lender and the Issuing Bank, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder or under any other Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or the Issuing Bank, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
<PAGE>
(e) (i) Each Foreign Lender (and, where required by applicable
law, such Foreign Lender's beneficial owners) shall deliver to the Borrower
(with a copy to the Administrative Agent) two copies of either United States
Internal Revenue Service Form 1001 or Form 4224 (and, in either case, two copies
of Form W-8), or, in the case of a Foreign Lender claiming exemption from U.S.
Federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8, or any subsequent versions
thereof or successors thereto (and, if such Foreign Lender (and, as applicable,
such Foreign Lender's beneficial owners) delivers a Form W-8, a certificate in
the form of the certificate attached hereto as Exhibit P (the "Portfolio
Exemption Certificate") representing, inter alia, that such Foreign Lender (and,
as applicable, such Foreign Lender's beneficial owners) is not a bank for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder of the
Borrower (within the meaning of Section 871(h)(3)(B) of the Code) and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code)), and such other forms or statements reasonably
requested by the Borrower, in the case of all the foregoing, properly completed
and duly executed by such Foreign Lender (and, as applicable, such Foreign
Lender's beneficial owners) claiming complete exemption from, or reduced rate
of, U.S. Federal withholding tax on payments by the Borrower under this
Agreement or any other Loan Document. Such forms shall be delivered by each
Foreign Lender (and, as applicable, such Foreign Lender's beneficial owners) on
or before the date it becomes a party to this Agreement or designates a new
lending office. In addition, each Foreign Lender (and, as applicable, such
Foreign Lender's beneficial owners) shall deliver such forms promptly upon the
obsolescence, expiration or invalidity of any form previously delivered by such
Foreign Lender (and, as applicable, such Foreign Lender's beneficial owners). In
the case of a Foreign Lender (and, as applicable, such Foreign Lender's
beneficial owners) that delivers a Portfolio Interest Exemption Certificate,
such Foreign Lender (and, as applicable, its beneficial owners) shall deliver
such certificate and other forms as reasonably requested by the Borrower on a
biannual basis. In addition, each Foreign Lender agrees to notify promptly the
Borrower and the Administrative Agent if it (or, as applicable, its beneficial
owners) is no longer able to deliver, or if it is required to withdraw or
cancel, any form or statement previously delivered by it pursuant to this
Section 2.17(e). Notwithstanding any other provision of this Section 2.17, a
Foreign Lender (and, as applicable, such Foreign Lender's beneficial owners)
shall not be required to deliver any form pursuant to this Section 2.17(e) that
such Foreign Lender (and, as applicable, such Foreign Lender's beneficial
owners) is not legally able to deliver (it being understood and agreed that the
Borrower shall withhold or deduct such amounts from any payments made to such
Foreign Lender that the Borrower reasonably determines are required by law).
(ii) Each Lender that is not a Foreign Lender shall deliver to
Borrower (with a copy to the Administrative Agent) two copies of United Internal
Revenue Service Form W-9, or any subsequent versions thereof or successors
thereto, unless such Lender otherwise establishes that such Lender is otherwise
eligible for an exemption from backup withholding tax or any other applicable
withholding tax. Such forms shall be delivered by such Lender on or before the
date it becomes a party to this Agreement or designates a new lending office and
such Lender shall deliver such forms promptly upon the obsolescence, expiration
or invalidity of any form previously delivered by such Lender.
(iii) Each Lender (and each former Lender) agrees to indemnify and
hold harmless the Borrower and the Administrative Agent from and against any
Taxes imposed by or on behalf of the United States or any taxing jurisdiction
thereof (including any interest, penalty, addition to tax or additional amount
due) and reasonable expenses arising therefrom or with respect thereto
("Losses") incurred or payable by the Borrower or the Administrative Agent as a
result of the failure of the Borrower or the Administrative Agent to comply with
its obligations to deduct or withhold any Taxes imposed by or on behalf of the
United States or any taxing jurisdiction thereof from any payments made pursuant
to this Agreement which failure resulted from the Borrower's or the
Administrative Agent's reliance on any representation, covenant, form,
statement, certificate or other information provided to it by such Lender
pursuant to this Section 2.17(e) including, for the avoidance of doubt, (x) any
Losses arising by virtue of such Lender being a "conduit entity" within the
meaning of Treasury Reg. Section 1.881-3 or any successor provision thereto and
(y) in the case of a Lender which sells a participation, any Losses which arise
as a result of such participation but, in all cases, excluding Losses resulting
solely from any action or failure to act by the Borrower (other than the
Borrower's reliance on any such representation, covenant, form, statement or
certificate or any such action as required by applicable law or by this
Agreement).
<PAGE>
(f) If the Administrative Agent or a Lender or the Issuing
Bank determines, in its reasonable, good faith judgment that it has received a
refund of or with respect to any Taxes as to which it has been indemnified by
the Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.17, it shall pay over such refund to the Borrower
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Borrower under this Section 2.17 with respect to the Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Administrative Agent or
such Lender or the Issuing Bank and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund);
provided, however, that the Borrower, upon the request of the Administrative
Agent or such Lender or the Issuing Bank, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender or
the Issuing Bank in the event the Administrative Agent or such Lender or the
Issuing Bank is required to repay such refund to such Governmental Authority.
Nothing contained in this Section 2.17 shall require the Administrative Agent or
any Lender or the Issuing Bank to make available its tax returns (or any other
information relating to its Taxes which it deems confidential) to the Borrower
or any other Person.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing
of Setoffs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 2:00 p.m., New York City time), on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except payments to be made directly to an Issuing Bank or the
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments under each Loan Document shall be made in
dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, to payment of interest and fees then due in respect
of Senior Loans, Letters of Credit and Commitments (other than Tranche D
Commitments) hereunder, ratably among the parties entitled thereto in accordance
with the amounts of interest and fees then due to such parties, (ii) second, to
payment of principal of Senior Loans and unreimbursed LC Disbursements then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties,
(iii) third, to payment of interest and fees then due in respect of Tranche D
Term Loans and Tranche D Commitments hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest and fees then due to
such parties, and (iv) fourth, to payment of principal of Tranche D Term Loans
then due hereunder, ratably among the parties entitled thereto in accordance
with the amounts of principal then due to such parties; provided, however, that
the application of any such funds shall at all times be subject to the
provisions of Article X.
<PAGE>
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Senior Term Loans, Tranche D Term Loans
or participations in LC Disbursements or Swingline Loans resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of its
Revolving Loans, Senior Term Loans, Tranche D Term Loans or participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans, Senior Term Loans, Tranche D Term Loans or participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Senior Term Loans, Tranche D Term Loans and
participations in LC Disbursements and Swingline Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, (ii)
the provisions of this paragraph shall not be construed to apply to any payment
made by the Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply) and (iii) the foregoing provisions and the receipt and
application of any payment in respect of Tranche D Term Loans or other Tranche D
Obligations shall be subject to the provisions of Article X. The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or an Issuing Bank hereunder
that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
such Issuing Bank, as the case may be, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or such
Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or
9.03(c), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
<PAGE>
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, each Issuing Bank and Swingline
Lender), which consent shall not unreasonably be withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a material reduction in such compensation or payments.
A Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
ARTICLE III
Representations and Warranties
Each of Allied Waste and the Borrower jointly and severally
represents and warrants to the Lenders that (it being understood and agreed that
any representation or warranty made or deemed made with respect to actions or
events occurring on or prior to the Effective Date in Sections 3.04, 3.07, 3.09,
3.10, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18, 3.20 or 3.21 with respect to BFI and
its subsidiaries is made to the knowledge of the Borrower and Allied Waste):
<PAGE>
SECTION 3.01. Organization; Powers. Each of Allied Waste and
its Restricted Subsidiaries (a) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to own its property and
assets and to carry on its business as now conducted, (c) is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not,
individually or in the aggregate, after giving effect to the Transactions,
reasonably be expected to have a Material Adverse Effect, and (d) has the
corporate power and authority to execute, deliver and perform its obligations
under each of the Loan Documents and each other agreement or instrument
contemplated hereby to which it is or will be a party and, in the case of the
Borrower, to borrow hereunder.
SECTION 3.02. Authorization. The execution, delivery and
performance by each Loan Party of each of the Loan Documents to which such Loan
Party is a party and the other Transactions:
(a) have been duly authorized by all requisite corporate and,
if required, stockholder action;
(b) in the case of Allied Waste and the Borrower, will not (i)
violate (A) any provision of law, statute, rule or regulation, or of
its certificate or articles of incorporation or other constitutive
documents or by-laws, (B) any material order of any Governmental
Authority or (C) any material provision of any indenture, or other
Material Agreement or instrument to which Allied Waste or the Borrower
is a party or by which either of them or any of their property is or
may be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default
under, or give rise to any right to accelerate or to require the
prepayment, repurchase or redemption of any obligation under any such
indenture or other Material Agreement or instrument or (iii) result in
the creation or imposition of any material Lien upon or with respect to
any property or assets now owned or hereafter acquired by Allied Waste
or the Borrower (other than any Lien created hereunder or under the
Security Documents); and
(c) in the case of members of the Allied Group other than
Allied Waste and the Borrower, will not (i) violate (A) any provision
of law, statute, rule or regulation, or of its certificate or articles
of incorporation or other constitutive documents or by-laws, (B) any
material order of any Governmental Authority or (C) any material
provision of any indenture or other Material Agreement or instrument to
which any of them is a party or by which any of them or any of their
property is or may be bound, (ii) be in conflict with, result in a
breach of or constitute (alone or which notice or lapse of time or
both) a default under, or give rise to any right to accelerate or to
require the prepayment, repurchase or redemption of any obligation
under any such indenture or other Material Agreement or instrument or
(iii) result in the creation or imposition of any material Lien upon or
with respect to any property or assets now owned or hereafter acquired
by any of them (other than any Lien created hereunder or under the
Security Documents, in each case other than violations, conflicts and
breaches referred to in clauses (i) and (ii) above that could not,
individually or in the aggregate, after giving effect to the
Transactions, reasonably be expected to have a Material Adverse Effect
or result in any liability of the Administrative Agent or any Lender.
<PAGE>
SECTION 3.03. Enforceability. This Agreement has been duly
executed and delivered by each of Allied Waste and the Borrower and constitutes,
and each other Loan Document when executed and delivered by each Loan Party
thereto will constitute, a legal, valid and binding obligation of such Loan
Party enforceable against such Loan Party in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.
SECTION 3.04. Governmental Approvals. Except as could not,
individually or in the aggregate after giving effect to the Transactions
reasonably be expected to have a Material Adverse Effect, no action, consent or
approval of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(a) the filing of Uniform Commercial Code financing statements and other similar
filings to perfect the interests of the Secured Parties in the Collateral, (b)
such as will have been made or obtained and will be in full force and effect as
of the Effective Date, (c) such as may be required in the ordinary course of
business in connection with the performance of the obligations of Allied Waste
and the Borrower hereunder and (d) such as may be required in connection with
sales of capital stock or other ownership interests under the Security
Documents.
SECTION 3.05. Financial Statements. (a) Allied Waste has
heretofore furnished to the Administrative Agent for distribution to the Lenders
the Consolidated balance sheet and statements of income, stockholders' equity
and cash flows of Allied Waste and its Restricted Subsidiaries on a Consolidated
basis (1) as of and for the fiscal year ended December 31, 1998, reported on by
Arthur Andersen LLP, independent public accountants, and (2) as of and for the
fiscal quarter and the portion of the fiscal year ended March 31, 1999,
certified by a Financial Officer of Allied Waste. Such financial statements
present fairly, in all material respects, the financial position and results of
operations and cash flows of Allied Waste and its Subsidiaries as of such dates
and for such periods in accordance with GAAP consistently applied, subject to
year-end audit adjustments and the absence of footnotes in the case of the
statements referred to in clause (2) of the first sentence of this paragraph.
(b) Allied Waste has heretofore furnished to the
Administrative Agent for distribution to the Lenders (i) its unaudited pro forma
Consolidated balance sheet as of March 31, 1999 and (ii) projected Consolidated
statements of income, stockholders' equity and cash flows of Allied Waste and
its Restricted Subsidiaries (covering the period ending on December 31, 2007),
in each case prepared giving effect to the Transactions as if the Transactions
had occurred as of December 31, 1998. Such pro forma and projected financial
statements have been prepared in good faith by Allied Waste based on the
assumptions and estimates used to prepare the pro forma and projected financial
information in the Confidential Information Memorandum (which assumptions and
estimates are believed by Allied Waste on the date thereof to be reasonable), is
based on the best information available to Allied Waste after due inquiry and
accurately reflects all material adjustments required to be made to give effect
to the Transactions.
SECTION 3.06. No Material Adverse Change. Since December 31,
1998, there has been no material adverse change in the business, condition
(financial or otherwise), operations, performance or properties of Allied Waste
and its Subsidiaries, taken as a whole, after giving effect to the Transactions.
<PAGE>
SECTION 3.07. Title to Properties; Possession Under Leases.
(a) Each member of the Allied Group has good title to, or valid leasehold
interests in, all properties and assets which are material to the conduct of the
business of the Allied Group, taken as a whole, except for defects that could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect. All such material properties and assets are free and
clear of Liens, other than Liens expressly permitted by the Loan Documents.
(b) Schedule 3.07 sets forth the address of each landfill that
is owned or leased by Allied Waste or any of its Restricted Subsidiaries as of
the date hereof.
(c) As of the date hereof, neither Allied Waste, BFI nor any
of their Subsidiaries has received notice of, or has knowledge of, any pending
or contemplated condemnation proceeding affecting any landfill or any sale or
disposition thereof in lieu of condemnation. As of the date hereof, except as
set forth in Schedule 3.07, neither any landfill nor any interest therein is
subject to any right of first refusal, option or other contractual right to
purchase such landfill or interest therein.
(d) Each member of the Allied Group has complied with all
obligations under all leases which are material to the Allied Group, taken as a
whole, to which it is a party and all such leases are in full force and effect,
except where failure to do so or failure of such leases to be in full force and
effect could not individually or in the aggregate, after giving effect to the
Transactions, reasonably be expected to have a Material Adverse Effect. Each
member of the Allied Group enjoys peaceful and undisturbed possession under all
such material leases, except where failure to do so could not reasonably be
expected to have a Material Adverse Effect.
SECTION 3.08. Subsidiaries; Other Equity Investments. (a) Part
A of Schedule 3.08 sets forth as of the date hereof a list of all Subsidiaries,
after giving effect to the Transactions. Each such Subsidiary is (or upon
consummation of the Transactions will be) a wholly owned Subsidiary except as
otherwise indicated on Schedule 3.08. The shares of capital stock or other
ownership interests issued by the Borrower and the other Subsidiaries and owned
by members of the Allied Group are fully paid and non-assessable and are owned
by Allied Waste, directly or indirectly, free and clear of all Liens (other than
Liens permitted by the Loan Documents).
(b) Part B of Schedule 3.08 sets forth as of the date hereof a
list of all equity Investments (other than equity Investments in Subsidiaries
referred to in Part A of said Schedule 3.08) held by Allied Waste, BFI or any of
their subsidiaries in any Person, and, for each such Investment (i) the identity
of the Person or Persons holding such Investment and (ii) the nature of such
Investment.
(c) Part C of Schedule 3.08 sets forth as of the date hereof a
list of each Subsidiary that is inactive and that has total assets of less than
$100,000 (each, an "Inactive Subsidiary")
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as
set forth on Schedule 3.09, there are no actions, suits or proceedings at law or
in equity or by or before any Governmental Authority now pending or, to the
knowledge of Allied Waste or the Borrower, threatened against or affecting any
member of the Allied Group or any business, property or rights of any such
member (i) that involve any Loan Document or the Transactions or (ii) as to
which there is a reasonable likelihood of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, after giving effect to the Transactions, to have a Material Adverse
Effect.
<PAGE>
(b) No member of the Allied Group or any of their respective
material properties or assets is in violation of, nor will the continued
operation of their material properties and assets as currently conducted violate
any law, rule or regulation (including any Environmental Law, or, to the
knowledge of Allied Waste or the Borrower any zoning, building ordinance, code
or approval or any building permits), or is in default with respect to any
judgment, writ, injunction, decree or order of any Governmental Authority, where
such violation or default could individually or in the aggregate, after giving
effect to the Transactions, reasonably be expected to have a Material Adverse
Effect.
SECTION 3.10. Agreements. No member of the Allied Group is in
default in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other Material Agreement to which it
is a party or by which it or any of its properties or assets are or may be
bound, where such default could individually or in the aggregate, after giving
effect to the Transactions, reasonably be expected to have a Material Adverse
Effect.
SECTION 3.11. Federal Reserve Regulations. (a) No member of
the Allied Group is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of buying or carrying Margin
Stock.
(b) No part of the proceeds of any Loan or any Letter of
Credit will be used by any member of the Allied Group, whether directly or
indirectly, and whether immediately, incidentally or ultimately, for any purpose
that entails a violation of, or that is inconsistent with, the provisions of
Regulations U or X of the Board.
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act. No member of the Allied Group is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.13. Tax Returns. Each of Allied Waste and its
Subsidiaries has timely filed or caused to be filed all Tax returns, extensions
or materials required to have been filed by it (other than those not yet
delinquent) and has paid or caused to be paid all Taxes due and payable by it
and all assessments received by it, except (a) any Taxes and assessments that
are being contested in good faith by appropriate proceedings and for which such
member shall have set aside on its books adequate reserves in accordance with
GAAP or (b) to the extent that the failure to do so could not, individually or
in the aggregate, after giving effect to the Transactions, reasonably be
expected to result in a Material Adverse Effect.
<PAGE>
SECTION 3.14. No Material Misstatements. To the knowledge of
the Loan Parties, on or prior to the Effective Date, none of (a) the
Confidential Information Memorandum or (b) any other information, report,
financial statement, exhibit or schedule furnished by or on behalf of Allied
Waste and its Subsidiaries to the Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto, when taken as a whole, contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, as of the date of such statements and in the light of the
circumstances under which they were made, not misleading; provided that to the
extent any such information, report, financial statement, exhibit or schedule
was based upon or constitutes a forecast, projection or expressions of opinion,
each of Allied Waste and its Subsidiaries represents only that (i) it acted in
good faith and utilized assumptions believed to be reasonable at the time and
due care in the preparation of such information, report, financial statement,
exhibit or schedule and (ii) nothing has come to its attention which would cause
them not to so believe.
SECTION 3.15. Employee Benefit Plans. Except as set forth on
Schedule 3.15, each of the Borrower and its ERISA Affiliates is in compliance in
all material respects with the applicable provisions of ERISA and the Code and
the regulations and published interpretations thereunder, except for such
non-compliance as could not, individually or in the aggregate, after giving
effect to the Transactions, reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule 3.15, no ERISA Event has occurred and is
outstanding or is reasonably expected to occur that, when taken together with
all other such outstanding ERISA Events, could, individually or in the
aggregate, after giving effect to the Transactions, reasonably be expected to
result in material liability of the Borrower or any of its ERISA Affiliates,
except where such liability could not reasonably be expected to have to a
Material Adverse Effect. The present value of all benefit liabilities under each
Plan (based on those assumptions used to fund such Plan) did not, as of the last
annual valuation date applicable thereto, exceed by more than $25,000,000 the
fair market value of the assets of such Plan, and the aggregate present value of
all benefit liabilities of all underfunded Plans (based on those assumptions
used to fund each such Plan) did not, as of the last annual valuation dates
applicable thereto, exceed by more than $25,000,000 the aggregate fair market
value of the assets of all such underfunded Plans.
SECTION 3.16. Environmental Matters. Except as set forth in
Schedule 3.16:
(a) the facilities and properties owned, leased or operated by
each member of the Allied Group (the "Properties") do not contain and
to the Borrower's best knowledge (actual or constructive) have not
previously contained, any Hazardous Materials in amounts or
concentrations which (i) constitute, or constituted a violation of,
(ii) require remedial action under, or (iii) could give rise to
liability under, Environmental Laws, which violations, remedial actions
and liabilities, individually or in the aggregate, after giving effect
to the Transactions, could reasonably be expected to have a Material
Adverse Effect;
(b) the Properties and all operations of each member of the
Allied Group are in compliance, and in the last five years have been in
compliance, with all Environmental Laws, and all necessary
Environmental Permits have been obtained and are in effect, except to
the extent that such non-compliance or failure to obtain any such
Environmental Permits, individually or in the aggregate, after giving
effect to the Transactions, could not reasonably be expected to have a
Material Adverse Effect;
(c) there have been no Releases or threatened Releases at,
from, under or proximate to the Properties or properties formerly
owned, leased or operated by any member of the Allied Group (the
"Former Properties") or otherwise in connection with the operations of
any member of the Allied Group, which Releases or threatened Releases,
individually or in the aggregate, after giving effect to the
Transactions, could reasonably be expected to have a Material Adverse
Effect;
<PAGE>
(d) no member of the Allied Group has received any notice of
an Environmental Claim in connection with the Properties or Former
Properties or the operations of any member of the Allied Group or with
regard to any Person whose liabilities arising under Environmental Law
any member of the Allied Group has retained or assumed, in whole or in
part, contractually, by operation of law or otherwise, which,
individually or in the aggregate, after giving effect to the
Transactions, could reasonably be expected to have a Material Adverse
Effect; and
(e) Hazardous Materials have not been transported from the
Properties or Former Properties, nor have Hazardous Materials been
generated, treated, stored or disposed of at, on or under any of the
Properties or Former Properties in violation of any Environmental Law,
nor has any member of the Allied Group retained or assumed any
liability, contractually, by operation of law or otherwise, with
respect to the generation, treatment, storage or disposal of Hazardous
Materials, which transportation, generation, treatment, storage or
disposal, or retained or assumed liabilities, individually or in the
aggregate, after giving effect to the Transactions, could reasonably be
expected to have a Material Adverse Effect.
SECTION 3.17. Insurance. Schedule 3.17 sets forth a true,
complete and correct description of all material insurance maintained by Allied
Waste, the Borrower and BFI (including insurance maintained by Allied Waste or
the Borrower for the Subsidiaries and by BFI for its subsidiaries) as of the
date hereof. As of the date hereof, such insurance is in full force and effect
and all premiums which have become due and payable have been fully paid. Each
member of the Allied Group maintains insurance in such amounts and covering such
risks and liabilities as are in accordance with normal industry practice.
SECTION 3.18. Labor Matters. Except as disclosed in the
periodic reports of Allied Waste and BFI most recently filed under the
Securities Exchange Act of 1934 prior to the date hereof, as of the date hereof,
there are no strikes, lockouts or slowdowns against any member of the Allied
Group pending or, to the knowledge of Allied Waste or the Borrower, threatened,
which individually or in the aggregate, after giving effect to the Transactions,
could reasonably be expected to have a Material Adverse Effect. The hours worked
by and payments made to employees of the Allied Group do not violate the Fair
Labor Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters, in a manner which individually or in the aggregate,
after giving effect to the Transactions, could reasonably be expected to have a
Material Adverse Effect. All payments due from members of the Allied Group, or
for which any claim may be made against any member of the Allied Group, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of such member, except
where the failure to do so individually or in the aggregate, after giving effect
to the Transactions, could not reasonably be expected to have a Material Adverse
Effect. The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any member of the Allied Group is
bound, except where such events individually or in the aggregate, after giving
effect to the Transactions, could not reasonably be expected to have a Material
Adverse Effect.
<PAGE>
SECTION 3.19. Solvency. Immediately after the consummation of
the Transactions to occur on the Effective Date and immediately following the
making of each Loan and after giving effect to the application of the proceeds
thereof, and taking into account all rights of indemnity, subrogation and
contribution of the Loan Parties under applicable law and the Indemnity,
Contribution and Subrogation Agreement, each Material Loan Party is and will be
Solvent.
SECTION 3.20. Intellectual Property. Each member of the Allied
Group owns, or has valid rights to use, all Intellectual Property necessary for
the conduct of its business as currently conducted except for any failure to so
own or license Intellectual Property which, individually or in the aggregate,
after giving effect to the Transactions, could not reasonably be expected to
have a Material Adverse Effect. To the knowledge of Allied Waste and the
Borrower, no claim has been asserted and is pending against any member of the
Allied Group challenging or questioning the use of any Intellectual Property by
them or the validity or effectiveness of any Intellectual Property used by them,
except for any claims, which, individually or in the aggregate, after giving
effect to the Transactions, could not reasonably be expected to have a Material
Adverse Effect. To the knowledge of Allied Waste and the Borrower, the use of
Intellectual Property by the members of the Allied Group does not infringe on
the rights of any Person in any material respect and in any manner which could
individually or in the aggregate, after giving effect to the Transactions,
reasonably be expected to have a Material Adverse Effect.
SECTION 3.21. Year 2000. Any reprogramming required to permit
the proper functioning in all material respects, in and following the year 2000,
of (i) the computer systems of Allied Waste and its Subsidiaries and (ii)
equipment containing embedded microchips (including systems and equipment
supplied by others or with which the systems of Allied Waste, the Borrower and
its Subsidiaries interface) and the testing of all such systems and equipment,
as so reprogrammed, will be completed in all material respects by December 31,
1999. The aggregate cost to Allied Waste and its Subsidiaries of such
reprogramming and testing, and of the reasonably foreseeable consequences of
year 2000 to Allied Waste and its Subsidiaries resulting from reprogramming
errors and the failure of others' systems or equipment, cannot reasonably be
expected to have a Material Adverse Effect. Except for such of the reprogramming
referred to in the preceding sentence as may be necessary, the computer and
management information systems of Allied Waste and its Subsidiaries are and,
with ordinary course upgrading and maintenance, will continue for the term of
this Agreement to be, sufficient to permit Allied Waste and its Subsidiaries to
conduct its business without the occurrence of a Material Adverse Effect.
SECTION 3.22. Senior Indebtedness. The Senior Obligations
constitute "Senior Indebtedness" or "Guarantor Senior Indebtedness" under and as
defined in the Loan Documents and the Subordinated Debt Documents.
<PAGE>
SECTION 3.23. Security Interests. (a) When executed and
delivered, each of the Non-Shared Collateral Pledge Agreement and the Shared
Collateral Pledge Agreement will be effective to create in favor of the
Collateral Agent and the Collateral Trustee, respectively, for the ratable
benefit of the Secured Parties and the Shared Collateral Secured Parties,
respectively, a valid and enforceable security interest in the "Collateral" (as
defined in the Non-Shared Collateral Pledge Agreement) and the "Collateral" (as
defined in the Shared Collateral Pledge Agreement) and, when the portion of the
Collateral constituting certificated securities (as defined in the Uniform
Commercial Code) is delivered to the Collateral Agent or Collateral Trustee
thereunder, each of the Non-Shared Collateral Pledge Agreement and the Shared
Collateral Pledge Agreement shall constitute a fully perfected first priority
Lien on, and security interest in, all right, title and interest of the pledgors
thereunder in such Collateral, in each case prior and superior in right to any
other Person.
(b) When executed and delivered, each of the Non-Shared
Collateral Security Agreement and the Shared Collateral Security Agreement is
effective to create in favor of the Collateral Agent and the Collateral Trustee,
respectively, for the ratable benefit of the Secured Parties and the Shared
Collateral Secured Parties, respectively, a legal, valid and enforceable
security interest in the "Collateral" (as defined in the Non-Shared Collateral
Security Agreement) and the "Collateral" (as defined in the Shared Collateral
Security Agreement) and, when financing statements in appropriate form are filed
in the offices specified on Schedule 6 to each of the Perfection Certificates,
the Non-Shared Collateral Security Agreement and the Shared Collateral Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such Collateral, to
the extent perfection can be obtained by filing Uniform Commercial Code
financing statements, other than the Intellectual Property, in which a security
interest may be perfected by filing, recording or registering a security
agreement, financing statement or analogous document in the United States Patent
and Trademark Office or the United States Copyright Office, as applicable, in
each case prior and superior in right to any other Person to the extent
perfection can be obtained by filing Uniform Commercial Code financing
statements, other than with respect to the rights of Persons pursuant to Liens
expressly permitted by Section 6.02A.
(c) When each of the Non-Shared Collateral Security Agreement
and the Shared Collateral Security Agreement is filed in the United States
Patent and Trademark Office and the United States Copyright Office, the security
interest created thereunder shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Intellectual Property in which a security interest may be perfected by filing,
recording or registering a security agreement, financing statement or analogous
document in the United States Patent and Trademark Office or the United States
Copyright Office, as applicable, in each case prior and superior in right to any
other Person, other than with respect to the rights of Persons pursuant to Liens
expressly permitted by Section 6.02(A) (it being understood that subsequent
recordings in the United States Patent and Trademark Office and the United
States Copyright Office may be necessary to perfect a lien on registered
trademarks, trademark applications and copyrights acquired by the Loan Parties
after the date hereof).
SECTION 3.24. Tranche D Representations and Warranties.
Notwithstanding any provision to the contrary contained in any Loan Document,
(i) the representations and warranties set forth in Section 3.22 and 3.23 are
not made, and will not be deemed made, to or for the benefit of the Tranche D
Lenders and (ii) the representations and warranties set forth in Section 3.03
are made to the Tranche D Lenders only insofar as they relate to the Tranche D
Loan Documents. Those representations and warranties made to the Tranche D
Lenders herein or in any Tranche D Loan Document are referred to herein as the
"Tranche D Representations and Warranties". The provisions of this Section 3.24
do not constitute representations or warranties of Allied Waste or the Borrower.
<PAGE>
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders
to make Loans and of an Issuing Bank to issue Letters of Credit hereunder shall
not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The following documents, each dated the Effective Date
(unless otherwise specified) are received by the Administrative Agent in form
and substance satisfactory to the Initial Lenders:
(i) for Allied Waste, the Borrower and each other Material
Loan Party, a copy of the organizational documents, as amended and in
effect, of such Material Loan Party certified (as of a date reasonably
close to the Effective Date) by the Secretary of State of the
jurisdiction of organization of such Material Loan Party; a certificate
from such Secretary of State dated as of a date reasonably close to the
Effective Date as to the good standing of and organizational documents
filed by such Material Loan Party; and evidence from each Material Loan
Party that it is qualified to do business in each jurisdiction where
such qualification is required and where the failure so to qualify
could, individually or in the aggregate, after giving effect to the
Transactions, reasonably be expected to have a Material Adverse Effect;
(ii) for each of Allied Waste, the Borrower and each other
Material Loan Party, a certificate of the Secretary or an Assistant
Secretary of such Material Loan Party, dated the Effective Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws (or operating or partnership agreement, where applicable) of
such Material Loan Party as amended and in effect at all times from the
date on which the resolutions referred to in clause (B) were adopted to
and including the date of such certificate, (B) that attached thereto
is a true and complete copy of resolutions (or consent by members or
partners, where applicable, to the extent required) duly adopted by the
board of directors (or members or partners, where applicable) of such
Material Loan Party authorizing the execution, delivery and performance
of such of the Loan Documents to which such Material Loan Party is or
is intended to be a party and the extensions of credit hereunder, and
that such resolutions (or consent by members or partners, where
applicable, to the extent required) have not been modified, rescinded
or amended and are in full force and effect, (C) that the
organizational documents of such Material Loan Party have not been
amended since the date of the certification thereto furnished pursuant
to clause (i) above, and (D) as to the incumbency and specimen
signature of each officer (or member or partner, where applicable) of
such Material Loan Party executing such of the Loan Documents to which
such Material Loan Party is intended to be a party and each other
document to be delivered by such Material Loan Party from time to time
in connection therewith (and the Administrative Agent and each Lender
may conclusively rely on such certificate until it receives notice in
writing from such Material Loan Party);
<PAGE>
(iii) for each Material Loan Party, a certificate of another
officer (or member or partner, where applicable) of such Material Loan
Party, dated the Effective Date, as to the incumbency and specimen
signature of the Secretary or Assistant Secretary, as the case may be,
of such Material Loan Party;
(b) The Administrative Agent shall have received the Security
Documents duly executed by each of the intended parties thereto, together with:
(i) such appropriately completed and duly executed copies of
Uniform Commercial Code financing statements as the Administrative
Agent or any Senior Lender shall have requested in order to perfect the
Liens created by the Security Documents and covering the Collateral
described therein;
(ii) executed documents for recordation and filing of or with
respect to such Security Documents that the Administrative Agent or any
Senior Lender may deem necessary or desirable in order to perfect the
Liens created thereby;
(iii) the stock certificates required to be delivered pursuant
to such Security Documents, each accompanied by undated stock powers
executed in blank;
(iv) a completed Perfection Certificate dated the Effective
Date and signed by an executive officer or Financial Officer, together
with all attachments contemplated thereby.
(c) The Administrative Agent shall have received a legal
opinion of (i) Fried, Frank, Harris, Shriver & Jacobson, special counsel for the
Loan Parties, in substantially the form of Exhibit O-1 and otherwise
satisfactory to the Initial Lenders and (ii) Steve Helm, General Counsel of
Allied Waste, in substantially the form of Exhibit O-2 and otherwise
satisfactory to the Initial Lenders;
(d) The Initial Lenders shall have received a certificate of a
Financial Officer to the effect that:
(x) the representations and warranties (other than
the representation and warranty contained in Section 3.06) are
true and correct in all material respects on and as of the
Effective Date or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as
of such specific date (except, in the case of representations
and warranties relating to the business, operations or
condition of Allied Waste and its Subsidiaries, to the extent
any such failures to be true and correct, individually or in
the aggregate, could not, individually or in the aggregate,
after giving effect to the Transactions, reasonably be
expected to result in a Material Adverse Effect); and
(y) no event has occurred and is continuing that
constitutes a Default or an Event of Default.
(e) The Administrative Agent shall have received evidence of
the existence of all insurance required to be maintained by Allied Waste and its
Restricted Subsidiaries hereunder, together with evidence that the Collateral
Agent on behalf of the Secured Parties or Shared Collateral Secured Parties is
an additional insured or loss payee (to the extent required under Section 5.02).
<PAGE>
(f) The Administrative Agent shall have received the results
of a recent lien search in each of the jurisdictions requested by the
Administrative Agent, and such searches shall reveal no Liens on any of the
assets of any Loan Party except for Liens permitted by Section 6.02A or Liens to
be discharged on or prior to the Effective Date pursuant to documentation
reasonably satisfactory in form and substance to the Initial Lenders.
(g) The Administrative Agent shall have received evidence that
the Borrower shall have paid all fees required to be paid, and all reasonable
expenses for which invoices have been presented, on or before the Effective Date
(including, without limitation, the reasonable fees and expenses of Cravath,
Swaine & Moore, counsel to the Administrative Agent and the Initial Lenders).
(h) The Administrative Agent shall have received evidence that
(i) the Borrower and BFI shall have repaid (or are simultaneously repaying) all
amounts owing under the Existing Credit Agreement and the BFI Credit Agreement,
that all letters of credit (other than Existing Letters of Credit) issued under
the Existing Credit Agreement or the BFI Credit Agreement shall have expired or
been terminated, that all commitments to lend thereunder shall have been (or
shall simultaneously be) terminated and that all Liens securing obligations
under such credit agreements have been released (or will be released promptly
after the Effective Date pursuant to a payoff letter delivered to the
Administrative Agent by the administrative agents under such credit agreements)
in a manner reasonably satisfactory to the Administrative Agent and (ii) all
commercial paper of BFI or any Subsidiary of BFI has been (or will on the
Effective Date be) repaid in full.
(i) Since September 30, 1998, there shall not have occurred
any material adverse change in the business, financial condition or results of
operations of BFI and its subsidiaries, taken as a whole.
(j) The Sponsor Preferred Stock Purchase shall have been
consummated in accordance with the purchase agreement and other documentation
relating to the Sponsor Preferred Stock referred to in this paragraph (j) and in
connection therewith Allied Waste shall have received cash proceeds of not less
than $1,000,000,000. The terms and conditions of the Sponsor Preferred Stock
shall, in all material respects, be as contemplated by the letter agreement
dated March 7, 1999, between Allied Waste and the Sponsors, and the terms and
conditions of the Sponsor Preferred Stock and any purchase agreement or other
documentation relating thereto shall be reasonably satisfactory to the Initial
Lenders. The Administrative Agent shall have received copies of the certificate
of designation for the Sponsor Preferred Stock and of any such purchase
agreement or other documentation.
(k) The Borrower shall have received in the aggregate
$2,500,000,000 of (i) proceeds from the issuance of Senior Subordinated Notes in
a public offering or in a Rule 144A or other private placement, (ii) proceeds of
Tranche D Term Borrowings, (iii) Net Available Proceeds from Asset Sales
received on or prior to the Effective Date and applied, in accordance with and
subject to the provisions of Section 2.10(i), to the reduction of Tranche D Term
Commitments and (iv) Net Available Proceeds received from the issuance of other
Permitted Subordinated Debt or Equity Interests of Allied Waste on or prior to
the Effective Date and applied, in accordance with and subject to the provisions
of Section 2.10(f), to the reduction of the Tranche D Commitments. The terms and
conditions of the Senior Subordinated Notes and the provisions of the
Subordinated Debt Documents shall be reasonably satisfactory to the Lenders. The
Administrative Agent shall have received copies of the Subordinated Debt
Documents, if any, certified by a Financial Officer as complete and correct.
<PAGE>
(l) The Merger shall have been or shall simultaneously be
consummated in accordance with applicable law and the Merger Documents. The
Initial Lenders shall be satisfied that the conditions to the Merger set forth
in the Merger Documents shall have been satisfied without giving effect to
waivers or amendments that are material to the Lenders. All requisite material
governmental authorities shall have approved or consented to the Transactions
(except to the extent the failure to obtain any such approvals or consents could
not, individually or in the aggregate reasonably be expected to result in a
Material Adverse Effect), all applicable appeal periods shall have expired and
there shall be no governmental or judicial action, actual or threatened, that
has or could have a reasonable likelihood of restraining, preventing or imposing
burdensome conditions (except as previously disclosed to the Initial Lenders)
that could, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect. The Administrative Agent shall have received
copies of the Merger Documents and all certificates, opinions and other
documents delivered thereunder, certified by a Financial Officer as complete and
correct. The Administrative Agent shall have received evidence (i) of receipt of
all material governmental and third party consents and approvals required in
connection with the Transactions, except such consents and approvals that, if
not obtained, could not, individually or in the aggregate, after giving effect
to the Transactions, reasonably be expected to result in a Material Adverse
Effect, and (ii) that the same remain in effect.
(m) The Lenders shall have received the pro forma consolidated
balance sheet of Allied Waste referred to in Section 3.05(b), and such pro forma
consolidated balance sheet shall be consistent in all material respects with the
forecasts and other information previously provided to the Lenders. The
Administrative Agent shall have received a certificate of a Financial Officer to
the effect that such pro forma consolidated balance sheet fairly presents, in
all material respects, the pro forma financial position of Allied Waste and its
Subsidiaries in accordance with GAAP. After giving effect to the Transactions,
neither Allied Waste nor any of its Restricted Subsidiaries shall have
outstanding any shares of preferred stock or any Indebtedness for borrowed
money, other than (i) Indebtedness incurred under the Loan Documents, (ii) the
Senior Subordinated Notes in an aggregate amount not in excess of
$2,500,000,000, (iii) Preferred Stock of Allied Waste and (iv) the Indebtedness
listed on Schedule 6.01A. The aggregate amount of fees and expenses (including
underwriting discounts and commissions) payable or otherwise borne by Allied
Waste and its Subsidiaries in connection with the Transactions shall not exceed
$300,000,000.
(n) The Administrative Agent shall have received a solvency
letter, in form and substance satisfactory to the Required Lenders, from
Houlihan Lokey Howard & Zukin Financial Advisors, Inc., together with such other
evidence reasonably requested by the Initial Lenders with respect to the
Solvency of Allied Waste and its Restricted Subsidiaries on a Consolidated basis
after giving effect to the Transactions.
(o) There shall be no material litigation against any member
of the Allied Group or defaults under any provision of any indenture or other
agreement or instrument evidencing Indebtedness, or any other Material Agreement
to which any member of the Allied Group is a party or by which it or any of its
properties or assets are or may be bound which could reasonably be expected,
either individually or in the aggregate, to result in a Material Adverse Effect.
<PAGE>
(p) As of the Effective Date and after giving effect to
consummation of the Transactions and other transactions contemplated hereby to
occur on or before the Effective Date, including without limitation the
Borrowings under this Agreement and the issuance of the Senior Subordinated
Notes, if any, AWNA will be able to borrow at least $1.00 of additional
long-term debt pursuant to and in compliance with Subsection 13(d) of Section
1.01 of the First Supplemental Indenture, dated as of December 23, 1998, to the
AWNA Senior Note Indenture.
(q) The Allied Guarantee shall have been duly executed and
delivered and shall be in full force and effect.
The Administrative Agent shall notify Allied Waste, the Borrower and the Lenders
of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of an Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on
December 31, 1999 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Senior
Lender to make a Loan on the occasion of any Borrowing after the Effective Date,
and of an Issuing Bank to issue, amend, renew or extend any Letter of Credit
after the Effective Date, is subject to receipt of the request therefor in
accordance herewith and to the satisfaction of the following conditions (each
Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by Allied
Waste and the Borrower on the date thereof as to the matters specified in
paragraphs (a), (b) and (c) of this Section):
(a) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of the date of
such Borrowing or issuance, before and after giving effect to such
Borrowing or issuance and to the application of the proceeds therefrom,
as though made on and as of such date (or, if any such representation
or warranty is expressly stated to have been made as of a specific
date, as of such specific date);
(b) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Senior Default or a Senior Event of
Default; and
(c) such Borrowing or issuance is permitted under the terms of
the AWNA Senior Note Indenture and under the terms of the BFI
Indenture.
SECTION 4.03. Determinations Under Section 4.01. For purposes
of determining compliance with the conditions specified in Section 4.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received written notice from such Lender prior to the
Effective Date specifying its objection thereto and such Lender shall not have
made available to the Administrative Agent such Lender's ratable portion of the
Borrowings made on the Effective Date.
<PAGE>
SECTION 4.04. Modification of Schedules. As of the date
hereof, Schedule 6.02 is incomplete or may require modification prior to the
Effective Date. The Borrower may supplement or modify such schedule if revisions
are delivered to each Lender not later than two Business Days prior to the
Effective Date. Notwithstanding anything else in this Agreement, in the event
that such schedule is so supplemented or modified after the date hereof but
prior to the Effective Date, such amendments or modifications shall be effective
if approved by the Required Lenders prior to the Effective Date, and the
conditions contained in Section 4.01 shall not be deemed to be satisfied until
such approval is received; provided that the Administrative Agent may approve
insignificant changes to such schedule, and the conditions in Section 4.01 shall
be deemed satisfied if the Administrative Agent so approves and such other
conditions contained therein are satisfied, without such consent from the
Required Lenders.
ARTICLE V-A
Affirmative Covenants
Until the Senior Commitments have expired or been terminated
and the principal of and interest on each Senior Loan and all fees payable to
Senior Lenders and Issuing Banks hereunder shall have been paid in full and all
Letters of Credit shall have expired or terminated and all LC Disbursements
shall have been reimbursed, each of Allied Waste and the Borrower covenants and
agrees with the Senior Lenders that:
SECTION 5.01A. Existence; Businesses and Properties. It will,
and will cause each of its Restricted Subsidiaries to:
(a) Do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence, except as
otherwise expressly permitted under Section 6.06A and except for
failures by Restricted Subsidiaries to do so which could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(b) Do or cause to be done all things necessary to obtain,
preserve, or renew, licenses, permits, franchises, authorizations,
patents, copyrights, trademarks and trade names material to the conduct
of its business; maintain and operate such business in substantially
the manner in which it is presently conducted and operated; comply with
all applicable laws, rules, regulations and decrees and orders of any
Governmental Authority, whether now in effect or hereafter enacted,
except for failures to comply which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
and at all times maintain and preserve all property material to the
conduct of such business and keep such property in good repair, working
order and condition and from time to time make, or cause to be made,
all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times, except for
failures to maintain and preserve property that could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
<PAGE>
SECTION 5.02A. Insurance. It will, and will cause each of its
Restricted Subsidiaries to:
(a) Keep its insurable properties adequately insured at all
times by financially sound and reputable insurers, or by way of
adequate self-insurance; maintain such other insurance or
self-insurance, to such extent and against such risks, including fire
and other risks insured against by extended coverage, as is customary
with companies in the same or similar businesses operating in the same
or similar locations, including public liability insurance or
self-insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any
properties owned, occupied or controlled by it; and maintain such other
insurance or self-insurance as may be required by law. All insurance
policies may provide for reasonable deductible amounts.
(b) Cause all such policies to be endorsed or amended to
include a "standard" or "New York" lender's loss payable endorsement,
in form and substance reasonably satisfactory to the Administrative
Agent, which endorsement shall provide that, from and after the
Effective Date, if the insurance carrier shall have received written
notice from the Administrative Agent of the occurrence of a Senior
Event of Default, the insurance carrier shall pay all proceeds
otherwise payable to any member of the Allied Group under such policies
directly to the Administrative Agent; and deliver original or certified
copies of all such policies to the Administrative Agent.
(c) If any separate or additional property, casualty or
"umbrella" insurance policy is known by a Responsible Officer to have
been obtained by any member of the Allied Group, notify the
Administrative Agent thereof promptly, and promptly deliver to the
Administrative Agent a duplicate original copy of such policy.
SECTION 5.03A. Obligations and Taxes. It will, and will cause
each of its Subsidiaries to, pay its Indebtedness and other obligations promptly
and in accordance with their terms and pay and discharge promptly when due all
Taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or in respect of its property, before the same shall
become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise that, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided that (x) such payment of
Indebtedness or claims for labor, material or supplies shall not be required
pursuant to this Section 5.03A to the extent failure to so pay could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect and would not result in any Senior Event of Default hereunder;
and (y) such payment and discharge shall not be required with respect to any
such Tax, assessment, charge, levy or claim so long as either (i) the validity
or amount thereof shall be contested in good faith by appropriate proceedings
and Allied Waste or the relevant Subsidiary shall have set aside on its books
adequate reserves with respect thereto in accordance with GAAP and such contest
operates to suspend collection of the contested obligation, Tax, assessment or
charge and enforcement of a Lien or (ii) such amount not so paid or discharged
is less than $50,000,000 in the aggregate.
<PAGE>
SECTION 5.04A. Financial Statements, Reports, Etc. Allied
Waste shall furnish to the Administrative Agent (and the Administrative Agent
shall furnish to each Lender):
(a) within seven days after the filing with the Securities
and Exchange Commission of Allied Waste's Annual Report on Form 10-K
with respect to each fiscal year (and in any event within 105 days
after the end of such fiscal year), (x) its Consolidated balance sheet
and related statements of operations, stockholders' equity and cash
flows showing the financial condition of Allied Waste and its
Restricted Subsidiaries as of the close of such fiscal year and the
results of its operations and the operations of such Restricted
Subsidiaries during such year, all audited by Arthur Andersen LLP or
other independent public accountants of recognized national standing
acceptable to the Administrative Agent and accompanied by an opinion of
such accountants (which shall not be qualified in any material respect)
to the effect that such Consolidated financial statements fairly
present the financial condition and results of operations of Allied
Waste and its Restricted Subsidiaries on a Consolidated basis in
accordance with GAAP (it being understood that such financial
statements and opinion may be delivered, if included therein, in the
form of such Annual Report on Form 10-K and any related Annual Report
to Stockholders); and (y) a calculation of the Leverage Ratio and
Interest Coverage Ratio as at the last day of and for such fiscal year;
(b) within seven days after the filing with the Securities and
Exchange Commission of Allied Waste's Quarterly Report on Form 10-Q
with respect to each of the first three fiscal quarters of each fiscal
year (and in any event within 60 days after the end of each such fiscal
quarter), (x) its Consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows showing the financial
condition of Allied Waste and its Restricted Subsidiaries as of the
close of such fiscal quarter and the results of its operations and the
operations of such Restricted Subsidiaries during such fiscal quarter
and the then elapsed portion of the fiscal year, all certified by one
of its Financial Officers as fairly presenting the financial condition
and results of operations of Allied Waste and its Restricted
Subsidiaries on a Consolidated basis in accordance with GAAP, subject
to normal year-end audit adjustments and lack of footnote disclosures
(it being understood that such financial statements may be delivered,
if included therein, in the form of such Quarterly Report on Form
10-Q); and (y) a calculation of the Leverage Ratio and the Interest
Coverage Ratio as at the last day of such fiscal quarter and for the
Rolling Period then ended;
<PAGE>
(c) concurrently with any delivery of financial statements
under paragraph (a) or (b) above, a certificate of the accounting firm
or Financial Officer opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility for legal
interpretations) (i) certifying that in making its examination in
connection with rendering such opinion or certificate with respect to
such statements, such Person has not obtained knowledge that an Event
of Default or, if such certificate is of a Financial Officer, a Default
has occurred or, if such Financial Officer has obtained knowledge that
an Event of Default or, if such certificate is of a Financial Officer,
Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto
and (ii) setting forth computations in reasonable detail satisfactory
to the Administrative Agent demonstrating compliance with the covenants
contained in Sections 6.04A, 6.05A, 6.06A, 6.08A, 6.13A, 6.14A and
6.15A;
(d) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by any member of the Allied Group with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of said Commission, or with any national
securities exchange, or distributed to its shareholders, as the case
may be;
(e) at the time required for delivery of financial statements
pursuant to paragraph (a) or (b) of this Section, (x) a report in form
and substance reasonably satisfactory to the Administrative Agent of
all Permitted Acquisitions consummated during the most recent fiscal
quarter covered by such financial statements, which report shall
identify, inter alia, each Permitted Acquisition having total
Acquisition Consideration of $25,000,000 or more (a "Large
Acquisition") and, for each Large Acquisition, a description of the
total Acquisition Consideration therefor; and (y) a list of all
entities that became or ceased to be Domestic Subsidiaries of Allied
Waste during such fiscal quarter;
(f) promptly from time to time, such other information
regarding the operations, business affairs and financial condition of
members of the Allied Group, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Senior Lender acting
through the Administrative Agent may reasonably request; and
(g) within 90 days after the beginning of each fiscal year, a
copy of the annual forecasts of Allied Waste, prepared by management of
Allied Waste, in each case in form and detail reasonably satisfactory
to the Administrative Agent, consisting of Consolidated balance sheets
and related statements of operations and cash flows of Allied Waste and
its Restricted Subsidiaries for such fiscal year and for each of the
following fiscal years occurring in whole or in part during the term of
this Agreement.
SECTION 5.05A. Litigation and Other Notices. It will, and will
cause each of its Restricted Subsidiaries to, furnish to the Administrative
Agent, each Issuing Bank and each Senior Lender:
(a) as soon as possible and in any event within five Business
Days after any Responsible Officer has knowledge thereof, written
notice that a Senior Default or Senior Event of Default has occurred,
specifying the nature and extent thereof and the corrective action (if
any) taken or proposed to be taken with respect thereto;
(b) as soon as possible and in any event within five Business
Days after any Responsible Officer has knowledge thereof, written
notice of the filing or commencement of, or of any threat or notice of
intention of any Person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against any member of the Allied Group that
could, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect;
<PAGE>
(c) prompt written notice of any development known to any
Responsible Officer that has had, or could, individually or in the
aggregate, reasonably be expected to have, a Material Adverse Effect;
and
(d) as soon as possible and in any event within five Business
Days after any Responsible Officer has knowledge thereof, written
notice that a Change in Control has occurred or is reasonably likely to
occur.
SECTION 5.06A. Employee Benefits. It will, and will cause each
of its Subsidiaries to:
(a) comply with the applicable provisions of ERISA and the
Code (excluding, however, noncompliance that could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect); and
(b) furnish to the Administrative Agent (i) as soon as
possible after, and in any event within 10 days after any Responsible
Officer has knowledge that, any ERISA Event has occurred and is then
outstanding that, alone or together with any other ERISA Event could
reasonably be expected to result in liability of any member of the
Allied Group in an aggregate amount exceeding $5,000,000 or (ii)
requiring payments by any member of the Allied Group exceeding
$2,500,000 in any year, a statement of a Financial Officer of the
Borrower, setting forth details as to such ERISA Event and the action,
if any, that Allied Waste proposes to take with respect thereto.
SECTION 5.07A. Maintaining Records; Access to Properties and
Inspections. It will, and will cause each of its Subsidiaries to, keep proper
books of record and account sufficient to permit the preparation of financial
statements in conformity with GAAP. Each of Allied Waste and the Borrower will,
and will cause each of its Restricted Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Senior Lender to
visit and inspect (at the expense of the Senior Lenders unless an Event of
Default has occurred and is continuing, in which case at the expense of the
Borrower) the records, books, accounts and the properties of members of the
Allied Group at reasonable times, with reasonable notice and without causing
material disruption, and as often as reasonably requested and to make extracts
from and copies of such records, books and accounts and permit any
representatives designated by the Administrative Agent or any Senior Lender to
discuss the affairs, finances and condition of members of the Allied Group with
the officers thereof and independent accountants therefor (subject to reasonable
requests of confidentiality, including requirements imposed by law or contract).
SECTION 5.08A. Environmental Laws. It will, and will cause of
each of its Subsidiaries to:
<PAGE>
(a) comply, and use commercially reasonable efforts to cause
all lessees and other Persons occupying its Properties to comply, in
all respects with all Environmental Laws and Environmental Permits
applicable to its operations and Properties; obtain and renew all
Environmental Permits necessary for its operations and Properties;
maintain appropriate financial assurance mechanisms in connection with
its landfill operations as required under Environmental Law; and
conduct any remedial action in accordance with Environmental Laws,
except where such noncompliance or failure to obtain or renew
Environmental Permits, maintain financial assurance mechanisms or to
conduct any remedial action could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
provided that no member of the Allied Group shall be required to
conduct remedial actions to the extent that any applicable obligation
to do so is being contested in good faith and by proper proceedings and
appropriate reserves are being maintained with respect to such
circumstances; and
(b) with respect to any Permitted Acquisition having
Acquisition Consideration in excess of $50,000,000, and any acquisition
of any other ownership or leasehold interest in, or the entry into any
agreement to conduct operations of, any landfill, transfer station or
other waste treatment or disposal facility the total value of which is
in excess of $50,000,000, prior to consummating any such acquisition or
commencement of any operations under any such agreement or lease,
obtain and review a written assessment, prepared by an environmental
consulting firm recognized within the municipal solid waste industry
and among environmental professionals as competent and reputable and
which the Borrower has reasonably determined to be suitable, that
reasonably addresses compliance with Environmental Law and material
Environmental Liabilities associated with the subject of such
acquisition, agreement or lease.
SECTION 5.09A. Preparation of Environmental Reports. If a
Senior Default or Senior Event of Default caused by reason of a breach of
Section 3.16 or 5.08A shall have occurred and be continuing, the Administrative
Agent is authorized to engage an environmental consulting firm selected by the
Administrative Agent reasonably acceptable to Allied Waste to prepare, on behalf
of the Administrative Agent, the Lenders and the Issuing Banks but at the sole
cost and expense of the Borrower, an environmental site assessment report for
the Properties which are the subject of such default, which environmental site
assessment report shall estimate the cost of any compliance or remedial action
(if such costs are reasonably ascertainable) and evaluate potentially material
Environmental Claims and potentially material Environmental Liabilities in
connection with such Properties. Each of Allied Waste and the Borrower will, and
will cause each of its Subsidiaries to, cooperate fully with the Administrative
Agent and such environmental consulting firms in their preparation of such
environmental assessment reports, including (without limitation), permitting any
representatives designated by the Administrative Agent or such environmental
consulting firms to visit and inspect the related Properties at reasonable times
and as often as reasonably requested and to make extracts from and copies of
environmental records of the members of the Allied Group. If requested by the
Borrower, the Borrower shall be entitled to have access to the data relating to
such environmental assessment reports.
SECTION 5.10A. Further Assurances. It will, and will cause
each of its Restricted Subsidiaries (other than Inactive Subsidiaries) to:
<PAGE>
(a) Execute any and all further documents, financing
statements, agreements and instruments, and take all further action
(including, without limitation, filing Uniform Commercial Code and
other financing statements) that the Required Lenders or the
Administrative Agent may reasonably request in order to effectuate the
transactions contemplated by the Loan Documents and in order to grant,
preserve, protect and perfect the validity and first priority of the
security interests created or intended to be created by the Security
Documents (subject to Liens permitted under the Loan Documents).
(b) Take such action from time to time as shall be necessary
to ensure that all Specified Subsidiaries (including Specified
Subsidiaries formed or acquired pursuant to Permitted Acquisitions) are
parties to the Subsidiary Guarantee Agreement hereunder, that all of
the capital stock or other ownership interests of Specified
Subsidiaries owned by the Borrower or the Specified Subsidiaries is
pledged to the Collateral Agent or the Collateral Trustee pursuant to
the applicable Security Document and that substantially all of the
personal property of the Borrower and the Specified Subsidiaries
(including assets acquired pursuant to Permitted Acquisitions) is
pledged to the Collateral Agent or the Collateral Trustee pursuant to
the applicable Security Document; provided, however, that the foregoing
shall not apply to Subsidiaries with unaffiliated minority holders of
Voting Stock which do not provide required consent to such Subsidiary
Guarantee Agreement or such other applicable Security Document;
provided, further, that Allied Waste and the Borrower shall use
commercially reasonable efforts to obtain any such required consents.
Without limiting the generality of the foregoing, in the event that
Allied Waste or any of the Specified Subsidiaries shall form or acquire
any new Subsidiary after the date hereof that shall constitute a
Specified Subsidiary, and in connection with each Permitted
Acquisition, Allied Waste and the Specified Subsidiaries will, promptly
after such formation or Permitted Acquisition:
(i) cause each new Specified Subsidiary to become
party to the Subsidiary Guarantee Agreement, a "Grantor" under
the Non-Shared Collateral Security Agreement or, if a
subsidiary of BFI, the Shared Collateral Security Agreement,
and, if applicable, a "Pledgor" under the Non-Shared
Collateral Pledge Agreement or the Shared Collateral Pledge
Agreement;
(ii) take and cause each new Specified Subsidiary to
take such action (including, without limitation, delivering
such shares of stock or other certificated ownership interests
and executing and delivering such Uniform Commercial Code
financing statements) as shall be necessary to create and
perfect valid and enforceable first priority Liens (subject
only to Liens permitted under the Loan Documents) on
substantially all of the personal property of such new
Specified Subsidiary and on substantially all of the personal
property acquired pursuant to each Permitted Acquisition, as
collateral security for the Senior Obligations hereunder and
under the other Loan Documents;
(iii) deliver all certificates evidencing capital
stock or other ownership interests in such new Specified
Subsidiary owned by members of the Allied Group, each
accompanied by undated stock powers executed in blank; and
(iv) deliver such proof of corporate or other
Borrower action, incumbency of officers, opinions of counsel
and other documents as is consistent with those delivered by
each Loan Party pursuant to Section 4.01 on the Effective Date
or as the Collateral Agent shall have reasonably requested.
<PAGE>
(c) At its own cost and expense, promptly secure the Senior
Obligations by pledging or creating, or causing to be pledged or
created, perfected security interests with respect to such of its
assets and properties, as the Collateral Agent or the Required Senior
Lenders shall designate (it being understood that it is the intent of
the parties that the Senior Obligations shall be secured by, among
other things, substantially all the assets of the Loan Parties and
other properties acquired subsequent to the Effective Date). Such
security interests and Liens will be created under Security Documents
in form and substance satisfactory to the Collateral Agent, and shall
be accompanied by all such instruments and documents (including legal
opinions and lien searches) as the Collateral Agent or Collateral
Trustee shall reasonably request.
Notwithstanding the foregoing provisions of this Section 5.10A, no Loan Party
shall be required to pledge or create security interests in (i) landfills unless
the Administrative Agent acting at the direction of the Required Senior Lenders
shall specifically request the same (which requests may be given from time to
time and may relate to all or only specified landfills owned by members of the
Allied Group), (ii) any assets (excluding capital stock of subsidiaries) of such
Loan Party with respect to which the creation of such pledge or such security
interest is prohibited by a contract or other agreement of such Loan Party (x)
existing on the date hereof or (y) hereafter entered into in compliance with the
provisions of Section 6.08A(b), (iii) capital stock of any Foreign Subsidiary in
excess of 65% thereof or (iv) capital stock of any Unrestricted Subsidiary.
SECTION 5.11A. Compliance with Terms of Leaseholds. It will
make, and will cause each of its Restricted Subsidiaries to make, all payments
and otherwise perform all material obligations in respect of all Material Leases
to which a member of the Allied Group is a party, keep such Material Leases in
full force and effect and not allow such Material Leases to lapse or be
terminated or any rights to renew such Material Leases to be forfeited or
canceled, notify the Administrative Agent of any default by any party with
respect to such Material Leases and cooperate with the Administrative Agent in
all respects to cure any such default and cause each of Allied Waste's
Restricted Subsidiaries to do so, except, in any case, where the failure to do
any of the foregoing, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.12A. Performance of Material Agreements. It will,
and will cause each of its Restricted Subsidiaries to perform and observe all of
the terms and provisions of each Material Agreement, maintain each such Material
Agreement in full force and effect, enforce such Material Agreement in
accordance with its terms, except, in any case, where the failure to do any of
the foregoing could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
SECTION 5.13A. Inactive Subsidiaries. Except as specified on
Schedule 5.13, Allied Waste shall cause each Inactive Subsidiary to be dissolved
within 90 days of the date hereof; provided that if after such period Allied
Waste has not caused any Inactive Subsidiary to be so dissolved, then each such
Inactive Subsidiary shall be deemed to be (as of such 90th day) a newly formed
Specified Subsidiary for purposes of Section 5.10A(b).
<PAGE>
SECTION 5.14A. Year 2000. Allied Waste will use its
commercially reasonable efforts to ensure that any computer systems and/or
software used in the operation of Allied Waste's or any of its Subsidiaries'
businesses is modified or replaced to the extent necessary to prevent or avoid
any the occurrence of any Material Adverse Effect as a result of the
commencement of the year 2000.
SECTION 5.15A. Information Regarding Collateral. (a) Allied
Waste and the Borrower will furnish to the Administrative Agent quarterly,
within 15 days after the end of each fiscal quarter, a report setting forth any
change (i) in any corporate name of a Loan Party or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Loan Party's chief executive office, its
principal place of business, any office in which it maintains books or records
relating to Collateral owned by it or any office or facility at which Collateral
owned by it is located (including the establishment of any such new office or
facility), (iii) in any Loan Party's identity or corporate structure or (iv) in
any Loan Party's Federal Taxpayer Identification Number.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section 5.04A, Allied Waste and the Borrower shall deliver to the Administrative
Agent a certificate of a Financial Officer of the Allied Waste and the Borrower
(i) setting forth the information required pursuant to Sections 1, 2, 7, 8, 9
and 10 of the Perfection Certificates or confirming that there has been no
change in such information since the date of the Perfection Certificate
delivered on the Effective Date or the date of the most recent report delivered
pursuant to paragraph (a) of this Section.
SECTION 5.16A. Casualty and Condemnation. (a) The Borrower (a)
will furnish to the Administrative Agent and the Lenders prompt written notice
of any casualty or other insured damage to any material portion of any
Collateral or the commencement of any action or proceeding for the taking of any
Collateral or any part thereof or interest therein under power of eminent domain
or by condemnation or similar proceeding and (b) will ensure that the Net
Available Proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected and applied in accordance with
the applicable provisions of the Loan Documents.
SECTION 5.17A. Compliance with Laws. It will, and will cause
each of its Restricted Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
<PAGE>
SECTION 5.18A. Use of Proceeds and Letters of Credit. The
proceeds of the Term Loans, together with the proceeds of the Sponsor Preferred
Stock and the Senior Subordinated Notes will be used only for the payment of (a)
the Merger Consideration, (b) fees and expenses payable in connection with the
Transactions, (c) the repayment of the Indebtedness and other obligations under
the Existing Credit Agreement and the BFI Credit Facility, (d) the repayment of
commercial paper of BFI and (e) the payment of severance and termination
obligations of BFI in connection with the Merger. The proceeds from the Senior
Subordinated Notes shall also be used to repay the Tranche D Loans. The proceeds
of the Revolving Loans and Swingline Loans will be used only for Permitted
Acquisitions, Investments permitted by Section 6.05A, Capital Expenditures
payments, if any, arising out of the exercise by BFI stockholders of their
appraisal rights in connection with the Merger and general corporate purposes,
including working capital. No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of
Regulations U or X of the Board.
SECTION 5.19A. Interest Rate Protection. As promptly as
practicable, and in any event within 90 days after the Effective Date, the
Borrower will enter into, and thereafter for a period of not less than 3 years
will maintain in effect, one or more interest rate protection agreements on such
terms and with such parties as shall be reasonably satisfactory to the Initial
Lenders, the effect of which shall be to fix or limit the interest cost to the
Borrower with respect to at least 50% of the Loans at the time outstanding.
SECTION 5.20A. Asset Sales. Allied Waste and the Borrower will
use their commercially reasonable efforts to sell or cause their Subsidiaries to
sell the assets listed on Schedule 5.20 as soon as reasonably possible after the
Effective Date for Net Available Proceeds in an aggregate amount sufficient to
repay all amounts then outstanding under the Asset Sale Term Loan; provided that
the foregoing shall not require the sale of Specified Assets at terms or prices
which management of Allied Waste believes does not fairly represent the current
value of the assets being offered.
SECTION 5.21A. Termination of Liens. It will deliver to the
Administrative Agent, within 60 days after the Effective Date, a fully executed
Form UCC-3 Financing Statement Change reasonably satisfactory to the
Administrative Agent terminating each of the Existing Liens listed on Schedule
6.02(ii) and any other documents reasonably requested by the Administrative
Agent for the purpose of terminating such Existing Liens; provided, that such 60
day period may be extended by the Administrative Agent in its discretion by an
additional 60 days if the Administrative Agent is satisfied with the progress of
such terminations; provided further, that the Administrative Agent may waive
such termination requirement for any Existing Lien on Schedule 6.02(ii) if, in
its judgment, such Lien is insignificant or the UCC filing to be terminated
relates to obligations that have been repaid or extinguished.
ARTICLE V-B
Tranche D Affirmative Covenants
Until the Tranche D Commitments have expired or been
terminated and the principal of an interest on each Tranche D Loan and all fees
payable to Tranche D Lenders shall have been paid in full, each of Allied Waste
and the Borrower covenants and agrees with the Tranche D Lenders that:
SECTION 5.01B. Existence; Businesses and Properties. It will,
and will cause each of its Restricted Subsidiaries to:
(a) Do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence, except as
otherwise expressly permitted under Section 6.06B and except for
failures by Restricted Subsidiaries to do so which could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
<PAGE>
(b) Do or cause to be done all things necessary to obtain,
preserve, or renew, licenses, permits, franchises, authorizations,
patents, copyrights, trademarks and trade names material to the conduct
of its business; maintain and operate such business in substantially
the manner in which it is presently conducted and operated; comply with
all applicable laws, rules, regulations and decrees and orders of any
Governmental Authority, whether now in effect or hereafter enacted,
except for failures to comply which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
and at all times maintain and preserve all property material to the
conduct of such business and keep such property in good repair, working
order and condition and from time to time make, or cause to be made,
all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times, except for
failures to maintain and preserve property that could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
SECTION 5.02B. Insurance. It will, and will cause each of its
Restricted Subsidiaries to:
(a) Keep its insurable properties adequately insured at all
times by financially sound and reputable insurers, or by way of
adequate self-insurance; maintain such other insurance or
self-insurance, to such extent and against such risks, including fire
and other risks insured against by extended coverage, as is customary
with companies in the same or similar businesses operating in the same
or similar locations, including public liability insurance or
self-insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any
properties owned, occupied or controlled by it; and maintain such other
insurance or self-insurance as may be required by law. All insurance
policies may provide for reasonable deductible amounts.
(b) If any separate or additional property, casualty or
"umbrella" insurance policy is known by a Responsible Officer to have
been obtained by any member of the Allied Group, notify the
Administrative Agent thereof promptly, and promptly deliver to the
Administrative Agent a duplicate original copy of such policy.
SECTION 5.03B. Obligations and Taxes. It will, and will cause
each of its Subsidiaries to, pay its Indebtedness and other obligations promptly
and in accordance with their terms and pay and discharge promptly when due all
Taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or in respect of its property, before the same shall
become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise that, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided that (x) such payment of
Indebtedness or claims for labor, material or supplies shall not be required
pursuant to this Section 5.03B to the extent failure to so pay could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect and would not result in any Senior Event of Default hereunder;
and (y) such payment and discharge shall not be required with respect to any
such Tax, assessment, charge, levy or claim so long as either (i) the validity
or amount thereof shall be contested in good faith by appropriate proceedings
and Allied Waste or the relevant Subsidiary shall have set aside on its books
adequate reserves with respect thereto in accordance with GAAP and such contest
operates to suspend collection of the contested obligation, Tax, assessment or
charge and enforcement of a Lien or (ii) such amount not so paid or discharged
is less than $50,000,000 in the aggregate.
<PAGE>
SECTION 5.04B. Financial Statements, Reports, Etc. Allied
Waste shall furnish to the Administrative Agent (and the Administrative Agent
shall furnish to each Lender):
(a) within seven days after the filing with the Securities
and Exchange Commission of Allied Waste's Annual Report on Form 10-K
with respect to each fiscal year (and in any event within 105 days
after the end of such fiscal year), its Consolidated balance sheet and
related statements of operation's, stockholders' equity and cash flows
showing the financial condition of Allied Waste and its Restricted
Subsidiaries as of the close of such fiscal year and the results of its
operations and the operations of such Restricted Subsidiaries during
such year, all audited by Arthur Andersen LLP or other independent
public accountants of recognized national standing acceptable to the
Administrative Agent and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the effect
that such Consolidated financial statements fairly present the
financial condition and results of operations of Allied Waste and its
Restricted Subsidiaries on a Consolidated basis in accordance with GAAP
(it being understood that such financial statements and opinion may be
delivered, if included therein, in the form of such Annual Report on
Form 10-K and any related Annual Report to Stockholders);
(b) within seven days after the filing with the Securities and
Exchange Commission of Allied Waste's Quarterly Report on Form 10-Q
with respect to each of the first three fiscal quarters of each fiscal
year (and in any event within 60 days after the end of each such fiscal
quarter), its Consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows showing the financial
condition of Allied Waste and its Restricted Subsidiaries as of the
close of such fiscal quarter and the results of its operations and the
operations of such Restricted Subsidiaries during such fiscal quarter
and the then elapsed portion of the fiscal year, all certified by one
of its Financial Officers as fairly presenting the financial condition
and results of operations of Allied Waste and its Restricted
Subsidiaries on a Consolidated basis in accordance with GAAP, subject
to normal year-end audit adjustments and lack of footnote disclosures
(it being understood that such financial statements may be delivered,
if included therein, in the form of such Quarterly Report on Form
10-Q);
(c) concurrently with any delivery of financial statements
under paragraph (a) or (b) above, a certificate of the accounting firm
or Financial Officer opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility for legal
interpretations) (i) certifying that in making its examination in
connection with rendering such opinion or certificate with respect to
such statements, such Person has not obtained knowledge that an Event
of Default or, if such certificate is of a Financial Officer, a Default
has occurred or, if such Financial Officer has obtained knowledge that
an Event of Default or, if such certificate is of a Financial Officer,
a Default has occurred, specifying the nature and extent thereof and
any corrective action taken or proposed to be taken with respect
thereto and (ii) setting forth computations in reasonable detail
satisfactory to the Administrative Agent demonstrating compliance with
the covenants contained in Sections 6.04B, 6.05B, 6.06B, 6.08B and
6.15B;
<PAGE>
(d) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by any member of the Allied Group with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of said Commission, or with any national
securities exchange, or distributed to its shareholders, as the case
may be;
(e) at the time required for delivery of financial statements
pursuant to paragraph (a) or (b) of this Section, (x) a report in form
and substance reasonably satisfactory to the Administrative Agent of
all Permitted Acquisitions consummated during the most recent fiscal
quarter covered by such financial statements, which report shall
identify, inter alia, each Permitted Acquisition having total
Acquisition Consideration of $25,000,000 or more (a "Large
Acquisition") and, for each Large Acquisition, a description of the
total Acquisition Consideration therefor; and (y) a list of all
entities that became or ceased to be Domestic Subsidiaries of Allied
Waste during such fiscal quarter;
(f) promptly from time to time, such other information
regarding the operations, business affairs and financial condition of
members of the Allied Group, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Tranche D Lender acting
through the Administrative Agent may reasonably request; and
(g) within 90 days after the beginning of each fiscal year, a
copy of the annual forecasts of Allied Waste, prepared by management of
Allied Waste, in each case in form and detail reasonably satisfactory
to the Administrative Agent, consisting of Consolidated balance sheets
and related statements of operations and cash flows of Allied Waste and
its Restricted Subsidiaries for such fiscal year and for each of the
following fiscal years occurring in whole or in part during the term of
this Agreement.
SECTION 5.05B. Litigation and Other Notices. It will, and
will cause each of its Restricted Subsidiaries to, furnish to the Administrative
Agent and each Tranche D Lender:
(a) as soon as possible and in any event within five Business
Days after any Responsible Officer has knowledge thereof, written
notice that a Tranche D Default or Tranche D Event of Default has
occurred, specifying the nature and extent thereof and the corrective
action (if any) taken or proposed to be taken with respect thereto;
(b) as soon as possible and in any event within five Business
Days after any Responsible Officer has knowledge thereof, written
notice of the filing or commencement of, or of any threat or notice of
intention of any Person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against any member of the Allied Group that
could, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect;
(c) prompt written notice of any development known to any
Responsible Officer that has had, or could, individually or in the
aggregate, reasonably be expected to have, a Material Adverse Effect;
and
<PAGE>
(d) as soon as possible and in any event within five Business
Days after any Responsible Officer has knowledge thereof, written
notice that a Change in Control has occurred or is reasonably likely to
occur.
SECTION 5.06B. Employee Benefits. It will, and will cause
each of its Subsidiaries to:
(a) comply with the applicable provisions of ERISA and the
Code (excluding, however, noncompliance that could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect); and
(b) furnish to the Administrative Agent (i) as soon as
possible after, and in any event within 10 days after any Responsible
Officer has knowledge that, any ERISA Event has occurred and is then
outstanding that, alone or together with any other ERISA Event could
reasonably be expected to result in liability of any member of the
Allied Group in an aggregate amount exceeding $5,000,000 or (ii)
requiring payments by any member of the Allied Group exceeding
$2,500,000 in any year, a statement of a Financial Officer of the
Borrower, setting forth details as to such ERISA Event and the action,
if any, that Allied Waste proposes to take with respect thereto.
SECTION 5.07B. Maintaining Records; Access to Properties and
Inspections. It will, and will cause each of its Subsidiaries to, keep proper
books of record and account sufficient to permit the preparation of financial
statements in conformity with GAAP. Each of Allied Waste and the Borrower will,
and will cause each of its Restricted Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Tranche D Lender
to visit and inspect (at the expense of the Lenders unless an Event of Default
has occurred and is continuing, in which case at the expense of the Borrower)
the records, books, accounts and the properties of members of the Allied Group
at reasonable times, with reasonable notice and without causing material
disruption, and as often as reasonably requested and to make extracts from and
copies of such records, books and accounts and permit any representatives
designated by the Administrative Agent or any Tranche D Lender to discuss the
affairs, finances and condition of members of the Allied Group with the officers
thereof and independent accountants therefor (subject to reasonable requests of
confidentiality, including requirements imposed by law or contract).
SECTION 5.08B. Environmental Laws. It will, and will cause of
each of its Subsidiaries to:
<PAGE>
(a) comply, and use commercially reasonable efforts to cause
all lessees and other Persons occupying its Properties to comply, in
all respects with all Environmental Laws and Environmental Permits
applicable to its operations and Properties; obtain and renew all
Environmental Permits necessary for its operations and Properties;
maintain appropriate financial assurance mechanisms in connection with
its landfill operations as required under Environmental Law; and
conduct any remedial action in accordance with Environmental Laws,
except where such noncompliance or failure to obtain or renew
Environmental Permits, maintain financial assurance mechanisms or to
conduct any remedial action could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
provided that no member of the Allied Group shall be required to
conduct remedial actions to the extent that any applicable obligation
to do so is being contested in good faith and by proper proceedings and
appropriate reserves are being maintained with respect to such
circumstances; and
(b) with respect to any Permitted Acquisition having
Acquisition Consideration in excess of $50,000,000, and any acquisition
of any other ownership or leasehold interest in, or the entry into any
agreement to conduct operations of, any landfill, transfer station or
other waste treatment or disposal facility the total value of which is
in excess of $50,000,000, prior to consummating any such acquisition or
commencement of any operations under any such agreement or lease,
obtain and review a written assessment, prepared by an environmental
consulting firm recognized within the municipal solid waste industry
and among environmental professionals as competent and reputable and
which the Borrower has reasonably determined to be suitable, that
reasonably addresses compliance with Environmental Law and material
Environmental Liabilities associated with the subject of such
acquisition, agreement or lease.
SECTION 5.09B. Preparation of Environmental Reports. If a
Tranche D Default or Tranche D Event of Default caused by reason of a breach of
Section 3.16 or 5.08B shall have occurred and be continuing, the Administrative
Agent is authorized to engage an environmental consulting firm selected by the
Administrative Agent reasonably acceptable to Allied Waste to prepare, on behalf
of the Administrative Agent, the Lenders and the Issuing Banks but at the sole
cost and expense of the Borrower, an environmental site assessment report for
the Properties which are the subject of such default, which environmental site
assessment report shall estimate the cost of any compliance or remedial action
(if such costs are reasonably ascertainable) and evaluate potentially material
Environmental Claims and potentially material Environmental Liabilities in
connection with such Properties. Each of Allied Waste and the Borrower will, and
will cause each of its Subsidiaries to, cooperate fully with the Administrative
Agent and such environmental consulting firms in their preparation of such
environmental assessment reports, including (without limitation), permitting any
representatives designated by the Administrative Agent or such environmental
consulting firms to visit and inspect the related Properties at reasonable times
and as often as reasonably requested and to make extracts from and copies of
environmental records of the members of the Allied Group. If requested by the
Borrower, the Borrower shall be entitled to have access to the data relating to
such environmental assessment reports.
SECTION 5.10B. Compliance with Terms of Leaseholds. It will
make, and will cause each of its Restricted Subsidiaries to make, all payments
and otherwise perform all material obligations in respect of all Material Leases
to which a member of the Allied Group is a party, keep such Material Leases in
full force and effect and not allow such Material Leases to lapse or be
terminated or any rights to renew such Material Leases to be forfeited or
canceled, notify the Administrative Agent of any default by any party with
respect to such Material Leases and cooperate with the Administrative Agent in
all respects to cure any such default and cause each of Allied Waste's
Restricted Subsidiaries to do so, except, in any case, where the failure to do
any of the foregoing, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
<PAGE>
SECTION 5.11B. Performance of Material Agreements. It will,
and will cause each of its Restricted Subsidiaries to perform and observe all of
the terms and provisions of each Material Agreement, maintain each such Material
Agreement in full force and effect, enforce such Material Agreement in
accordance with its terms, except, in any case, where the failure to do any of
the foregoing could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
SECTION 5.12B. Inactive Subsidiaries. Except as specified on
Schedule 5.12, Allied Waste shall cause each Inactive Subsidiary to be dissolved
within 90 days of the date hereof; provided that if after such period Allied
Waste has not caused any Inactive Subsidiary to be so dissolved, then each such
Inactive Subsidiary shall be deemed to be (as of such 90th day) a newly formed
Specified Subsidiary for purposes of Section 5.18B.
SECTION 5.13B. Year 2000. Allied Waste will use its
commercially reasonable efforts to ensure that any computer systems and/or
software used in the operation of Allied Waste's or any of its Subsidiaries'
businesses is modified or replaced to the extent necessary to prevent or avoid
any the occurrence of any Material Adverse Effect as a result of the
commencement of the year 2000.
SECTION 5.14B. Compliance with Laws. It will, and will cause
each of its Restricted Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.15B. Use of Proceeds and Letters of Credit. The
proceeds of the Term Loans, together with the proceeds of the Sponsor Preferred
Stock and the Senior Subordinated Notes will be used only for the payment of (a)
the Merger Consideration, (b) fees and expenses payable in connection with the
Transactions, (c) the repayment of the Indebtedness and other obligations under
the Existing Credit Agreement and the BFI Credit Facility, (d) the repayment of
commercial paper of BFI and (e) the payment of severance and termination
obligations of BFI in connection with the Merger. The proceeds of the Revolving
Loans and Swingline Loans will be used only for Permitted Acquisitions,
Investments permitted by Section 6.05B, Capital Expenditures payments, if any,
arising out of the exercise by BFI stockholders of their appraisal rights in
connection with the Merger and general corporate purposes, including working
capital. No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of Regulations U or X of
the Board.
SECTION 5.16B. Interest Rate Protection. As promptly as
practicable, and in any event within 90 days after the Effective Date, the
Borrower will enter into, and thereafter for a period of not less than 3 years
will maintain in effect, one or more interest rate protection agreements on such
terms and with such parties as shall be reasonably satisfactory to the Initial
Lenders, the effect of which shall be to fix or limit the interest cost to the
Borrower with respect to at least 50% of the Loans at the time outstanding.
<PAGE>
SECTION 5.17B. Asset Sales. Allied Waste and the Borrower will
use their commercially reasonable efforts to sell or cause their Subsidiaries to
sell the assets listed on Schedule 5.20A as soon as reasonably possible after
the Effective Date for Net Available Proceeds in an aggregate amount sufficient
to repay all amounts then outstanding under the Asset Sale Term Loan; provided
that the foregoing shall not require the sale of Specified Assets at terms or
prices which management of Allied Waste believes does not fairly represent the
current value of the assets being offered.
SECTION 5.18B. Further Assurances to the Tranche D Lenders. It
will, and will cause each of its Restricted Subsidiaries to:
(a) Take such action from time to time as shall be necessary
to ensure that all Specified Subsidiaries (including Specified
Subsidiaries formed or acquired pursuant to Permitted Acquisitions) are
parties to the Subordinated Subsidiary Guarantee Agreement hereunder;
provided, however, that the foregoing shall not apply to Specified
Subsidiaries with unaffiliated minority holders of Voting Stock which
do not provide required consent to such Subordinated Subsidiary
Guarantee Agreement; provided, further, that Allied Waste and the
Borrower shall use commercially reasonable efforts to obtain any such
required consents. Without limiting the generality of the foregoing, in
the event that Allied Waste or any of the Specified Subsidiaries shall
form or acquire any new Subsidiary after the date hereof that shall
constitute a Specified Subsidiary, and in connection with each
Permitted Acquisition, Allied Waste and the Specified Subsidiaries
will, promptly after such formation or Permitted Acquisition:
(i) cause each new Specified Subsidiary to become
party to the Subordinated Subsidiary Guarantee Agreement;
and
(ii) deliver such proof of corporate or other
borrower action, incumbency of officers, opinions of counsel
and other documents as the Administrative Agent shall have
reasonably requested.
SECTION 5.19B. Additional Permitted Subordinated Debt.
Notwithstanding any other provision of this Agreement, the Borrower will issue,
as promptly as reasonably possible, an aggregate principal amount of Senior
Subordinated Notes equal to not less than $2,000,000,000 and not more than
$2,500,000,000 (depending on the amount of Net Available Proceeds from Asset
Sales or the issuance of Equity Interests that the Borrower anticipates will be
applied to the reduction of the Tranche D Commitments or Tranche D Term Loans
pursuant to and in accordance with Section 2.10(f) and (j)).
<PAGE>
SECTION 5.20B. Preliminary Offering Memorandum. The Borrower
will deliver to the Initial Lenders, as promptly as reasonably possible, a
preliminary prospectus or preliminary offering memorandum or preliminary private
placement memorandum (any of the foregoing referred to herein, as a "Preliminary
OM") suitable for use in a customary "high-yield road show" relating to the
Senior Subordinated Notes, which contains all financial statements and other
data to be included therein, including all audited financial statements, all
unaudited financial statements that would be necessary for the sale of the
Senior Subordinated Notes in the high-yield market. The Borrower agrees that if,
at any time prior to completion of the sale or placement of the Senior
Subordinated Notes with the purchasers thereof, any event shall occur or
condition exist as a result of which it is necessary, in the opinion of counsel
for the Initial Lenders or counsel for the Borrower, to amend or supplement the
Preliminary OM in order that the Preliminary OM will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing at
the time it is delivered to purchaser, not misleading, or if it is necessary to
amend or supplement the Preliminary OM to comply with applicable law, to
promptly prepare such amendment or supplement as may be necessary to correct
such untrue statement or omission or so that the Preliminary OM, as so amended
or supplemented, will comply with applicable law.
ARTICLE VI-A
Negative Covenants
Until the Senior Commitments have expired or terminated and
the principal of and interest on each Senior Loan and all fees payable to Senior
Lenders and Issuing Banks hereunder have been paid in full and all Letters of
Credit have expired or been terminated and all LC Disbursements shall have been
reimbursed, each of Allied Waste and the Borrower covenants and agrees with the
Senior Lenders that:
SECTION 6.01A. Indebtedness; Certain Equity Securities. (a)
Allied Waste and the Borrower will not, and will not permit any Restricted
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:
(i) Indebtedness created under the Loan Documents;
(ii) the Senior Subordinated Notes outstanding on the
Effective Date in an aggregate principal amount not to exceed
$2,500,000,000 and Permitted Subordinated Debt (including Senior
Subordinated Notes and Exchange Notes) issued after the Effective Date
to refinance (and in a principal amount not in excess of the principal
amount of) the Tranche D Loans outstanding as of the Effective Date;
(iii) Indebtedness (including Guarantees) existing on the date
hereof and set forth in Schedule 6.01A;
(iv) Hedging Agreements permitted pursuant to Section 6.07A;
(v) Acquired Indebtedness of a Restricted Subsidiary acquired
after the date hereof and Acquired Indebtedness of a corporation merged
or consolidated with or into the Borrower or a Restricted Subsidiary
after the date hereof, which Indebtedness in each case exists at the
time of such acquisition, merger, consolidation or conversion into a
Restricted Subsidiary and is not created in contemplation of such event
and where such acquisition, merger or consolidation is permitted by
this Agreement; provided that the Borrower and the Restricted
Subsidiaries comply with the provisions of Section 5.10A with respect
to any such acquired or newly formed Restricted Subsidiary;
(vi) unsecured Indebtedness of Allied Waste, the Borrower or
any Restricted Subsidiary that is issued to a seller of an Acquired
Business and incurred in connection with a Permitted Acquisition;
<PAGE>
(vii) unsecured Guarantees in respect of (x) Indebtedness
permitted pursuant to subparagraphs (ii), (v), (vi), (xiii), and (xv)
of this Section 6.01A, and (y) Indebtedness of Ref-Fuel; provided that
such Guarantees pursuant to this clause (vii)(y) are required to be
provided pursuant to contractual obligations existing on the date
hereof; provided that any Guarantees in respect of Indebtedness that is
subordinated to any of the Senior Obligations or to Guarantees of the
Senior Obligations shall also be subordinated to the Guarantees in
favor of the Senior Lenders under the Loan Documents or to the Senior
Obligations, as the case may be, to the same extent as such
Indebtedness is subordinated to any of the Senior Obligations;
(viii) Indebtedness of the Borrower or any Subsidiary Loan
Party to any other Subsidiary or the Borrower, so long as such
Indebtedness is subordinated to all Senior Obligations and all Tranche
D Obligations;
(ix) subordinated Indebtedness (i) of Allied Waste to the
Borrower or any wholly owned Subsidiary, so long as the proceeds of
such Indebtedness are used by Allied Waste solely for purposes
permitted under Section 6.10(A), or (ii) of the Borrower or any wholly
owned Restricted Subsidiary to Allied Waste;
(x) Indebtedness of the Borrower and Allied Waste under the
Allied Guarantee;
(xi) Indebtedness (including tax exempt financings and Capital
Lease Obligations) of the Borrower or the Restricted Subsidiaries
incurred after the Effective Date to finance Capital Expenditures
permitted under Section 6.15A; provided that (A) such Indebtedness is
incurred prior to or within 120 days after the acquisition, completion
of construction, refurbishment or improvement of the fixed or capital
assets being financed and does not exceed 100% of the cost thereof and
(B) the aggregate principal amount of (1) any Indebtedness incurred
pursuant to this paragraph (xi) and (2) Capital Lease Obligations
pursuant to Section 6.04A outstanding at any time shall not exceed the
greater of (I) $700,000,000 and (II) an amount equal to 5% of
Consolidated Total Assets;
(xii) Indebtedness incurred pursuant to any sale and leaseback
transaction permitted by Section 6.04A;
(xiii) extensions, renewals or refinancings of Indebtedness
under paragraphs (iii) and (v) so long as (1) such Indebtedness
("Refinancing Indebtedness") is in an original aggregate principal
amount not greater than the aggregate principal amount of, and unpaid
interest on, the Indebtedness being extended, renewed or refinanced
plus the amount of any premiums required to be paid thereon and fees
and expenses associated therewith, (2) such Refinancing Indebtedness
has a later or equal final maturity and a longer or equal weighted
average life than the Indebtedness being extended, renewed or
refinanced, (3) the interest rate applicable to such Refinancing
Indebtedness shall be a market interest rate (as determined in good
faith by the Board of Directors of the Borrower) as of the time of such
extension, renewal or refinancing, (4) if the Indebtedness being
extended, renewed or refinanced is subordinated to the Senior
Obligations, such Refinancing Indebtedness is subordinated to the
Senior Obligations, (5) the covenants, events of default and any
Guarantees thereof, taken as a whole, shall be determined in good faith
by the board of directors of the Borrower to be no less favorable to
the Lenders than those contained in the Indebtedness being refinanced
and (6) at the time and after giving effect to such renewal or
refinancing, no Senior Event of Default shall have occurred and be
continuing;
<PAGE>
(xiv) Indebtedness consisting of reimbursement obligations
under surety, indemnity, performance, release and appeal bonds and
guarantees thereof, in each case securing obligations not constituting
Indebtedness for borrowed money and obtained in the ordinary course of
business;
(xv) Indebtedness of Foreign Subsidiaries, Insurance
Subsidiaries, and other Restricted Subsidiaries that are not Subsidiary
Loan Parties incurred after the Effective Date in an aggregate
principal amount outstanding at any time not exceeding the greater of
(1) $280,000,000 and (2) 2% of Consolidated Total Assets;
(xvi) unsecured Indebtedness of the Borrower or Allied Waste
in addition to that permitted by paragraphs (i) through (xv) above;
provided that such Indebtedness has a longer or equal weighted average
life than the Senior Term Loans hereunder, such Indebtedness is
permitted pursuant to Section 6.14A and 100% of the Net Available
Proceeds of such Indebtedness are utilized to prepay Term Loans in
accordance with Section 2.11(c);
(xvii) contingent liabilities arising out of endorsements of
checks and other negotiable instruments for deposit or collection in
the ordinary course of business;
(xviii) other Indebtedness of Allied Waste, the Borrower and
the Restricted Subsidiaries in an aggregate principal amount
outstanding at any time not exceeding the greater of (1) $420,000,000
and (2) 3% of Consolidated Total Assets; and
(xix) all premiums (if any), interest (including post-petition
interest and other than capitalized interest), fees, expenses,
indemnities, charges and additional or contingent interest on
obligations described in clauses (i) through (xviii) above.
(b) Neither Allied Waste nor the Borrower will, nor
will they permit any Restricted Subsidiary to, issue any Preferred
Stock or other preferred Equity Interests, other than the Sponsor
Preferred Stock and other Non-Cash Pay Preferred Stock of Allied Waste
or the Borrower unless the Net Available Proceeds thereof are applied
in the manner and to the extent required under Section 2.11(c).
SECTION 6.02A. Liens. Neither Allied Waste nor the Borrower
will, nor will it cause or permit any of the Restricted Subsidiaries to, create,
incur, assume or permit to exist any Lien on any property or assets (including
stock or other securities of any Person, including any Subsidiary of Allied
Waste) now owned or hereafter acquired by it or on any income or revenues or
rights in respect of any thereof, except:
(a) Liens on properties or assets of members of the Allied
Group existing on the date hereof and set forth in Schedule 6.02
(excluding, however, following the making of the initial extensions of
credit hereunder, the Indebtedness to be repaid with the proceeds of
such Loans, as indicated on Schedule 6.02); provided that such Liens
shall secure only those obligations (and extensions, renewals and
refinancings thereof permitted hereby) which they secure on the date
hereof;
(b) Liens created under the Loan Documents;
<PAGE>
(c) Permitted Encumbrances;
(d) purchase money security interests in real property,
improvements thereto, equipment or other fixed assets hereafter
acquired (or, in the case of improvements, equipment or other fixed
assets, constructed or refurbished) by the Borrower or any Subsidiary
(including such security interests arising out of Capital Lease
Obligations); provided that (i) such security interests secure
Indebtedness permitted by Section 6.01A(xi), (ii) such security
interests are incurred, and the Indebtedness secured thereby is
created, within 120 days after such acquisition (or completion of such
construction), (iii) the Indebtedness secured thereby does not exceed
100% of the cost of such real property, improvements or equipment at
the time of such acquisition (or construction) and (iv) such security
interests do not apply to any other property or assets of the Borrower
or any Restricted Subsidiary (other than the proceeds of the real
property, improvements, equipment or other fixed assets subject to the
Lien);
(e) Liens securing Refinancing Indebtedness, to the extent
that the Indebtedness being refinanced was originally secured in
accordance with this Section 6.02A, provided that such Lien does not
apply to any additional property or assets of Allied Waste, the
Borrower or any Subsidiary (other than additions to and the proceeds of
the property or asset subject to the Lien) and provided that
Refinancing Indebtedness relating to the AWNA Senior Notes or the BFI
Indenture Debt shall not be secured by any Lien or entitled to the
benefits of the Shared Collateral Pledge Agreement or Shared Collateral
Security Agreement;
(f) any Lien on the property or assets of an Acquired Business
(other than on the stock or Equity Interests of a Subsidiary) securing
Indebtedness permitted by Section 6.01A(v); provided that such Lien
existed at the time of and was not created in contemplation of the
acquisition of such Acquired Business;
(g) Liens arising from Uniform Commercial Code financing
statements and similar documents filed on a precautionary basis in
respect of operating leases intended by the parties to be true leases
(other than any such leases entered into in violation of this
Agreement);
(h) any Lien on the property or assets of any Foreign
Subsidiary, Insurance Subsidiary or other Restricted Subsidiary that is
not a Loan Party Subsidiary securing Indebtedness permitted by Section
6.01A(xv); and
(i) additional Liens on property (but not on the capital stock
or other ownership interests of any Subsidiary owned by the Borrower,
Allied Waste or any Subsidiary Loan Party) to secure Indebtedness
(including, without limitation, Capital Lease Obligations in addition
to those permitted by paragraph (d) of this Section 6.02A) so long as
neither the outstanding aggregate principal amount of such Indebtedness
nor the aggregate book value of assets subject to such Liens at any
time exceeds the greater of (1) $420,000,000 and (2) 3% of Consolidated
Total Assets.
<PAGE>
(j) any Lien pursuant to Environmental Law for costs or
damages which are not yet due (by virtue of a written demand for
payment by a Governmental Authority) or which are being contested in
compliance with the standard set forth in section 5.08(A)(a), or on
property that the Borrower or a Subsidiary has determined to abandon if
the sole recourse for such costs or damages is to such property;
provided that the liability of the Borrower and the Subsidiaries with
respect to the matters giving rise to all such Liens shall not, in the
reasonable estimate of the Borrower (in light of all attendant
circumstances, including the likelihood of contribution by third
parties), exceed the greater of (i) $280,000,000 and (ii) 2% of the
Consolidated Total Assets;
Neither Allied Waste, the Borrower, nor any Restricted Subsidiary will issue or
assume any Indebtedness under the AWNA Senior Note Indenture, the BFI Indenture
or any supplement or amendment thereto if such Indebtedness would be entitled to
be secured on a pari passu basis with the Senior Obligations or otherwise by any
Lien on any Collateral securing the Senior Obligations.
SECTION 6.03A. No Other Negative Pledge. Allied Waste will
not, nor will it cause or permit any of its Restricted Subsidiaries to, enter
into any agreement prohibiting or conditioning (including pursuant to any pari
passu security requirement) the creation or assumption of any Lien upon any of
its property or assets other than:
(i) in favor of the Senior Lenders, the Issuing Banks or the
Secured Parties;
(ii) in favor of the holders of Tranche D Term Loans, Exchange
Notes or Permitted Subordinated Debt; provided that such agreement does
not so restrict Liens securing the Senior Obligations;
(iii) in connection with Indebtedness that may be secured by a
Lien or in connection with obligations secured by Permitted
Encumbrances in compliance with Section 6.02(A)(a), (d), (e), (f), (g),
(h) or (i); provided that such prohibition or condition does not apply
to any property or assets now or hereafter in existence not subject to
such Lien;
(iv) in connection with any lease permitted under Section
6.04A solely to the extent that such lease prohibits a Lien on the
lease or the property subject to such lease; or
(v) pursuant to any agreement entered into by any member of
the Allied Group in connection with an Asset Sale for the period
beginning with the date such agreement is entered into through the date
such Asset Sale is consummated; provided that (x) such negative pledge
shall only relate to the property being sold pursuant to such Asset
Sale and (y) such Asset Sale is permitted hereunder.
<PAGE>
SECTION 6.04A. Sale and Lease-Back Transactions. Allied Waste
will not, nor will it cause or permit any of its Restricted Subsidiaries to,
enter into any arrangement, directly or indirectly, with any Person whereby it
shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property which it intends to use for substantially the
same purpose or purposes as the property being sold or transferred; provided
that (i) the Borrower or any Restricted Subsidiary may enter into any such
transaction with respect to any lease that is required to be capitalized in
accordance with GAAP and is in compliance with Section 6.02A(d) or (i) and (ii)
the aggregate principal amount of (1) Capital Lease Obligations associated
therewith and (2) any Indebtedness incurred pursuant to Section 6.01A(xi) at any
time outstanding does not exceed the greater of (A) $700,000,000 and (B) 5% of
Consolidated Total Assets.
SECTION 6.05A. Investments, Loans, Guarantees and
Acquisitions. Allied Waste will not, and will not permit any of its Restricted
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Restricted Subsidiary prior to such
merger) any Investment in any other Person, or purchase or otherwise acquire (in
one transaction or a series of transactions) any assets of any other Person
constituting a business unit, except:
(a) Investments by Allied Waste and the Borrower (i) existing
on the date hereof and (ii) made after the date hereof in the capital
stock or other ownership interests of the Borrower and entities that,
prior to and after such investments, are Loan Parties; loans or
advances by the Borrower or any Loan Party to the Borrower or any Loan
Party; and loans or advances by the Borrower or any Loan Party to
Allied Waste or by Allied Waste to the Borrower or any Loan Party;
provided that in any event no Loan Party shall make any Investments in,
or loans or advances to any Insurance Subsidiary, any Foreign
Subsidiary, any Restricted Subsidiary that is not a Loan Party or any
Unrestricted Subsidiary after the date hereof (other than in accordance
with clause (i) below);
(b) the Merger;
(c) Permitted Investments;
(d) Investments by the members of the Allied Group existing on
the date hereof and set forth in Schedule 6.05;
(e) loans and advances to employees of members of the Allied
Group (including for travel, entertainment and relocation expenses) in
the ordinary course of their business;
(f) loans by members of the Allied Group to their employees in
connection with management incentive plans not to exceed $25,000,000 at
any time outstanding; provided that such limitation shall not apply to
loans the proceeds of which are used to purchase common stock of Allied
Waste;
(g) guarantees not constituting Indebtedness by Allied Waste
or any Restricted Subsidiary of any contractual obligation (not
Indebtedness) of the Borrower or any Loan Party;
(h) Investments in the capital stock or other ownership
interests of any Specified Subsidiary newly organized after the date
hereof, provided that (i) such capital stock or interest is pledged to
the Collateral Agent or the Collateral Trustee pursuant to the
Non-Shared Collateral Pledge Agreement or the Shared Collateral Pledge
Agreement and (ii) Allied Waste, the Borrower and such Subsidiary
comply with the applicable provisions of Section 5.10A with respect to
such newly formed Subsidiary;
(i) other Investments made after the Effective Date in an
aggregate amount at any time outstanding not to exceed the greater of
(x) $420,000,000 and (y) 3% of Consolidated Total Assets;
<PAGE>
(j) extensions of trade credit in the ordinary course of
business in an aggregate amount not at any time exceeding $25,000,000;
(k) receivables owing to members of the Allied Group that
arise in the ordinary course of business and are payable or
dischargeable in accordance with customary trade terms;
(l) Permitted Acquisitions and other transactions permitted by
6.06A;
(m) investments in or acquisitions of landfills, collection
centers or other producing assets located in the United States pursuant
to contemporaneous exchanges of similar assets with any other Person;
provided that any portion of assets acquired for consideration other
than any such exchange shall be deemed a Capital Expenditure and be
subjected to the limitations of Section 6.15A;
(n) any Investment consisting of a Hedging Agreement permitted
by Section 6.07A;
(o) any Investment acquired by any of the Loan Parties (A) in
exchange for any other Investment or accounts receivable held by such
Loan Party as a result of a bankruptcy, workout, reorganization or
recapitalization of the issuer of such other Investment or accounts
receivable; (B) as a result of a foreclosure by such Loan Party or
other transfer of title with respect to any secured Investment in
default or (C) in connection with the acquisition of an Acquired
Business permitted hereunder which was an Investment of such Acquired
Business existing prior to the date of such acquisition and not made in
contemplation thereof; and
(p) Investments in Ref-Fuel and Guarantees of Indebtedness of
Ref-Fuel required to be provided pursuant to contractual obligations
existing on the date hereof by any Loan Party.
<PAGE>
Notwithstanding any other provision of this Agreement but subject to the proviso
below, Allied Waste and the Borrower will not, and will not permit any
Restricted Subsidiary to, (i) effect any acquisition (including any Permitted
Acquisition) of a business concern or purchase or acquire any Equity Interests
of any business concern other than such an acquisition or purchase made by (or
pursuant to a merger or consolidation of) the Borrower or a Restricted
Subsidiary other than BFI or its Subsidiaries, (ii) effect any transfer of
material assets or properties, or of Equity Interests in any Restricted
Subsidiary, to, or make any material investment (other than intercompany loans
and advances permitted by Section 6.01A) in, BFI or its Restricted Subsidiaries
(other than any such transfer or investment made by BFI or its Restricted
Subsidiaries) or (iii) effect any merger or consolidation with BFI or its
Subsidiaries (other than any such merger or consolidation involving only BFI or
its then existing Subsidiaries); provided, however, that any transaction
referred to in clauses (i), (ii) or (iii) above may be effected if (x) such
transaction can reasonably be expected to result in material tax, operational or
corporate governance savings or efficiencies or benefits of the Allied Group or
avoid material tax, operational or corporate governance costs, inefficiencies or
detriments to the Allied Group that would result from effecting the relevant
acquisition, transfer, investment or merger in a manner otherwise permitted by
this paragraph and (y) Allied Waste and the Borrower, in the exercise of their
commercially reasonable efforts, are not able to achieve comparable tax savings,
efficiencies or benefits or substantially avoid such material tax, operational
or corporate governance costs, inefficiencies or detriments, by restructuring
the relevant transaction or otherwise, in a manner permitted by this paragraph
without regard to this proviso.
SECTION 6.06A. Mergers, Consolidations, Sales of Assets and
Acquisitions. Neither Allied Waste nor the Borrower will, nor will it cause or
permit any of its Restricted Subsidiaries to, merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or conduct any Asset Sale of (in one transaction or in a series of transactions)
all or any substantial part of its assets (whether now owned or hereafter
acquired), or purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
Person, except that:
(a) if at the time thereof and immediately after giving effect
thereto no Senior Event of Default or Senior Default shall have
occurred and be continuing (i) any wholly owned Restricted Subsidiary
of Allied Waste (other than an Insurance Subsidiary, BFI or any
subsidiary of BFI) may merge into the Borrower in a transaction in
which the Borrower is the surviving corporation and (ii) any Restricted
Subsidiary of Allied Waste (other than an Insurance Subsidiary) may
merge into or consolidate with any other Restricted Subsidiary of
Allied Waste (other than an Insurance Subsidiary) in a transaction in
which the surviving entity is a wholly owned Restricted Subsidiary of
Allied Waste and no Person other than the Borrower or a wholly owned
Subsidiary of Allied Waste receives any consideration (provided that
BFI and its Restricted Subsidiaries shall not merge into or consolidate
with the Borrower or any Subsidiary other than BFI and its Restricted
Subsidiaries). In connection with one or more Permitted Acquisitions,
subject to Section 6.05A in the case of BFI, and its Subsidiaries, the
Borrower or any of its Restricted Subsidiaries (including BFI and any
Restricted Subsidiary of BFI) may merge with or into another Person,
BFI or any Restricted Subsidiary of BFI may also engage in any
transaction referred to in clauses (i) and (ii) above if (x) such
transaction can reasonably be expected to result in material tax,
operational or corporate governance savings, efficiencies or benefits
of the Allied Group or avoid material tax, operational or corporate
governance costs, inefficiencies or detriments to the Allied Group that
would result from effecting the merger of the Borrower, such Restricted
Subsidiary of the Borrower, BFI or such Restricted Subsidiary of BFI,
as the case may be, into the Borrower or such other Restricted
Subsidiary, as the case may be, and (y) Allied Waste and the Borrower,
in the exercise of their commercially reasonable efforts, are not able
to achieve comparable tax, operational or corporate governance savings,
efficiencies or benefits or substantially avoid such material tax
costs, inefficiencies or detriments by restructuring the relevant
transaction or otherwise, in a manner permitted by this paragraph (a)
without regard to this proviso;
(b) any Restricted Subsidiary of Allied Waste (other than the
Borrower) may change the jurisdiction in which it is incorporated so
long as the new jurisdiction of any Domestic Subsidiary is in the
United States;
<PAGE>
(c) the Borrower or any of the Loan Parties (other than (i)
Insurance Subsidiaries and (ii) BFI and its Subsidiaries, unless
permitted pursuant to the last paragraph of Section 6.05A) may make
Permitted Acquisitions and Investments permitted by Section 6.05(A)(a),
(h), (i) and (p);
(d) the Borrower or any of its Restricted Subsidiaries may
conduct the Asset Sales set forth on Schedule 5.20A hereto and other
Asset Sales of a type not described in Section 5.20A, provided that the
Net Available Proceeds of each such Asset Sale shall be applied in the
manner set forth in Section 2.11; provided further that any sale,
transfer or other disposition of assets or stock with a fair market
value in excess of 2% of Consolidated Total Assets and not otherwise
prohibited by this Section 6.06A shall not be permitted unless (A) such
sale, transfer or other disposition is for consideration at least 75%
of which is cash and (B) such consideration is at least equal to the
fair market value of the assets, transferred or disposed of (as
determined in good faith by the Board of Directors or officers of the
Borrower);
(e) the Borrower and its Restricted Subsidiaries may effect
asset swaps permitted by Section 6.05A(m); and
(f) Allied Waste may make Asset Sales to any of the Loan
Parties and any Loan Party may make Assets Sales to Allied Waste or to
another Loan Party.
SECTION 6.07A. Hedging Agreements. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, enter into any Hedging
Agreement, other than (a) Hedging Agreements required by Section 5.19A (b)
Hedging Agreements with respect to AWNA Senior Notes and BFI Indenture Debt, (c)
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which Allied Waste or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities and (d) Hedging Agreements
existing on the Effective Date.
<PAGE>
SECTION 6.08A. Restricted Payments; Certain Payments of
Indebtedness. (a) Allied Waste will not, nor will it permit any of its
Restricted Subsidiaries to, declare or make, or agree to pay or make, directly
or indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except (i) Allied Waste may declare and pay dividends with
respect to its capital stock payable solely in additional shares of its capital
stock, (ii) Restricted Subsidiaries of the Borrower may declare and pay
dividends ratably with respect to their capital stock, (iii) Allied Waste may
make Restricted Payments, not exceeding an aggregate amount of $25,000,000
during any fiscal year, pursuant to and in accordance with the stock option
plans or other benefit plans or in connection with incentive or compensation
arrangements for current or former management or employees of the Borrower and
its Restricted Subsidiaries, (iv) the Borrower or any Restricted Subsidiary may
declare and make dividend payments to Allied Waste solely to the extent
necessary for Allied Waste to pay for taxes and to pay administrative expenses
to conduct its business in accordance with Sections 5.01A(b) and 6.10A, (v)
Allied Waste may declare and pay dividends in respect of the Sponsor Preferred
Stock payable solely in additional shares of Sponsor Preferred Stock (or other
capital stock, as provided therein); (vi) the Borrower or any Restricted
Subsidiary may pay cash dividends to Allied Waste in an amount sufficient to
permit Allied Waste to pay cash dividends on the Sponsor Preferred Stock
(including shares theretofore paid as dividends thereon in accordance with
clause (v) hereof) and Allied Waste may pay cash dividends on such Sponsor
Preferred Stock; provided, however, that all cash dividend payments in
accordance with this clause (vi) are subject to the satisfaction of the
following additional conditions on the date of such dividend payment and after
giving effect thereto:
(w) no Default or Event of Default has occurred and is
continuing upon declaration of such cash dividend, after giving effect
thereto;
(x) no principal amount of either the Asset Sale Term Loans or
the Tranche D Loans remains outstanding;
(y) the Leverage Ratio as of the last day of the previous
fiscal quarter is less than or equal to 4.00 to 1.00; and
(z) the Interest Coverage Ratio for the Rolling Period most
recently ended prior to the date of such dividend payment, taking into
account that such dividend is payable in cash, is not less than that
required by Section 6.13A;
(vii) Allied Waste and its Restricted Subsidiaries may make
Restricted Payments to the extent required by the terms of its joint venture or
similar agreements in effect on the date hereof and listed on Schedule 6.08A;
provided that immediately prior, and after giving effect to, such Restricted
Payment, no Senior Event of Default shall have occurred and be continuing;
(viii) Allied Waste may make Restricted Payments in respect of
its capital stock; provided that no such Restricted Payments shall be permitted
by this clause (viii) unless:
(v) no Default or Event of Default has occurred and is
continuing upon declaration of such Restricted Payment, after giving
effect thereto;
(w) no principal amount of either the Asset Sale Term Loan or
the Tranche D Loans remain outstanding;
(x) the Leverage Ratio as of the last day of the previous
fiscal quarter is less than or equal to 4.00 to 1.00;
(y) the Interest Coverage Ratio for the Rolling Period most
recently ended prior to the date of such dividend payment, taking into
account that such dividend is payable in cash, is not less than that
required by Section 6.13A; and
(z) the aggregate amount of Restricted Payments made pursuant
to this clause (viii) in any fiscal year does not exceed 50% of
Consolidated Net Income of Allied Waste for the immediately preceding
fiscal year; and (ix) Allied Waste may redeem Permitted Cure
Securities, if any, in accordance with the terms thereof with the
proceeds of an issuance of common stock or preferred stock that is not
a Prepayment Event, provided that such stock so issued is (x) Non-Cash
Pay and (y) subordinate to the Loans at least to the same extent that
such Permitted Cure Securities are subordinate to the Loans.
(b) Allied Waste will not, nor will it permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any such Subsidiary to (1) pay any dividends or make any other
distributions on its capital stock or any other ownership interest or (2) make
or repay any loans or advances to the Borrower or the parent of such Subsidiary,
except for:
<PAGE>
(x) existing restrictions under the Indebtedness set forth in
Schedule 6.01;
(y) existing restrictions under the AWNA Senior Note Indenture
and restrictions in the Subordinated Debt Documents, or agreements
governing Permitted Subordinated Debt, but only to the extent that any
of the foregoing limit the payment of dividends by the Borrower or its
Subsidiaries to Allied Waste; and
(z) restrictions pursuant to any agreement entered into by any
member of the Allied Group in connection with an Asset Sale for the
period beginning with the date such agreement is entered into through
the date that such Asset Sale is consummated; provided that (A) such
restrictions only restrict dividends to be paid by any Subsidiary of
Allied Waste in respect of the capital stock or assets that are being
sold pursuant to such Asset Sale and (B) such Asset Sale is permitted
hereunder.
SECTION 6.09A. Transactions with Affiliates. (a) Allied Waste
will not, nor will it cause or permit any of its Restricted Subsidiaries to,
sell or transfer any property or assets to, or purchase or acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates (other than as provided in (b) below), except:
(i) subject to the provisions of Section 6.08A, between or
among Allied Waste, the Borrower or any Subsidiary Loan Parties; or
(ii) that any member of the Allied Group may engage in any of
the foregoing transactions, including the payment of financial
advisory, financing, underwriting or placement fees or other investment
banking fees, in the ordinary course of business at prices and on terms
and conditions not less favorable to the members of the Allied Group
than could be obtained on an arm's-length basis from unrelated third
parties.
(b) Allied Waste will not, nor will it cause or permit any of
its Subsidiaries to, make any payment of or on account of monitoring or
management fees payable to the Sponsors or their Affiliates unless on the date
of such payment no Senior Default or Senior Event of Default has occurred and is
continuing or would result therefrom.
(c) The foregoing paragraph (a) shall not prohibit, to the
extent otherwise permitted under this Agreement, (i) any issuance of securities
of Allied Waste, or other payments, awards or grants in cash, securities of
Allied Waste or other property pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board of
Directors of Allied Waste, (ii) loans or advances to employees of Allied Waste,
the Borrower or any Subsidiary in accordance with Section 6.05A(e) and (f),
(iii) the payment of fees and indemnitees to directors, officers and employees
of Allied Waste, the Borrower and the Subsidiaries in the ordinary course of
business, (iv) transactions pursuant to Hedging Agreements permitted by Section
6.07A, (v) any employment agreements entered into by the Borrower or any of the
Restricted Subsidiaries in the ordinary course of business, and (vi) any
purchase by the Sponsors of capital stock of Allied Waste or any purchase by
Allied Waste of capital stock or other equity securities of any Restricted
Subsidiaries or any contribution by Allied Waste to the equity capital of the
Borrower.
<PAGE>
SECTION 6.10A. Business of Allied Waste, Borrower and
Subsidiaries. Allied Waste will not, nor will it cause or permit any of its
Restricted Subsidiaries to:
(a) Engage at any time, (i) in the case of the Borrower and
each of the Restricted Subsidiaries (other than the Insurance
Subsidiaries) in any business or business activity other than the
business currently conducted by them and business activities reasonably
incidental thereto and (ii) in the case of Allied Waste, in any
business or business activity other than the direct ownership of all
the outstanding stock of the Borrower or of any Unrestricted
Subsidiaries and all activities reasonably incidental thereto.
(b) Enter into any general partnership arrangement or become a
general partner of a limited partnership arrangement other than through
a special purpose wholly owned Subsidiary; provided that any
Investments associated with such general partnership shall be permitted
hereunder.
In addition, none of the Loan Parties will permit the
Insurance Subsidiaries to engage to any substantial extent in any line or lines
of business or business activity other than the business currently conducted by
such Insurance Subsidiaries and business activities reasonably incidental
thereto.
SECTION 6.11A. Other Indebtedness and Agreements. The Borrower
will not, nor will it cause or permit any of the Restricted Subsidiaries to:
(a) Permit any waiver, supplement, modification, amendment,
termination or release of (i) any Material Agreement or (ii) any
indenture, instrument or agreement pursuant to which any Indebtedness
or Preferred Stock of any member of the Allied Group is outstanding in
an aggregate outstanding principal amount in excess of $50,000,000, or
modify its charter or by-laws, in each case to the extent that any such
waiver, supplement, modification, amendment, termination or release
would be adverse to the Senior Lenders in any material respect.
(b) Make any distribution, whether in cash, property,
securities or a combination thereof, other than scheduled payments and
mandatory prepayments of principal and interest as and when due (to the
extent not prohibited by applicable subordination provisions), in
respect of, or pay, or offer or commit to pay, or directly or
indirectly redeem, repurchase, retire or otherwise acquire for
consideration, or set apart any sum for the aforesaid purposes, (i) any
Junior Indebtedness, or (ii) any other Indebtedness for borrowed money
(except for the Senior Obligations and intercompany Indebtedness
permitted hereby) other than (x) in a cumulative amount not greater
than 25% of the cumulative amount of Excess Cash Flow for each year,
commencing with the fiscal year ended December 31, 2000, (y)
refinancings permitted by Section 6.01A(xiii) and (z) refinancings of
Tranche D Loans with the proceeds from the issuance of Senior
Subordinated Notes or other Permitted Subordinated Debt.
(c) Make any payment or prepayment of any Indebtedness that
would violate the terms of this Agreement or of such Indebtedness, any
agreement or document evidencing, related to or securing the payment or
performance of such Indebtedness or any subordination agreement or
provision applicable to such Indebtedness.
<PAGE>
SECTION 6.12A. Amendment of Material Documents. Without the
consent of the Required Senior Lenders, neither Allied Waste nor the Borrower
will, nor will they permit any Restricted Subsidiary to, amend, modify or waive
any of its rights under (a) any Subordinated Debt Document, the AWNA Senior Debt
Indenture or the BFI Indenture, (b) its certificate of incorporation, by-laws or
other organizational documents or (c) the Merger Documents in any such case, in
a manner which could, individually or in the aggregate, reasonably be expected
to (i) have a Material Adverse Effect on the Loan Parties' ability to perform
their obligations hereunder or under the Loan Documents, or (ii) materially
impair the Lenders' rights or benefits hereunder or under the Loan Documents.
SECTION 6.13A. Interest Coverage Ratio. Allied Waste and the
Borrower will not permit the Interest Coverage Ratio as of the last day of any
fiscal quarter ending during any period set forth below to be less than the
ratio set forth below opposite such period:
Period Minimum Ratio
December 31, 1999 to September 30, 2000 1.75 to 1.00
December 31, 2000 to September 30, 2001 2.25 to 1.00
December 31, 2001 to September 30, 2002 2.50 to 1.00
December 31, 2002 to September 30, 2003 2.75 to 1.00
December 31, 2003 and thereafter 3.00 to 1.00
SECTION 6.14A. Leverage Ratio. Allied Waste and the Borrower
will not permit the Leverage Ratio as of the last day of any fiscal quarter
ending during any period set forth below to be more than the ratio set forth
opposite such period:
Period Maximum Ratio
December 31, 1999 to September 30, 2000 6.25 to 1.00
December 31, 2000 to September 30, 2001 5.50 to 1.00
December 31, 2001 to September 30, 2002 4.50 to 1.00
December 31, 2002 to September 30, 2003 4.00 to 1.00
December 31, 2003 and thereafter 3.50 to 1.00
SECTION 6.15A. Capital Expenditure. (a) Allied Waste and the
Borrower will not, and will not permit any of the Subsidiaries to, make any
Capital Expenditures that would cause the aggregate amount of such Capital
Expenditures made by Allied Waste, the Borrower and the Subsidiaries in any
fiscal year set forth below to exceed (a) for the fiscal year ending December
31, 1999, $800,000,000; and (b) for any fiscal year ending after December 31,
1999, the sum of (i) Capital Expenditures permitted by this Section 6.15A for
the prior fiscal year plus (ii) 25% of the gross revenues of Acquired Businesses
acquired during the then-current fiscal year.
<PAGE>
(b) Notwithstanding the foregoing, the Borrower may in any
fiscal year, upon written notice to the Administrative Agent, increase the
amount of Capital Expenditures permitted to be made during such fiscal year
pursuant to this Section 6.15A by an amount equal to the lesser of (i) the total
unused amount of Capital Expenditures permitted to be made pursuant to this
Section 6.15A for the immediately preceding fiscal year (minus the amount of any
unused Capital Expenditures permitted to be made pursuant to this Section 6.15A
that were carried forward to such preceding fiscal year pursuant to this
paragraph (b)) and (ii) 50% of the amount of Capital Expenditures permitted to
be made pursuant to this Section 6.15A for the immediately preceding fiscal year
(minus the amount of any unused Capital Expenditures permitted to be made
pursuant to this Section 6.15A that were carried forward to such preceding
fiscal year pursuant to this paragraph (b)).
SECTION 6.16A. Designation of Unrestricted Subsidiaries. The
Borrower will not designate any Subsidiary (other than a newly created
Subsidiary in which no investment has previously been made) as an "Unrestricted
Subsidiary") under this agreement (a "Designation") unless:
(i) no Event of Default shall have occurred and be continuing at
the time of or after giving effect to such Designation;
(ii) the Borrower has delivered to the Agent (x) written notice of
such Designation and (y) a certificate, dated the effective
date of such Designation, of an Executive Officer stating that
no Event of Default has occurred and is continuing and setting
forth reasonably detailed calculations demonstrating pro forma
compliance with Section 6.13A and Section 6.14A in accordance
with paragraph (ii) above; and
(iii) such Subsidiary has not Guaranteed (after giving effect to
such Designation) any Indebtedness of Allied Waste or any
other Restricted Subsidiary.
Neither the Borrower nor any Restricted Subsidiary shall at any time (x) provide
a Guarantee of any Indebtedness of any Unrestricted Subsidiary, (y) be directly
or indirectly liable for any Indebtedness of any Unrestricted Subsidiary or (z)
be directly or indirectly liable for any other Indebtedness which provides that
the holder thereof may (upon notice, lapse of time or both) declare a default
thereon (or cause such Indebtedness or the payment thereof to be accelerated,
payable or subject to repurchase prior to its final scheduled maturity) upon the
occurrence of a default with respect to any other Indebtedness that is
Indebtedness of an Unrestricted Subsidiary, except in the case of clause (x) or
(y) to the extent permitted under Section 6.01A and Section 6.05A hereof. Each
Designation shall be irrevocable, and no Unrestricted Subsidiary may become a
Restricted Subsidiary, be merged with or into the Company or a Restricted
Subsidiary or liquidate into or transfer substantially all its assets to the
Company or a Restricted Subsidiary.
ARTICLE VI-B
Tranche D Negative Covenants
Until the Tranche D Commitments have expired or terminated and
the principal of and interest on each Tranche D Loan and all fees payable to the
Tranche D Lenders hereunder have been paid in full, each of Allied Waste, the
Borrower covenants and agrees with the Tranche D Lenders that:
SECTION 6.01B. Indebtedness; Certain Equity Securities. (a)
Allied Waste and the Borrower will not, and will not permit any Restricted
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:
(i) Indebtedness created under the Loan Documents;
<PAGE>
(ii) the Senior Subordinated Notes outstanding on the
Effective Date in an aggregate principal amount not to exceed
$2,500,000,000 and Permitted Subordinated Debt (including Senior
Subordinated Notes and Exchange Notes) issued after the Effective Date
to refinance (and in a principal amount not in excess of the principal
amount of) the Tranche D Loans outstanding as of the Effective Date;
(iii) Indebtedness (including Guarantees) existing on the date
hereof and set forth in Schedule 6.01A;
(iv) Hedging Agreements permitted pursuant to Section 6.07B;
(v) Acquired Indebtedness of a Restricted Subsidiary acquired
after the date hereof and Acquired Indebtedness of a corporation merged
or consolidated with or into the Borrower or a Restricted Subsidiary
after the date hereof, which Indebtedness in each case exists at the
time of such acquisition, merger, consolidation or conversion into a
Restricted Subsidiary and is not created in contemplation of such event
and where such acquisition, merger or consolidation is permitted by
this Agreement; provided that the Borrower and the Restricted
Subsidiaries comply with the provisions of Section 5.18B with respect
to any such acquired or newly formed Restricted Subsidiary;
(vi) unsecured Indebtedness of Allied Waste, the Borrower or
any Restricted Subsidiary that is issued to a seller of an Acquired
Business and incurred in connection with a Permitted Acquisition;
(vii) unsecured Guarantees in respect of (x) Indebtedness
permitted pursuant to subparagraphs (ii), (v), (vi), (xiii), and (xv)
of this Section 6.01B, and (y) Indebtedness of Ref-Fuel; provided that
such Guarantees pursuant to this clause (vii)(y) are required to be
provided pursuant to contractual obligations existing on the date
hereof; provided that any Guarantees in respect of Indebtedness that is
subordinated to any of the Tranche D Obligations or to Guarantees of
the Tranche D Obligations shall also be subordinated to the Guarantees
in favor of the Tranche D Lenders under the Loan Documents or to the
Tranche D Obligations, as the case may be, to the same extent as such
Indebtedness is subordinated to any of the Tranche D Obligations;
(viii) Indebtedness of the Borrower or any Subsidiary Loan
Party to any other Subsidiary or the Borrower, so long as such
Indebtedness is subordinated to all Senior Obligations and all Tranche
D Obligations;
(ix) subordinated Indebtedness (i) of Allied Waste to the
Borrower or any wholly owned Subsidiary, so long as the proceeds of
such Indebtedness are used by Allied Waste solely for purposes
permitted under Section 6.10B, or (ii) of the Borrower or any wholly
owned Restricted Subsidiary to Allied Waste;
(x) Indebtedness of the Borrower and Allied Waste under the
Allied Guarantee;
<PAGE>
(xi) Indebtedness (including tax exempt financings and Capital
Lease Obligations) of the Borrower or the Restricted Subsidiaries
incurred after the Effective Date to finance Capital Expenditures
permitted under Section 6.15B; provided that (A) such Indebtedness is
incurred prior to or within 120 days after the acquisition, completion
of construction, refurbishment or improvement of the fixed or capital
assets being financed and does not exceed 100% of the cost thereof and
(B) the aggregate principal amount of (1) any Indebtedness incurred
pursuant to this paragraph (xi) and (2) Capital Lease Obligations
pursuant to Section 6.04B outstanding at any time shall not exceed the
greater of (I) $700,000,000 and (II) an amount equal to 5% of
Consolidated Total Assets;
(xii) Indebtedness incurred pursuant to any sale and leaseback
transaction permitted by Section 6.04B;
(xiii) extensions, renewals or refinancings of Indebtedness
under paragraphs (iii) and (v) so long as (1) such Refinancing
Indebtedness is in an original aggregate principal amount not greater
than the aggregate principal amount of, and unpaid interest on, the
Indebtedness being extended, renewed or refinanced plus the amount of
any premiums required to be paid thereon and fees and expenses
associated therewith, (2) such Refinancing Indebtedness has a later or
equal final maturity and a longer or equal weighted average life than
the Indebtedness being extended, renewed or refinanced, (3) the
interest rate applicable to such Refinancing Indebtedness shall be a
market interest rate (as determined in good faith by the Board of
Directors of the Borrower) as of the time of such extension, renewal or
refinancing, (4) if the Indebtedness being extended, renewed or
refinanced is subordinated to the Tranche D Obligations, such
Refinancing Indebtedness is subordinated to the Tranche D Obligations,
(5) the covenants, events of default and any Guarantees thereof, taken
as a whole, shall be determined in good faith by the board of directors
of the Borrower to be no less favorable to the Tranche D Lenders than
those contained in the Indebtedness being refinanced and (6) at the
time and after giving effect to such renewal or refinancing, no Tranche
D Event of Default shall have occurred and be continuing;
(xiv) Indebtedness consisting of reimbursement obligations
under surety, indemnity, performance, release and appeal bonds and
guarantees thereof, in each case securing obligations not constituting
Indebtedness for borrowed money and obtained in the ordinary course of
business;
(xv) Indebtedness of Foreign Subsidiaries, Insurance
Subsidiaries, and other Restricted Subsidiaries that are not Subsidiary
Loan Parties incurred after the Effective Date in an aggregate
principal amount outstanding at any time not exceeding the greater of
(1) $280,000,000 and (2) 2% of Consolidated Total Assets;
(xvi) unsecured Indebtedness of the Borrower or Allied Waste
in addition to that permitted by paragraphs (i) through (xv) above;
provided that such Indebtedness has a longer or equal weighted average
life than the Tranche D Loans hereunder, such Indebtedness is permitted
pursuant to Section 6.14A and 100% of the Net Available Proceeds of
such Indebtedness are utilized to prepay Term Loans in accordance with
Section 2.11(c);
(xvii) contingent liabilities arising out of endorsements of
checks and other negotiable instruments for deposit or collection in
the ordinary course of business; and
<PAGE>
(xviii) other Indebtedness of Allied Waste, the Borrower and
the Restricted Subsidiaries in an aggregate principal amount
outstanding at any time not exceeding the greater of (1) $420,000,000
and (2) 3% of Consolidated Total Assets; and
(xix) all premiums (if any), interest (including post-petition
interest and other than capitalized interest), fees, expenses,
indemnities, charges and additional or contingent interest on
obligations described in clauses (i) through (xviii) above.
(b) Neither Allied Waste nor the Borrower will, nor
will they permit any Restricted Subsidiary to, issue any Preferred
Stock or other preferred Equity Interests, other than the Sponsor
Preferred Stock and other Non-Cash Pay Preferred Stock of Allied Waste
or the Borrower unless the Net Available Proceeds thereof are applied
in the manner and to the extent required under Section 2.11(c).
SECTION 6.02B. Liens. Neither Allied Waste nor the Borrower
will, nor will it cause or permit any of the Restricted Subsidiaries to, create,
incur, assume or permit to exist any Lien on any property or assets (including
stock or other securities of any Person, including any Subsidiary of Allied
Waste) now owned or hereafter acquired by it or on any income or revenues or
rights in respect of any thereof, except:
(a) Liens on properties or assets of members of the Allied
Group existing on the date hereof and set forth in Schedule 6.02
(excluding, however, following the making of the initial extensions of
credit hereunder, the Indebtedness to be repaid with the proceeds of
such Loans, as indicated on Schedule 6.02); provided that such Liens
shall secure only those obligations (and extensions, renewals and
refinancings thereof permitted hereby) which they secure on the date
hereof;
(b) Liens created under the Loan Documents;
(c) Permitted Encumbrances;
(d) purchase money security interests in real property,
improvements thereto, equipment or other fixed assets hereafter
acquired (or, in the case of improvements, equipment or other fixed
assets, constructed or refurbished) by the Borrower or any Subsidiary
(including such security interests arising out of Capital Lease
Obligations); provided, that (i) such security interests secure
Indebtedness permitted by Section 6.01B(xi), (ii) such security
interests are incurred, and the Indebtedness secured thereby is
created, within 120 days after such acquisition (or completion of such
construction), (iii) the Indebtedness secured thereby does not exceed
100% of the cost of such real property, improvements or equipment at
the time of such acquisition (or construction) and (iv) such security
interests do not apply to any other property or assets of the Borrower
or any Restricted Subsidiary (other than the proceeds of the real
property, improvements, equipment or other fixed assets subject to the
Lien);
(e) Liens securing Refinancing Indebtedness, to the extent
that the Indebtedness being refinanced was originally secured in
accordance with this Section 6.02B, provided, that such Lien does not
apply to any additional property or assets of Allied Waste, the
Borrower or any Subsidiary (other than additions to and the proceeds of
the property or asset subject to the Lien);
<PAGE>
(f) any Lien on the property or assets of an Acquired Business
(other than on the stock or Equity Interests of a Subsidiary) securing
Indebtedness permitted by Section 6.01B(v); provided that such Lien
existed at the time of and was not created in contemplation of the
acquisition of such Acquired Business;
(g) Liens arising from Uniform Commercial Code financing
statements and similar documents filed on a precautionary basis in
respect of operating leases intended by the parties to be true leases
(other than any such leases entered into in violation of this
Agreement);
(h) any Lien on the property or assets of any Foreign
Subsidiary, Insurance Subsidiary or other Restricted Subsidiary that is
not a Loan Party Subsidiary securing Indebtedness permitted by Section
6.01B(xv);
(i) additional Liens on property (but not on the capital stock
or other ownership interests of any Subsidiary owned by the Borrower,
Allied Waste or any Subsidiary Loan Party) to secure Indebtedness
(including, without limitation, Capital Lease Obligations in addition
to those permitted by paragraph (d) of this Section 6.02B) so long as
neither the outstanding aggregate principal amount of such Indebtedness
nor the aggregate book value of assets subject to such Liens at any
time exceeds the greater of (1) $420,000,000 and (2) 3% of Consolidated
Total Assets; and
(j) any Lien arising pursuant to Environmental Law for costs
or damages which are not yet due (by virtue of a written demand for
payment by a Governmental Authority) or which are being contested in
compliance with the standard set forth in Section 5.08B(a), or on
property that the Borrower or a Subsidiary has determined to abandon if
the sole recourse for such costs or damages is to such property;
provided that the liability of the Borrower and the Subsidiaries with
respect to the matters giving rise to all such Liens shall not, in the
reasonable estimate of the Borrower (in light of all attendant
circumstances, including the likelihood of contribution by third
parties), exceed the greater of (i) $280,000,000 or (ii) 2% of
Consolidated Total Assets.
SECTION 6.03B. No Other Negative Pledge. Allied Waste will
not, nor will it cause or permit any of its Restricted Subsidiaries to, enter
into any agreement prohibiting or conditioning (including pursuant to any pari
passu security requirement) the creation or assumption of any Lien upon any of
its property or assets other than:
(i) in favor of the Senior Lenders, the Issuing Banks or the
Secured Parties;
(ii) in favor of the holders of Tranche D Term Loans, Exchange
Notes or Permitted Subordinated Debt; provided that such agreement does
not so restrict Liens securing the Senior Obligations;
(iii) in connection with Indebtedness that may be secured by a
Lien or in connection with obligations secured by Permitted
Encumbrances in compliance with Section 6.02B(a), (d), (e), (f), (g),
(h) or (i); provided that such prohibition or condition does not apply
to any property or assets now or hereafter in existence not subject to
such Lien;
<PAGE>
(iv) in connection with any lease permitted under Section
6.04B solely to the extent that such lease prohibits a Lien on the
lease or the property subject to such lease; or
(v) pursuant to any agreement entered into by any member of
the Allied Group in connection with an Asset Sale for the period
beginning with the date such agreement is entered into through the date
such Asset Sale is consummated; provided that (x) such negative pledge
shall only relate to the property being sold pursuant to such Asset
Sale and (y) such Asset Sale is permitted hereunder.
SECTION 6.04B. Sale and Lease-Back Transactions. Allied Waste
will not, nor will it cause or permit any of its Restricted Subsidiaries to,
enter into any arrangement, directly or indirectly, with any Person whereby it
shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property which it intends to use for substantially the
same purpose or purposes as the property being sold or transferred; provided
that (i) the Borrower or any Restricted Subsidiary may enter into any such
transaction with respect to any lease that is required to be capitalized in
accordance with GAAP and is in compliance with Section 6.02B(d) or (i) and (ii)
the aggregate principal amount of (1) Capital Lease Obligations associated
therewith and (2) any Indebtedness incurred pursuant to Section 6.01B(xi) at any
time outstanding does not exceed the greater of (A) $700,000,000 and (B) 5% of
Consolidated Total Assets.
SECTION 6.05B. Investments, Loans, Guarantees and
Acquisitions. Allied Waste will not, and will not permit any of its Restricted
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Restricted Subsidiary prior to such
merger) any Investment in any other Person, or purchase or otherwise acquire (in
one transaction or a series of transactions) any assets of any other Person
constituting a business unit, except:
(a) Investments by Allied Waste and the Borrower (i) existing
on the date hereof and (ii) made after the date hereof in the capital
stock or other ownership interests of the Borrower and entities that,
prior to and after such investments, are Loan Parties; loans or
advances by the Borrower or any Loan Party to the Borrower or any Loan
Party; and loans or advances by the Borrower or any Loan Party to
Allied Waste or by Allied Waste to the Borrower or any Loan Party;
provided that in any event no Loan Party shall make any Investments in,
or loans or advances to any Insurance Subsidiary, any Foreign
Subsidiary, any Restricted Subsidiary that is not a Loan party or any
Unrestricted Subsidiary after the date hereof (other than in accordance
with clause (i) below);
(b) the Merger;
(c) Permitted Investments;
(d) Investments by the members of the Allied Group existing on
the date hereof and set forth in Schedule 6.05;
(e) loans and advances to employees of members of the Allied
Group (including for travel, entertainment and relocation expenses) in
the ordinary course of their business;
<PAGE>
(f) loans by members of the Allied Group to their employees in
connection with management incentive plans not to exceed $25,000,000 at
any time outstanding; provided that such limitation shall not apply to
loans the proceeds of which are used to purchase common stock of Allied
Waste;
(g) guarantees not constituting Indebtedness by Allied Waste
or any Restricted Subsidiary of any contractual obligation (not
Indebtedness) of the Borrower or any Loan Party;
(h) Investments in the capital stock or other ownership
interests of any Specified Subsidiary newly organized after the date
hereof, provided that Allied Waste, the Borrower and such Subsidiary
comply with the applicable provisions of Section 5.18B with respect to
such newly formed Subsidiary;
(i) other Investments made after the Effective Date in an
aggregate amount at any time outstanding not to exceed the greater of
(x) $420,000,000 and (y) 3% of Consolidated Total Assets;
(j) extensions of trade credit in the ordinary course of
business in an aggregate amount not at any time exceeding $25,000,000;
(k) receivables owing to members of the Allied Group that
arise in the ordinary course of business and are payable or
dischargeable in accordance with customary trade terms;
(l) Permitted Acquisitions and other transactions permitted by
6.06B;
(m) investments in or acquisitions of landfills, collection
centers or other producing assets located in the United States pursuant
to contemporaneous exchanges of similar assets with any other Person;
provided that any portion of assets acquired for consideration other
than any such exchange shall be deemed a Capital Expenditure and be
subjected to the limitations of Section 6.15B;
(n) any Investment consisting of a Hedging Agreement permitted
by Section 6.07B;
(o) any Investment acquired by any of the Loan Parties (A) in
exchange for any other Investment or accounts receivable held by such
Loan Party as a result of a bankruptcy, workout, reorganization or
recapitalization of the issuer of such other Investment or accounts
receivable; (B) as a result of a foreclosure by such Loan Party or
other transfer of title with respect to any secured Investment in
default or (C) in connection with the acquisition of an Acquired
Business permitted hereunder which was an Investment of such Acquired
Business existing prior to the date of such acquisition and not made in
contemplation thereof; and
(p) Investments in Ref-Fuel and Guarantees of Indebtedness of
Ref-Fuel required to be provided pursuant to contractual obligations
existing on the date hereof by any Loan Party.
<PAGE>
SECTION 6.06B. Mergers, Consolidations, Sales of Assets and
Acquisitions. Neither Allied Waste nor the Borrower will, nor will it cause or
permit any of its Restricted Subsidiaries to, merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or conduct any Asset Sale of (in one transaction or in a series of transactions)
all or any substantial part of its assets (whether now owned or hereafter
acquired), or purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
Person, except that:
(a) if at the time thereof and immediately after giving effect
thereto no Tranche D Event of Default or Tranche D Default shall have
occurred and be continuing (i) any wholly owned subsidiary (other than
an Insurance Subsidiary) of Allied Waste may merge into the Borrower in
a transaction in which the Borrower is the surviving corporation; and
(ii) any Restricted Subsidiary of Allied Waste may merge into or
consolidate with any other Restricted Subsidiary of Allied Waste in a
transaction in which the surviving entity is a wholly owned Subsidiary
of Allied Waste and no Person other than the Borrower or a wholly owned
Subsidiary of Allied Waste receives any consideration. In connection
with one or more Permitted Acquisitions, the Borrower or any of its
Restricted Subsidiaries may merge with or into another Person;
(b) any Restricted Subsidiary of Allied Waste (other than the
Borrower) may change the jurisdiction of any Domestic Subsidiary in
which it is incorporated so long as the new jurisdiction is in the
United States;
(c) the Borrower or any of the Loan Parties (other than
Insurance Subsidiaries) may make Permitted Acquisitions and Investments
permitted by Section 6.05B(a), (h), (i) and (p);
(d) the Borrower or any of its Restricted Subsidiaries may
conduct the Asset Sales set forth on Schedule 5.20 hereto and other
Asset Sales of a type not described in Section 5.17B, provided that the
Net Available Proceeds of each such Asset Sale shall be applied in the
manner set forth in Section 2.11;
(e) the Borrower and its Restricted Subsidiaries may effect
asset swaps permitted by Section 6.05B(m); and
(f) Allied Waste may make Asset Sales to any of the Loan
Parties and any Loan Party may make Assets Sales to Allied Waste or to
another Loan Party.
SECTION 6.07B. Hedging Agreements. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, enter into any Hedging
Agreement, other than (a) Hedging Agreements required by Section 5.16B (b)
Hedging Agreements with respect to AWNA Senior Notes and BFI Indenture Debt, (c)
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which Allied Waste or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities and (d) Hedging Agreements
existing on the Effective Date.
<PAGE>
SECTION 6.08B. Restricted Payments; Certain Payments of
Indebtedness. (a) Allied Waste will not, nor will it permit any of its
Restricted Subsidiaries to, declare or make, or agree to pay or make, directly
or indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except (i) Allied Waste may declare and pay dividends with
respect to its capital stock payable solely in additional shares of its capital
stock, (ii) Restricted Subsidiaries of the Borrower may declare and pay
dividends ratably with respect to their capital stock, (iii) Allied Waste may
make Restricted Payments, not exceeding an aggregate amount of $25,000,000
during any fiscal year, pursuant to and in accordance with the stock option
plans or other benefit plans or in connection with incentive or compensation
arrangements for current or former management or employees of the Borrower and
its Restricted Subsidiaries, (iv) the Borrower or any Restricted Subsidiary may
declare and make dividend payments to Allied Waste solely to the extent
necessary for Allied Waste to pay for taxes and to pay administrative expenses
to conduct its business in accordance with Sections 5.01B(b) and 6.10B, (v)
Allied Waste may declare and pay dividends in respect of the Sponsor Preferred
Stock payable solely in additional shares of Sponsor Preferred Stock (or other
capital stock, as provided therein) and (vi) Allied Waste and its Restricted
Subsidiaries may make Restricted Payments to the extent required by the terms of
its joint venture or similar agreements in effect on the date hereof and listed
on Schedule 6.08A; provided that immediately prior, and after giving effect to,
such Restricted Payment, no Senior Event of Default shall have occurred and be
continuing.
(b) Allied Waste will not nor will it permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any such Subsidiary to (1) pay any dividends or make any other
distributions on its capital stock or any other ownership interest or (2) make
or repay any loans or advances to the Borrower or the parent of such Subsidiary,
except for:
(x) existing restrictions under the Indebtedness set forth in
Schedule 6.01;
(y) existing restrictions under the AWNA Senior Note Indenture
and restrictions in the Senior Subordinated Note Documents, or
agreements governing Permitted Subordinated Debt, but only to the
extent that any of the foregoing limit the payment of dividends by the
Borrower or its Subsidiaries to Allied Waste; and
(z) restrictions pursuant to any agreement entered into by any
member of the Allied Group in connection with an Asset Sale for the
period beginning with the date such agreement is entered into through
the date that such Asset Sale is consummated; provided that (A) such
restrictions only restrict dividends to be paid by any Subsidiary of
Allied Waste in respect of the capital stock or assets that are being
sold pursuant to such Asset Sale and (B) such Asset Sale is permitted
hereunder.
SECTION 6.09B. Transactions with Affiliates. (a) Allied Waste
will not, nor will it cause or permit any of its Restricted Subsidiaries to,
sell or transfer any property or assets to, or purchase or acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates (other than as provided in (b) below), except:
(i) subject to the provisions of Section 6.08B, between or
among Allied Waste, the Borrower or any Subsidiary Loan Parties; or
<PAGE>
(ii) that any member of the Allied Group may engage in any of
the foregoing transactions, including the payment of financial
advisory, financing, underwriting or placement fees or other investment
banking fees, in the ordinary course of business at prices and on terms
and conditions not less favorable to the members of the Allied Group
than could be obtained on an arm's-length basis from unrelated third
parties.
(b) Allied Waste will not, nor will it cause or permit any of
its Subsidiaries to, make any payment of or on account of monitoring or
management fees payable to the Sponsors or their Affiliates unless on the date
of such payment no Tranche D Default or Tranche D Event of Default has occurred
and is continuing or would result therefrom.
(c) The foregoing paragraph (a) shall not prohibit, to the
extent otherwise permitted under this Agreement, (i) any issuance of securities
of Allied Waste, or other payments, awards or grants in cash, securities of
Allied Waste or other property pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board of
Directors of Allied Waste, (ii) loans or advances to employees of Allied Waste,
the Borrower or any Subsidiary in accordance with Section 6.05B(e) and (f),
(iii) the payment of fees and indemnitees to directors, officers and employees
of Allied Waste, the Borrower and the Subsidiaries in the ordinary course of
business, (iv) transactions pursuant to Hedging Agreements permitted by Section
6.07B, (v) any employment agreements entered into by the Borrower or any of the
Restricted Subsidiaries in the ordinary course of business, and (vi) any
purchase by the Sponsors of capital stock of Allied Waste or any purchase by
Allied Waste of capital stock of any Subsidiaries or any contribution by Allied
Waste to the equity capital of the Borrower.
SECTION 6.10B. Business of Allied Waste, Borrower and
Subsidiaries. Allied Waste will not, nor will it cause or permit any of its
Restricted Subsidiaries to:
(a) Engage at any time, (i) in the case of the Borrower and
each of the Restricted Subsidiaries (other than the Insurance
Subsidiaries) in any business or business activity other than the
business currently conducted by them and business activities reasonably
incidental thereto and (ii) in the case of Allied Waste, in any
business or business activity other than the direct ownership of all
the outstanding stock of the Borrower or any Unrestricted Subsidiaries
and all activities reasonably incidental thereto.
(b) Enter into any general partnership arrangement other than
through a special purpose wholly owned Subsidiary; provided that any
Investments associated with such general partnership shall be permitted
hereunder.
In addition, none of the Loan Parties will permit the
Insurance Subsidiaries to engage to any substantial extent in any line or lines
of business or business activity other than the business currently conducted by
such Insurance Subsidiaries and business activities reasonably incidental
thereto.
SECTION 6.11B. Other Indebtedness and Agreements. The
Borrower will not, nor will it cause or permit any of the Restricted
Subsidiaries to:
<PAGE>
(a) Make any distribution, whether in cash, property,
securities or a combination thereof, other than scheduled payments and
mandatory prepayments of principal and interest as and when due (to the
extent not prohibited by applicable subordination provisions), in
respect of, or pay, or offer or commit to pay, or directly or
indirectly redeem, repurchase, retire or otherwise acquire for
consideration, or set apart any sum for the aforesaid purposes, (i) any
Junior Indebtedness, or (ii) any other Indebtedness for borrowed money
(except for the Senior Obligations and intercompany Indebtedness
permitted hereby) other than (x) in a cumulative amount not greater
than 25% of the cumulative amount of Excess Cash Flow for each year,
commencing with the fiscal year ended December 31, 2000, (y)
refinancings permitted by Section 6.01B(xiii) and (z) refinancings of
Tranche D Loans and Exchange Notes with the proceeds from the issuance
of Senior Subordinated Notes or other Permitted Subordinated Debt.
(b) Make any payment or prepayment of any Indebtedness that
would violate the terms of this Agreement or of such Indebtedness, any
agreement or document evidencing, related to or securing the payment or
performance of such Indebtedness or any subordination agreement or
provision applicable to such Indebtedness.
SECTION 6.12B. Designation of Unrestricted Subsidiaries.
The Borrower will not make a Designation unless:
(i) no Event of Default shall have occurred and be continuing at
the time of or after giving effect to such Designation;
(ii) the Borrower has delivered to the Agent (x) written notice of
such Designation and (y) a certificate, dated the effective
date of such Designation, of an Executive Officer stating that
no Event of Default has occurred and is continuing and setting
forth reasonably detailed calculations demonstrating pro forma
compliance with Section 6.13A and Section 6.14A in accordance
with paragraph (ii) above; and
(iii) such Subsidiary has not Guaranteed (after giving effect to
such Designation) any Indebtedness of Allied Waste or any
other Restricted Subsidiary.
Neither the Borrower nor any Restricted Subsidiary shall at any time (x) provide
a Guarantee of any Indebtedness of any Unrestricted Subsidiary, (y) be directly
or indirectly liable for any Indebtedness of any Unrestricted Subsidiary or (z)
be directly or indirectly liable for any other Indebtedness which provides that
the holder thereof may (upon notice, lapse of time or both) declare a default
thereon (or cause such Indebtedness or the payment thereof to be accelerated,
payable or subject to repurchase prior to its final scheduled maturity) upon the
occurrence of a default with respect to any other Indebtedness that is
Indebtedness of an Unrestricted Subsidiary, except in the case of clause (x) or
(y) to the extent permitted under Section 6.01B and Section 6.05B hereof. Each
Designation shall be irrevocable, and no Unrestricted Subsidiary may become a
Restricted Subsidiary, be merged with or into the Company or a Restricted
Subsidiary or liquidate into or transfer substantially all its assets to the
Company or a Restricted Subsidiary.
<PAGE>
SECTION 6.13B. Asset Disposition. (a) The Borrower will not,
and will not permit any Restricted Subsidiary to, make any Asset Disposition
unless: (i) in the case of any sale, transfer or other disposition of assets or
stock with a fair market value in excess of 2% of Consolidated Total Assets, (A)
such sale, transfer or other disposition is for consideration at least 75% of
which is (u) cash or readily marketable cash equivalents, (v) the assumption of
indebtedness or other liabilities reflected on the Consolidated balance sheet of
the Borrower and its Restricted Subsidiaries in accordance with GAAP (excluding
Indebtedness or any other liabilities subordinate in right of payment to the
Term Loans) and release from all liability on such Indebtedness 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
Borrower or any of its Restricted Subsidiaries as such business is conducted
immediately prior to such Asset Disposition, (x) any securities, notes or other
obligations received by the Borrower or any such Restricted Subsidiary from such
transferee that are contemporaneously (subject to ordinary settlement periods)
converted by the Borrower or such Restricted Subsidiary into cash or Cash
Equivalents (to the extent of cash and Cash Equivalents received), (y) any
Designated Noncash Consideration received pursuant to this clause (y) that is at
the time outstanding, not to exceed 15% of Consolidated Total Assets at the time
of the receipt of such Designated Noncash Consideration (with the fair market
value of each item of Designated Noncash Consideration being measured at the
time received and without giving effect to subsequent changes in value), or (z)
any combination thereof; and (B) such consideration is at least equal to the
fair market value of the assets, transferred or disposed of (as determined in
good faith by the Board of Directors or officers of the Borrower); and (ii) 100%
of the Net Available Proceeds from such Asset Disposition (including from the
sale of any marketable Cash Equivalent received therein) are applied by the
Borrower or a Restricted Subsidiary (A) first, within one year from the later of
the date of such Asset Disposition or the receipt of such Net Available
Proceeds, to Indebtedness of the Borrower or its Restricted Subsidiaries then
outstanding under any Senior Indebtedness 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 as specified
in Clause (A), to repay the Tranche D Term Loans (to the extent such repayment
is not prohibited by the terms of any Senior Indebtedness then in effect).
(b) Notwithstanding the foregoing, the Borrower shall not be
required to comply with the provisions described in Clause (ii) of the preceding
paragraph if the Net Available Proceeds are invested or committed to be 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 Borrower or any of its Restricted Subsidiaries as such business
is conducted prior to such Asset Disposition (determined by the Borrower's board
of directors in good faith).
SECTION 6.14B. Limitation on Senior Subordinated Indebtedness.
Other than Acquired Indebtedness incurred in accordance with Section 6.01A(v),
the Borrower will not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Indebtedness of the Borrower and senior in any respect in right
of payment to the Tranche D Loans. Other than acquired Guarantees of Acquired
Indebtedness incurred in accordance with Section 6.01A(v), no Guarantor will
incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to the
Indebtedness of such Guarantor and senior in any respect in right of payment to
such Guarantor's obligations under the Subordinated Parent Guarantee Agreement
or Subordinated Subsidiary Guarantee Agreement, as the case may be.
<PAGE>
SECTION 6.15B. Capital Expenditure. (a) Allied Waste and the
Borrower will not, and will not permit any of the Restricted Subsidiaries to,
make any Capital Expenditures that would cause the aggregate amount of such
Capital Expenditures made by Allied Waste, the Borrower and the Restricted
Subsidiaries in any fiscal year set forth below to exceed (a) for the fiscal
year ending December 31, 1999, $800,000,000; and (b) for any fiscal year ending
after December 31, 1999, the sum of (i) Capital Expenditures permitted by this
Section 6.15B for the prior fiscal year plus (ii) 25% of the gross revenues of
Acquired Businesses acquired during the then-current fiscal year.
(b) Notwithstanding the foregoing, the Borrower may in any
fiscal year, upon written notice to the Administrative Agent, increase the
amount of Capital Expenditures permitted to be made during such fiscal year
pursuant to this Section 6.15B by an amount equal to the lesser of (i) the total
unused amount of Capital Expenditures permitted to be made pursuant to this
Section 6.15B for the immediately preceding fiscal year (minus the amount of any
unused Capital Expenditures permitted to be made pursuant to this Section 6.15B
that were carried forward to such preceding fiscal year pursuant to this
paragraph (b)) and (ii) 50% of the amount of Capital Expenditures permitted to
be made pursuant to this Section 6.15B for the immediately preceding fiscal year
(minus the amount of any unused Capital Expenditures permitted to be made
pursuant to this Section 6.15B that were carried forward to such preceding
fiscal year pursuant to this paragraph (b)).
ARTICLE VII
Events of Default; Right To Cure
SECTION 7.01. Events of Default. (a) If any of the following
events ("Senior Events of Default") shall occur:
(i) the Borrower shall fail to pay any principal of any Senior
Loan or any reimbursement obligation in respect of any LC Disbursement
when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
(ii) the Borrower shall fail to pay any interest on any Senior
Loan or any fee or any other amount (other than an amount referred to
in clause (i) of this paragraph (a) of this Section 7.01) payable under
this Agreement or any other Loan Document, when and as the same shall
become due and payable, and such failure shall continue unremedied for
a period of three Business Days;
(iii) any representation or warranty made or deemed made by or
on behalf of Allied Waste, the Borrower or any Restricted Subsidiary in
or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant
to or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been
incorrect in any material respect when made or deemed made;
(iv) Allied Waste or the Borrower shall fail to observe or
perform any covenant, condition or agreement contained in Section 5.01A
(with respect to the existence of Allied Waste or the Borrower), 5.05A,
5.10A or 5.21A or in Article VI-A;
<PAGE>
(v) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (i), (ii) or (iv) of this paragraph (a)
of this Section 7.01 and other than any covenant set forth in Article
V-B or Article VI-B or any provision of the Subordinated Parent
Guarantee Agreement or Subordinated Subsidiary Guarantee Agreement),
and such failure shall continue unremedied for a period of 30 days
after notice thereof from the Administrative Agent to the Borrower
(which notice will be given at the request of any Senior Lender);
(vi) Allied Waste, the Borrower or any Subsidiary shall fail
to make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness or the Tranche D Term
Loans, when and as the same shall become due and payable beyond the
applicable period of grace, if any, provided in the instrument or
agreement under which such Material Indebtedness was created;
(vii) any event or condition occurs that results in any
Material Indebtedness or the Tranche D Term Loans becoming due prior to
its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of
any Material Indebtedness or the Tranche D Term Loans or any trustee or
agent on its or their behalf to cause any Material Indebtedness or the
Tranche D Term Loans to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (vii) shall not apply to
Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets of the Borrower or any Restricted
Subsidiary;
(viii) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (A) liquidation,
reorganization or other relief in respect of Allied Waste, the Borrower
or any Material Loan Party or its debts, or of a substantial part of
its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (B) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Allied Waste, the Borrower or any
Material Loan Party or for a substantial part of its assets, and, in
any such case, such proceeding or petition shall continue undismissed
for 90 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(ix) Allied Waste, the Borrower or any Material Loan Party
shall (A) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, (B) consent to the institution of, or fail
to contest in a timely and appropriate manner, any proceeding or
petition described in clause (viii) of this Article, (C) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Allied Waste, the
Borrower or any Material Loan Party or for a substantial part of its
assets, (D) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (E) make a general
assignment for the benefit of creditors or (F) take any action for the
purpose of effecting any of the foregoing;
(x) Allied Waste, the Borrower or any Material Loan Party
shall become unable, admit in writing its inability or fail generally
to pay its debts as they become due;
<PAGE>
(xi) one or more judgments for the payment of money in an
aggregate amount in excess of $50,000,000 (except to the extent covered
by insurance as to which the insurer has acknowledged in writing its
obligation to cover) shall be rendered against Allied Waste, the
Borrower, any Material Loan Party or any combination thereof and the
same shall remain undischarged for a period of 60 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon
any assets of Allied Waste, the Borrower or any Material Loan Party to
enforce any such judgment;
(xii) an ERISA Event shall have occurred that, in the opinion
of the Required Senior Lenders, when taken together with all other
ERISA Events that have occurred and are then outstanding, could
reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding $50,000,000 for all
periods;
(xiii) (A) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not
to be, a valid and perfected Lien on any material portion of the
Collateral, with the priority required by the applicable Security
Document, except (I) as a result of the sale or other disposition of
the applicable Collateral in a transaction permitted under the Loan
Documents or (II) as a result of the Collateral Agent's failure to
maintain possession of any stock certificates, promissory notes or
other instruments delivered to it under the Non-Shared Collateral
Security Agreement or (B) the Obligations of the Borrower, or the
obligations of Allied Waste or any Subsidiaries pursuant to a Guarantee
Agreement shall cease to constitute senior indebtedness under the
subordination provisions of any document or instrument evidencing any
permitted subordinated Indebtedness or such subordination provisions
shall be invalidated or otherwise cease to be legal, valid and binding
obligations of the parties thereto, enforceable in accordance with
their terms;
(xiv) a Change in Control shall occur; or
(xv) an Environmental Claim shall have been asserted against
any member of the Allied Group or any of their respective Affiliates,
that, in the reasonable judgment of the Required Senior Lenders, is
reasonably likely to be determined adversely to any member of the
Allied Group, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect
(insofar as such but after deducting any portion thereof that is
reasonably expected to be paid by other creditworthy Persons jointly
and severally liable therefor);
<PAGE>
then, and in every such event (other than an event with respect to the Borrower
described in clause (viii) or (ix) of this paragraph (a) of this Section 7.01),
and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Senior Lenders
shall, by notice to the Borrower, take either or both of the following actions,
at the same or different times: (i) terminate the Senior Commitments, and
thereupon the Senior Commitments shall terminate immediately, and (ii) declare
the Senior Loans then outstanding to be due and payable in whole (or in part, in
which case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Senior Loans
so declared to be due and payable, together with accrued interest thereon and
all fees and other obligations of the Borrower accrued hereunder, shall become
due and payable immediately, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; and in case
of any event with respect to Allied Waste or the Borrower described in clause
(viii) or (ix) of this paragraph (a) of this Section 7.01, the Senior
Commitments shall automatically terminate and the principal of the Senior Loans
then outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
(b) If any of the following events ("Tranche D Events of
Default" shall occur:
(i) the Borrower shall fail to pay any interest on any Tranche
D Loan or any Tranche D Obligation (other than an amount referred to in
clause (ii) of this paragraph (b) of this Section 7.01) when and as the
same shall become due and payable, and such failure shall continue
unremedied for a period of 3 Business Days, whether or not prohibited
by Article X of this Agreement;
(ii) the Borrower shall fail to pay any principal of any
Tranche D Loan or when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment
thereof or otherwise, whether or not prohibited by Article X of this
Agreement;
(iii) any Tranche D Representation or Warranty or any other
representation or warranty made or deemed made to the Tranche D Lenders
by or on behalf of Allied Waste, the Borrower or any Restricted
Subsidiary in or in connection with any Loan Document or any amendment
or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant
to or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been
incorrect in any material respect when made or deemed made;
(iv) Allied Waste or the Borrower shall fail to observe or
perform any covenant, condition or agreement contained in Section 5.01B
(with respect to the existence of Allied Waste or the Borrower), 5.05B
or 5.18B or in Article VI-B;
(v) any Loan Party shall fail to observe or perform any
covenant, condition or agreement made for the benefit of the Tranche D
Lenders contained in any Tranche D Loan Document (other than those
specified in clause (i), (ii) or (iv) of this paragraph (b) of this
Section 7.01), and such failure shall continue unremedied for a period
of 30 days after notice thereof from the Administrative Agent to the
Borrower (which notice will be given at the request of any Tranche D
Lender);
(vi) Allied Waste, the Borrower or any Subsidiary shall fail
to make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable beyond the applicable period of grace, if
any, provided in the instrument or agreement under which such Material
Indebtedness was created;
<PAGE>
(vii) a default or defaults under any bonds, debentures, notes
or other evidences of, or obligations constituting, Indebtedness by the
Borrower, any Guarantors or any Restricted Subsidiary or under any
mortgages, indentures, instruments or agreements under which there may
be issued or existing or by which there may be secured or evidenced any
Indebtedness of the Borrower, any Guarantor or any Restricted
Subsidiary with a principal or similar amount then outstanding,
individually or in the aggregate, in excess of $50,000,000 (whether
such Indebtedness 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 Indebtedness when due and payable after the
expiration of any applicable grace period with respect to such
Indebtedness, or will have resulted in such Indebtedness becoming or
being declared due and payable prior to the date on which it would
otherwise have become due and payable;
(viii) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (A) liquidation,
reorganization or other relief in respect of Allied Waste, the Borrower
or any Material Loan Party or its debts, or of a substantial part of
its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (B) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Allied Waste, the Borrower or any
Material Loan Party or for a substantial part of its assets, and, in
any such case, such proceeding or petition shall continue undismissed
for 90 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(ix) Allied Waste, the Borrower or any Material Loan Party
shall (A) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, (B) consent to the institution of, or fail
to contest in a timely and appropriate manner, any proceeding or
petition described in clause (viii) of this Article, (C) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Allied Waste, the
Borrower or any Material Loan Party or for a substantial part of its
assets, (D) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (E) make a general
assignment for the benefit of creditors or (F) take any action for the
purpose of effecting any of the foregoing;
(x) Allied Waste, the Borrower, BFI or any Material Loan Party
shall become unable, admit in writing its inability or fail generally
to pay its debts as they become due;
(xi) one or more judgments for the payment of money in an
aggregate amount in excess of $50,000,000 (except to the extent covered
by insurance as to which the insurer has acknowledged in writing its
obligation to cover) shall be rendered against Allied Waste, the
Borrower, any Material Loan Party or any combination thereof and the
same shall remain undischarged for a period of 60 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon
any assets of Allied Waste, the Borrower or any Material Loan Party to
enforce any such judgment;
<PAGE>
(xii) an ERISA Event shall have occurred that, in the opinion
of the Required Tranche D Lenders, when taken together with all other
ERISA Events that have occurred and are then outstanding, could
reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding $50,000,000 for all
periods;
(xiii) a Change in Control shall occur; or
(xiv) an Environmental Claim shall have been asserted against
any member of the Allied Group or any of their respective Affiliates,
that, in the reasonable judgment of the Required Tranche D Lenders, is
reasonably likely to be determined adversely to any member of the
Allied Group, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect
(insofar as such but after deducting any portion thereof that is
reasonably expected to be paid by other creditworthy Persons jointly
and severally liable therefor);
then, and in every such event (other than an event with respect to the Borrower
described in clause (viii) or (ix) of this paragraph (b) of this Section 7.01),
and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Tranche D Lenders
shall, by notice to the Borrower, take either or both of the following actions,
at the same or different times: (i) terminate the Tranche D Commitments, and
thereupon the Tranche D Commitments shall terminate immediately, and (ii)
declare the Tranche D Loans then outstanding to be due and payable in whole (or
in part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Tranche D Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; and in case of any event with respect to Allied Waste or the
Borrower described in clause (viii) or (ix) of this paragraph (b) of this
Section 7.01, the Tranche D Commitments shall automatically terminate and the
principal of the Tranche D Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
SECTION 7.02. Borrower's Right to Cure. (a) Leverage Ratio.
Notwithstanding anything to the contrary contained in Section 7.01, in the event
that Allied Waste and the Borrower fail to comply with the requirements of
Section 6.14A in respect of or as determined with reference to any Rolling
Period, until the expiration of the 10th Business Day subsequent to the date the
certificate calculating the Leverage Ratio is required to be delivered pursuant
to Section 5.04A(c), Allied Waste shall have the right to issue Permitted Cure
Securities for cash or otherwise receive cash contributions to the capital of
Allied Waste, and, in each case, to apply such cash in accordance with Section
2.11(c) and, if applicable, Section 2.08(c) (collectively, the "Cure Right"),
and upon such application by Borrower of such cash (the "Cure Amount") pursuant
to the exercise by Allied Waste of such Cure Right the Leverage Ratio shall be
recalculated giving effect to the following pro forma adjustments;
<PAGE>
(i) Total Indebtedness shall be decreased in respect of the
last fiscal quarter of such Rolling Period, solely for the purpose of
measuring the Leverage Ratio and not for any other purpose under this
Agreement, by an amount equal to the Cure Amount; and
(ii) if, after giving effect to the foregoing recalculation,
Allied Waste and Borrower shall then be in compliance with the
requirements of Section 6.14A, Allied Waste and Borrower shall be
deemed to have satisfied the requirements of Section 6.14A as of the
relevant date of determination with the same effect as though there had
been no failure to comply therewith at such date, and the applicable
breach or default of Section 6.14A which had occurred shall be deemed
cured for all purposes of the Agreement.
(b) Limitation on Exercise of Cure Right. Notwithstanding
anything herein to the contrary, (a) in no event shall Allied Waste be entitled
to exercise the Cure Right in more than three consecutive fiscal quarters, (b)
in any eight fiscal quarter period, there must be a period of at least four
consecutive fiscal quarters during which Allied Waste has not exercised its Cure
Right and (c) each Cure Amount shall not exceed the amount required to cure the
applicable failure to comply with Section 6.14A.
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto. For
purposes of this Article VIII, all references to the Administrative Agent are
deemed to include the Collateral Agent and the Collateral Trustee.
The bank serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Allied Waste, the Borrower or any
Subsidiary or any Affiliate of any of the foregoing as if it were not the
Administrative Agent hereunder.
<PAGE>
The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by the
Loan Documents that the Administrative Agent is required to exercise in writing
by the Required Senior Lenders or the Required Tranche D Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly set
forth in the Loan Documents, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to Allied Waste, the Borrower or any of the Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders, Required Senior Lenders or the Required Tranche D Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.02) or in the absence of its own
gross negligence or wilful misconduct. The Administrative Agent shall not be
deemed to have knowledge of any Default unless and until written notice thereof
is given to the Administrative Agent by Allied Waste, the Borrower or a Senior
Lender or Tranche D Lender, as applicable, and the Administrative Agent shall
not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all of its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
<PAGE>
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to Allied Waste or the Borrower, to it at 15880 N.
Greenway--Hayden Loop, Suite 100, Scottsdale, Arizona, 85260, Office of
the Treasurer, Attention of Treasurer (Telecopy No. (602) 627-2703),
with a copy to Fried, Frank, Harris, Shriver & Jacobson, One New York
Plaza, New York, NY 10004, Attention of Peter Golden, Esq. (Telecopy
No. (212) 859-4000;
(b) if to the Administrative Agent, to The Chase Manhattan
Bank, Loan and Agency Services Group, One Chase Manhattan Plaza, 8th
Floor, New York, NY 10081, Attention of Shoshana Tyson (Telecopy No.
(212) 552-5777), with a copy to Chase Bank of Texas, National
Association, 2200 Ross Avenue (3rd Floor), Dallas, TX 75201, Attention
of Buddy Wuthrich (Telecopy No.
(214) 965-2044);
(c) if to the Issuing Bank, to it at The Chase Manhattan Bank,
Loan and Agency Services Group, One Chase Manhattan Plaza, 8th Floor,
New York, NY 10081, Attention of Shoshana Tyson (Telecopy No. (212)
552-5777), with a copy to Chase Bank of Texas, National Association,
2200 Ross Avenue (3rd Floor), Dallas, TX 75201, Attention of Buddy
Wuthrich (Telecopy No.
(214) 965-2044);
(d) if to the Swingline Lender, to it at The Chase Manhattan
Bank, Loan and Agency Services Group, One Chase Manhattan Plaza, 8th
Floor, New York, NY 10081, Attention of Shoshana Tyson (Telecopy No.
(212) 552-5777); and
(e) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
<PAGE>
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by
the Administrative Agent, the Issuing Bank or any Lender in exercising any right
or power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Bank and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of any Loan Document or consent to any departure by
any Loan Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.
<PAGE>
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Allied Waste, the Borrower and the Required Lenders or, in the
case of any other Loan Document, pursuant to an agreement or agreements in
writing entered into by the Administrative Agent and the Loan Party or Loan
Parties that are parties thereto, in each case with the consent of the Required
Lenders; except that (i) an agreement may increase the Senior Commitments or
amend, waive or modify any provision of (A) Section 3.22 and Section 3.23, (B)
any Section contained in Article V-A, (C) any Section contained in Article VI-A,
(D) Section 7.01(a), (E) Section 4.01(b) (insofar as it relates to Security
Documents other than Tranche D Loan Documents) and Section 4.01(f) and (F) any
Senior Event of Default or Senior Default with the written consent of the
Required Senior Lenders (and not the Required Tranche D Lenders), (ii) an
agreement may amend, waive or modify any provision of (A) any Section contained
in Article V-B, (B) any Section contained in Article VI-B, (C) Section 7.01(b),
and (D) Section 4.01(q) and (E) any Tranche D Event of Default or Tranche D
Default with the written consent of the Required Tranche D Lenders (and not the
Required Senior Lenders) and (iii) an agreement may amend, waive or modify any
provision of this Agreement or any other Loan Document (other than the
Subordinated Guarantee Agreements) with the written consent of the Required
Senior Lenders, unless such amendment, waiver or modification adversely affects
the Tranche D Lenders in their capacities as such, or, in the case of the
Tranche D Loan Documents, with the written consent of the Required Tranche D
Lenders, unless such an amendment, waiver or modification adversely affects the
Senior Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender, (ii) reduce
the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) extend the final maturity of any
Loan or L/C Disbursement, without the prior written consent of each Lender
directly affected thereby, (iv) extend the scheduled amortization (other than
final maturity) of any Loan or the scheduled date for payment of interest and
fees without the prior written consent of Lenders holding Loans representing at
least 80% of the aggregate principal amount of the then outstanding Loans
affected thereby, (v) accelerate any scheduled amortization (including final
maturity) of any Loan without the prior written consent of Lenders holding Loans
representing at least 80% of the aggregate principal amount of the then
outstanding Loans affected thereby, (vi) change Section 2.18(b) or (c) in a
manner that would alter the pro rata sharing of payments among Senior Lenders
required thereby, without the written consent of each Senior Lender, or would
alter the pro rata sharing of payments among Tranche D Lenders required thereby,
without the written consent of each Tranche D Lender, (vii) change any of the
provisions of this Section that affect the Senior Lenders or the definition of
"Required Senior Lenders" or any other provision of any Loan Document specifying
the number or percentage of Lenders or Senior Lenders (or Lenders or Senior
Lenders of any Class) required to waive, amend or modify any rights thereunder
or make any determination or grant any consent thereunder, without the written
consent of each Senior Lender (or each Senior Lender of such Class, as the case
may be) or change any of the provisions of this Section that affects the Tranche
D Lenders or the definition of "Required Tranche D Lenders" or any other
provision of any Loan Document specifying the number or percentage of Lenders or
Tranche D Lenders (or Lenders or Tranche D Lenders of any Class) required to
waive, amend or modify any rights thereunder or make any determination or grant
any consent thereunder, without the written consent of each Tranche D Lender (or
each Tranche D Lender of such Class, as the case may be), (viii) release Allied
Waste or any Material Loan Party from its Guarantee under the applicable
Guarantee Agreement (except as expressly provided in such Guarantee Agreement),
or limit its liability in respect of such Guarantee, without the written consent
of each Senior Lender or Tranche D Lender, as applicable, (ix) release all or
substantially all of the Collateral from the Liens of the Security Documents,
without the written consent of each Senior Lender, (x) change the rights of the
Tranche B Lenders or Tranche C Lenders to decline mandatory prepayments as
provided in Section 2.11, without the written consent of Tranche B Lenders or
Tranche C Lenders, as applicable, holding a majority of the outstanding Tranche
B Term Loans or Tranche C Term Loans, as applicable or (xi) impose any
additional restriction (other than as set forth in Section 9.14 on the date
hereof) on the rights of the Tranche D Lenders hereunder to exchange any Tranche
D Loans for Exchange Notes or change the rate of exchange thereof or amend the
terms of the Exchange Notes in any manner that requires (or would, if the
Exchange Notes were outstanding, require) the approval of all holders of
Exchange Notes; provided further that (A) no such agreement shall amend, modify
or otherwise affect the rights or duties of the Administrative Agent, the
Issuing Banks or the Swingline Lender without the prior written consent of the
Administrative Agent, the Issuing Banks or the Swingline Lender, as the case may
be, and (B) no such agreement shall effect any waiver, amendment or modification
that by its terms adversely affects the rights in respect of payments or
collateral of Lenders participating in any Class of Loans differently from those
of Lenders participating in other Classes of Loans, without the consent of a
majority in interest of the Lenders participating in the adversely affected
Class, or change the relative rights in respect of payments or collateral of the
Lenders participating in different Classes of Loans without the consent of a
majority in interest of Lenders participating in each affected Class; provided
further, that the Administrative Agent, on the one hand, and, in the case of
this Agreement, Allied Waste and the Borrower or, in the case of any other Loan
Document, the Loan Parties thereto, on the other hand, may, without the consent
of any Lender amend or modify this Agreement or any other Loan Document, as the
case may be, (A) to cure any typographical error, so long as such amendment or
modification does not adversely affect the rights of any Lender, any Issuing
Bank or the Administrative Agent, (B) to effect the assumption by a successor
Person of all obligations of the Borrower or any other Loan Party under this
Agreement and the other Loan Documents in connection with any transaction
complying with Section 6.06A(a), (C) to correct and amplify the description of
any property subject or intended to be subject to the Lien of the applicable
Security Document and (D) to add property to the Collateral as permitted or
required by the applicable Security Document; and provided further that any
increase in the Tranche D Margin in accordance with the terms of the fee letters
will not require any amendment to this Agreement and will be effective upon
notice by the Administrative Agent. Notwithstanding the foregoing, no amendment,
waiver or modification of this Agreement shall be effective if such amendment,
waiver or modification shall cause the covenants, the change of control
definition and the events of default applicable to the Tranche D Loans to be
more restrictive than the covenants, the change of control definition and the
events of default applicable to the Senior Loans.
Except as otherwise provided herein or in the Security
Documents, the Administrative Agent shall not consent to terminate any
Guarantee, release any collateral or terminate any Lien under any Security
Document unless such release or termination shall be consented in writing by the
Required Senior Lenders; provided that: (i) the consent of all Senior Lenders
shall be required to release all or substantially all of the Collateral or
release all or substantially all guarantors under the Guarantee Agreements from
the Guarantees, except upon the termination of all Liens and all Guarantees
created by the Security Documents in accordance with the terms thereof; and (ii)
no such consent shall be required to release any Lien covering property subject
to an Asset Sale permitted hereunder and, in the case of an Asset Sale involving
the sale of a Subsidiary Loan Party permitted hereunder, the Guarantee of such
Subsidiary Loan Party, and, upon such a permitted Asset Sale, such property
and/or such Subsidiary Loan Party shall be transferred free and clear of the
Lien of the Security Documents and/or Guarantee, if applicable, without any
action on the part of any party (and the Administrative Agent is hereby
authorized to execute such releases and other documents, and to take such other
action, as the Borrower may reasonably request to give effect thereto).
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates and the other Initial Lenders, including
but not limited to the reasonable expenses incurred in connection with due
diligence and the reasonable fees, charges and disbursements of counsel for the
Administrative Agent and of a single local counsel for the Administrative Agent
in each applicable jurisdiction, in connection with the syndication of the
credit facilities provided for herein, the preparation and administration (to
the extent such administration of an outside counsel or consultant) of the Loan
Documents or any amendments, modifications or waivers of the provisions thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or
any Lender, including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with the Loan Documents,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.
<PAGE>
(b) The Borrower shall indemnify the Administrative Agent, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of any
Loan Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any Property or Former Property (as defined in Section 3.16 hereof),
or any Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Issuing Bank, the
Collateral Agent (with respect to its activities for the benefit of the Senior
Lenders) or the Swingline Lender under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent, and each Senior
Lender agrees to pay to the Issuing Bank, the Collateral Agent or the Swingline
Lender, as the case may be, such Lender's or Senior Lender's, as applicable, pro
rata share (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity
as such. For purposes hereof, a Lender's "pro rata share" shall be determined
based upon its share of the sum of the total Revolving Exposures, outstanding
Term Loans and unused Commitments at the time and a Senior Lender's "pro rata
share" shall be determined based upon its share of the sum of the total
Revolving Exposures outstanding, Senior Term Loans and unused Senior Commitments
at the time.
(d) To the extent permitted by applicable law, neither Allied
Waste nor the Borrower shall assert, and each hereby waives, any claim against
any Indemnitee, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not
later than ten days after written demand therefor.
<PAGE>
SECTION 9.04. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (including
any Affiliate of the Issuing Bank that issues any Letter of Credit), except that
the Borrower may not, other than in connection with a merger or consolidation
permitted by Section 6.06A and Section 6.06B where the survivor of such merger
or consolidation assumes the Borrower's obligations hereunder, assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Issuing Bank and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.
<PAGE>
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender, an Affiliate of a Lender or
a Related Fund of a Lender, each of the Borrower and the Administrative Agent
(and, in the case of an assignment of all or a portion of a Revolving Commitment
or any Senior Lender's obligations in respect of its LC Exposure or Swingline
Exposure, the Issuing Bank and the Swingline Lender) must give their prior
written consent to such assignment (which consent shall not be unreasonably
withheld), (ii) except in the case of an assignment to a Lender, an Affiliate of
a Lender, or a Related Fund of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Commitment or Loans, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance or Tranche D Assignment
and Acceptance, as the case may be, with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000 (treating any
fund that invests in bank loans and any other fund that invests in bank loans
and is managed or advised by the same investment advisor of such fund or by an
affiliate of such investment advisor as a single assignment for purposes of the
minimum amount) unless each of the Borrower and the Administrative Agent
otherwise consent (which consent shall not be unreasonably withheld), (iii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under this Agreement, except that
this clause (iii) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender's rights and obligations in
respect of one Class of Commitments or Loans, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance or Tranche D Assignment and Acceptance, as applicable, together
(except in the event of an assignment by the Initial Lenders) with a processing
and recordation fee of $3,500, and (v) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and provided further that any consent of the Borrower otherwise
required under this paragraph shall not be required if a Senior Event of Default
under clause (viii) or (ix) of Section 7.01(a) has occurred and is continuing or
if a Tranche D Event of Default under clause (viii) or (ix) of Section 7.01(b)
has occurred and is continuing. Subject to acceptance and recording thereof
pursuant to paragraph (d) of this Section, from and after the effective date
specified in each Assignment and Acceptance or Tranche D Assignment and
Acceptance, as applicable, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance or
Tranche D Assignment and Acceptance, as applicable, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance or Tranche D Assignment and Acceptance, as applicable, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance or Tranche D Assignment and Acceptance, as applicable, covering all
of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance and Tranche D Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
conclusive, and Allied Waste, the Borrower, the Administrative Agent, the
Issuing Bank and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Senior Lender or Tranche D Lender, as
applicable, hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be provided to each Initial Lender and be
available for inspection by the Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance or Tranche D Assignment and Acceptance, as applicable, executed by an
assigning Lender and an assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance or
Tranche D Assignment and Acceptance, as applicable, and record the information
contained therein in the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.
<PAGE>
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) Allied Waste, the
Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce the Loan Documents and
to approve any amendment, modification or waiver of any provision of the Loan
Documents; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.15,
2.16 and 2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
or Foreign Tranche D Lender if it were a Lender shall not be entitled to the
benefits of Section 2.17 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.17(e) and 2.17(f) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(h) In the event that Standard & Poor's Ratings Group or
Moody's Investors Service, Inc. shall downgrade the long-term certificate of
deposit ratings or long-term senior unsecured debt ratings of any Senior Lender
(or the parent company thereof), and the resulting ratings shall be BBB+ or Baa1
or lower, then the Fronting Bank shall have the right, but not the obligation,
at its own expense, upon notice to such Senior Lender and the Administrative
Agent, to replace (or to request Allied Waste and Borrower, at the sole expense
of the Fronting Bank, to use their reasonable efforts to replace) such Senior
Lender with respect to such Senior Lender's Revolving Credit Commitment with an
assignee (in accordance with and subject to the restrictions contained in
paragraph (b) above), and such Senior Lender hereby agrees to transfer and
assign without recourse (in accordance with and subject to the restrictions
contained in paragraph (b) above) all its interests, rights and obligations in
respect of its Revolving Credit Commitment to such assignee; provided, however,
that (i) no such assignment shall conflict with any law, rule and regulation or
order of any Governmental Authority and (ii) such assignee shall pay to such
Senior Lender in immediately available funds on the date of such assignment the
principal of and interest accrued to the date of payment on the Loans and L/C
Disbursements of such Senior Lender hereunder and all other amounts accrued for
such Senior Lender's account or owed to it hereunder.
<PAGE>
(i) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPV"), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower, the option to provide to
the Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPV to
make any Loan and (ii) if an SPV elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPV hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPV shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior indebtedness of any SPV, it
will not institute against, or join any other person in instituting against,
such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the Unites Sates or any State thereof. In
addition, notwithstanding anything to the contrary in this Section 9.04, any SPV
may (i) with notice to, but without the prior written consent of, the Borrower
and the Administrative Agent and without paying any processing fee therefor,
assign all or a portion of its interests in any Loans to the Granting Lender or
to any financial institutions (consented to by the Borrower and the
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPV to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPV. As this Section
9.04(i) applies to any particular SPV, this section may not be amended without
the written consent of such SPV.
SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, the Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated.
The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Letters of Credit and the Commitments or the termination
of this Agreement or any provision hereof.
<PAGE>
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents, the commitment letters and fee letters heretofore
entered into with the Initial Lenders and Credit Suisse First Boston relating to
the facilities contemplated by this Agreement and any separate letter agreements
with respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof; provided that the Borrower's obligations under such
commitment letters shall terminate and be superseded by the provisions of the
Loan Documents on the Effective Date to the extent specifically set forth in
such commitment letters. Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If (i) a Senior Event of
Default shall have occurred and be continuing, each Senior Lender and each of
its Affiliates or (ii) a Tranche D Event of Default shall have occurred and be
continuing, each Tranche D Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have and are subject to the provisions of Article X.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
<PAGE>
(b) Each of Allied Waste and the Borrower hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto 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 Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against Allied Waste, the Borrower or its properties
in the courts of any jurisdiction.
(c) Each of Allied Waste and the Borrower 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 this Agreement
or any other Loan Document in any court referred to in paragraph (b) of this
Section. Each of the parties hereto 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.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
<PAGE>
SECTION 9.12. Confidentiality. Each of the Administrative
Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) to any direct or
indirect contractual counterparty to an Interest Rate Protection Agreement or
such contractual counterparty's professional advisor (so long as such
contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section 9.12), (h) to
the National Association of Insurance Commissioners or any similar organization,
(i) with the consent of the Borrower or (h) to the extent such Information (j)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, the Issuing Bank or any
Lender on a nonconfidential basis from a source other than Allied Waste or the
Borrower. For the purposes of this Section, "Information" means all information
received from Allied Waste or the Borrower relating to Allied Waste or the
Borrower or its business, other than any such information that is available to
the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by Allied Waste or the Borrower; provided that, in the
case of information received from Allied Waste or the Borrower after the date
hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 9.14. Exchange of Loans for Exchange Notes. (a) At any
time and from time to time, on or after the first anniversary of the Effective
Date and before the Tranche D Maturity Date, if all or any portion of a Tranche
D Loan of any Tranche D Lender shall remain outstanding, such Tranche D Lender
shall have the option to receive an Exchange Note in exchange for all or a
portion of such Loan in accordance with clause (b) of this Section. The
principal amount of any Exchange Note received in such an exchange will equal
100% of the aggregate principal amount of the Tranche D Loan (or portion
thereof) for which it is exchanged on the date of exchange (any such date, an
"Exchange Date").
<PAGE>
(b) To request an Exchange Note, a Tranche D Lender shall, by
hand delivery or telecopy to the Administrative agent and the Borrower, deliver
a written request (an "Exchange Request") that specifies the aggregate principal
amount of such Tranche D Lender's Tranche D Loan to be exchanged ,which shall be
in an aggregate amount that is an integral multiple of $100,000 and not less
than $1,000,000; provided that a Tranche D Lender may not elect to exchange its
outstanding Tranche D Loan for an Exchange Note unless such Tranche D Lender
intends at the time of such partial exchange to sell the Exchange Note received
in such exchange to a third party and so certifies to such intent in the
applicable Exchange Notice. The Borrower shall, not later than five Business
Days following receipt of an Exchange Request, (i) execute and deliver, cause
each Tranche D Restricted Subsidiary to execute and deliver and cause a bank or
trust company that meets the requirements of Section 7.10 of the Exchange Note
Indenture to execute and deliver, in its capacity thereunder, the Exchange Note
Indenture if the Exchange Note Indenture shall not have been previously executed
and delivered and (ii) prepare, execute and deliver to such Tranche D Lender in
accordance with the terms of the Exchange Note Indenture, an Exchange Note (A)
payable to such Tranche D Lender, (B) in a principal amount equal to the
principal amount of such Tranche D Lender's Loan (or portion thereof) being
exchanged, (C) bearing interest as set forth in the Exchange Note Indenture and
(D) dated the Exchange Date, and cause each Tranche D Restricted Subsidiary to
endorse its Guarantee thereon. Upon such exchange, the Tranche D Loan (or
portion thereof) so exchanged shall be deemed repaid in an amount equal to the
aggregate principal amount of such Tranche D Loan so exchanged.
(c) Any Exchange Note issued in accordance with this Section
shall be governed by, and construed in accordance with, the terms of the
Exchange Note Indenture.
(d) If any Default (but not an Event of Default) shall have
occurred and be continuing on any Exchange Date, any notices given or cure
periods commenced while the Tranche D Loan to be exchanged was outstanding shall
be deemed given or commenced (as of the actual date thereof) for all purposes
with respect to the applicable Exchange Note (with the same effect as if the
relevant Exchange Note had been outstanding as of the actual dates as provided
in the Exchange Note Indenture).
SECTION 9.15. Registration Rights. If Exchange Notes are
issued pursuant to the terms hereof, then the holders of such Exchange Notes
shall have the right, as set forth in an Exhibit to the Exchange Note Indenture,
to require the Borrower to use its best efforts to register the Exchange Notes
under the Securities Act of 1933.
ARTICLE X
Subordination
SECTION 10.01. Agreement To Subordinate. The Borrower agrees,
and each Tranche D Lender agrees, that the Tranche D Obligations are
subordinated in right of payment, to the extent and in the manner provided in
this Article X, to the prior payment in full in cash or Cash Equivalents of all
Senior Indebtedness and that the subordination is for the benefit of and
enforceable by the holders of Senior Indebtedness. The Tranche D Obligations
shall in all respects rank pari passu with all other Senior Subordinated
Indebtedness of the Borrower and only indebtedness of the Borrower that is
Senior Indebtedness shall rank senior to the Tranche D Obligations in accordance
with the provisions set forth herein.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Borrower to creditors upon a total
or partial liquidation or a total or partial dissolution of the Borrower or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Borrower or its property:
<PAGE>
(1) holders of Senior Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents of the Senior
Indebtedness before Tranche D Lenders shall be entitled to receive any
payment of principal of, or premium, if any, interest or any other
amount in respect of the Tranche D Obligations; and
(2) until the Senior Indebtedness is paid in full in cash or
in Cash Equivalents, any payment or distribution to which Tranche D
Lenders would be entitled but for this Article X shall be made to
holders of Senior Indebtedness as their interests may appear.
SECTION 10.03. Default on Senior Indebtedness. The Borrower
may not pay the principal of, premium, if any, interest on, or any other amount
in respect of the Tranche D Obligations or make any deposit pursuant to any
defeasance provision or otherwise repay any Tranche D Obligation (collectively,
"repay the Tranche D Obligations") if (i) any Senior Indebtedness is not paid
when due or (ii) any other default on Senior Indebtedness occurs and the
maturity of such Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or waived and any such
acceleration has been rescinded or (y) such Senior Indebtedness has been paid in
full in cash or Cash Equivalents; provided, however, that the Borrower may repay
the Tranche D Obligations without regard to the foregoing if the Borrower and
the Administrative Agent receive written notice approving such payment from the
Representative of the Designated Senior Indebtedness with respect to which
either of the events set forth in (i) or (ii) above has occurred and is
continuing. During the continuance of any default (other than a default
described in clause (i) or (ii) of the preceding sentence) with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Borrower may not repay the Tranche D Obligations for a period (a
"Payment Blockage Period") commencing upon the receipt by the Borrower and the
Administrative Agent of written notice (a "Blockage Notice") of such default
from the Representative of such Designated Senior Indebtedness specifying an
election to effect a Payment Blockage Period and ending 179 days thereafter (or
earlier if such Payment Blockage Period is terminated (i) by written notice to
the Administrative Agent and the Borrower from the Person or Persons who gave
such Blockage Notice, (ii) by repayment in full of such Designated Senior
Indebtedness or (iii) because the default giving rise to such Blockage Notice is
no longer continuing). Notwithstanding the provisions described in the
immediately preceding sentence (but subject to the provisions contained in the
first sentence of this Section), unless the holders of such Designated Senior
Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, the Borrower may resume payment
of the Tranche D Obligations after such Payment Blockage Period. Not more than
one Blockage Notice may be given in any consecutive 360-day period, irrespective
of the number of defaults with respect to the Designated Senior Indebtedness
during such period; provided, however, that if any Blockage Notice within such
360-day period is given by or on behalf of any holders of Designated Senior
Indebtedness (other than the Bank Indebtedness), the Representative of the Bank
Indebtedness may give another Blockage Notice within such period; provided
further, however, that in no event may the total number of days during which any
Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate
during any 360 consecutive day period.
<PAGE>
SECTION 10.04. Acceleration of Payment of Notes. If repayment
of the Tranche D Obligations are accelerated because of a Tranche D Event of
Default, the Borrower or the Administrative Agent shall promptly notify the
holders of the Designated Senior Indebtedness of the acceleration. If any
Designated Senior Indebtedness is outstanding, the Borrower may not repay the
Tranche D Obligations until five Business Days after the representative of the
Designated Senior Indebtedness receives notice of such acceleration and,
thereafter, may repay the Tranche D Obligations only if this Article X otherwise
permits the payment at that time.
SECTION 10.05. When Distributions Must Be Paid Over. If a
distribution is made to Tranche D Lenders that because of this Article X should
not have been made to them, the Tranche D Lenders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness and pay it over to
them as their interests may appear.
SECTION 10.06. Subrogation. After all Senior Indebtedness is
paid in full and until the Tranche D Obligations are repaid in full, Tranche D
Lenders shall be subrogated to the rights of holders of Senior Indebtedness to
receive distributions applicable to Senior Indebtedness. A distribution made
under this Article X to holders of Senior Indebtedness that otherwise would have
been made to Tranche D Lenders is not, as between the Borrower and Tranche D
Lenders, a payment by the Borrower on Senior Indebtedness.
SECTION 10.07. Relative Rights. This Article X defines the
relative rights of Tranche D Lenders and holders of Senior Indebtedness.
Nothing in this Agreement shall:
(1) impair, as between the Borrower and Tranche D Lenders, the
obligation of the Borrower, which is absolute and unconditional, to pay
principal of, premium, if any, interest or any other amounts in respect
of Tranche D Obligations in accordance with the terms thereof; or
(2) prevent the Administrative Agent or any Senior Lender from
exercising its available rights of holders of Senior Indebtedness to
receive distributions otherwise payable to Tranche D Lenders.
SECTION 10.08. Subordination May Not Be Impaired by Borrower.
No right of any holder of Senior Indebtedness to enforce the subordination of
the Tranche D Obligations shall be impaired by any act or failure to act by the
Borrower or by its failure to comply with this Agreement.
SECTION 10.09. Rights of Administrative Agent. Notwithstanding
Section 10.03, the Administrative Agent may continue to make payments on the
Tranche D Obligations and shall not be charged with knowledge of the existence
of facts that would prohibit the making of any such payments unless, not less
than two Business Days prior to the date of such payment, a Responsible Officer
of the Administrative Agent receives notice satisfactory to it that payments may
not be made under this Article X. The Borrower, a Representative or a holder of
Senior Indebtedness may give the notice.
<PAGE>
The Administrative Agent in its individual or any other
capacity may hold Senior Indebtedness with the same rights it would have if it
were not Administrative Agent. The Administrative Agent shall be entitled to all
the rights set forth in this Article X with respect to any Senior Indebtedness
that may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness; and nothing in Article VIII shall deprive the
Administrative Agent of any of its rights as such holder. Nothing in this
Article X shall apply to claims of, or payments to, the Administrative Agent
under or pursuant to Article VIII.
SECTION 10.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article X Not To Prevent Tranche D Events of
Default or Limit Right To Accelerate. The failure to make a payment pursuant to
Tranche D Obligations by reason of any provision in this Article X shall not be
construed as preventing the occurrence of a Tranche D Default. Nothing in this
Article X shall have any effect on the right of the Tranche D Lenders or the
Administrative Agent to accelerate the maturity of the Tranche D Obligations.
SECTION 10.12. Administrative Agent Entitled To Rely. Upon any
payment or distribution pursuant to this Article X, the Administrative Agent and
the Tranche D Lenders shall be entitled to rely (i) upon any order or decree of
a court or competent jurisdiction in which any proceedings of the nature
referred to in Section 10.02 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution
to the Administrative Agent or to the Tranche D Lenders or (iii) upon the
Representatives for the holders of Senior Indebtedness for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other Indebtedness of
the Borrower, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
X. In the event that the Administrative Agent determines, in good faith, that
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article X, the Administrative Agent may request such Person to furnish
evidence to the reasonable satisfaction of the Administrative Agent as to the
amount of Senior Indebtedness held by such person, the extent to which such
Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article X, and, if such
evidence is not furnished, the Administrative Agent may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment. The provisions of Article VIII shall be applicable to all
actions or omissions of actions by the Administrative Agent pursuant to this
Article X.
SECTION 10.13. Administrative Agent To Effectuate
Subordination. Each Tranche D Lender by making Tranche D Term Loans, authorizes
and directs the Administrative Agent on such Tranche D Lender's behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Tranche D Lenders and the holders of Senior
Indebtedness as provided in this Article X and appoints the Administrative Agent
as attorney-in-fact for any and all such purposes.
SECTION 10.14. Administrative Agent Not Fiduciary for Holders
of Senior Indebtedness. The Administrative Agent shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness and shall not be liable to
any such holders if it shall mistakenly pay over or distribute to the Tranche D
Lenders or the Borrower or any other Person, money or assets to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article X or
otherwise.
<PAGE>
SECTION 10.15. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Tranche D Lender by making Tranche D Term Loans,
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the making of the Tranche D Term Loans, to acquire and continue to hold,
such Senior Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such
[space intentionally left blank]
<PAGE>
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
ALLIED WASTE INDUSTRIES, INC.,
by
-------------------------
Name:
Title:
ALLIED WASTE NORTH AMERICA, INC.,
by
-------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as Administrative
Agent and Collateral Agent,
by
-------------------------
Name:
Title:
CITICORP USA, INC.,
individually and as
Syndication Agent,
by
-------------------------
Name:
Title:
DLJ CAPITAL FUNDING, INC.,
individually and as
Documentation Agent,
by
-------------------------
Name:
Title:
<PAGE>
CREDIT SUISSE FIRST BOSTON, individually and as Documentation Agent,
by
-------------------------
Name:
Title:
by
-------------------------
Name:
Title:
SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
This Second Amended and Restated Shareholders Agreement, dated
as of July 30, 1999 (this "Agreement"), by and between Allied Waste Industries,
Inc., a Delaware corporation (the "Company"), on the one hand, and Apollo
Investment Fund IV, L.P., a Delaware limited partnership ("AIF IV"), Apollo
Investment Fund III, L.P., a Delaware limited partnership ("AIF III"), Apollo
Overseas Partners IV, L.P., a Delaware limited partnership ("AOP IV"), Apollo
Overseas Partners III, L.P., a Delaware limited partnership ("AOP III"), Apollo
(U.K.) Partners III, L.P., an English limited partnership ("AUK III"), Apollo/AW
LLC, a Delaware limited liability company ("AAW"), Blackstone Capital Partners
II Merchant Banking Fund L.P., a Delaware limited partnership ("BCP II"),
Blackstone Capital Partners III Merchant Banking Fund L.P., a Delaware limited
partnership ("BCP"), Blackstone Offshore Capital Partners III L.P., a Cayman
Islands limited partnership ("BOC III"), Blackstone Offshore Capital Partners II
L.P., a Cayman Islands limited partnership ("BOC II"), Blackstone Family
Investment Partnership III L.P., a Delaware limited partnership ("BFP III"), and
Blackstone Family Investment Partnership II L.P., a Delaware limited partnership
("BFP II"), Greenwich Street Capital Partners II, L.P., a Delware limited
partnership, GSCP Offshore Fund, L.P., a Cayman Islands exempted limited
partnership, Greenwich Fund, L.P., a Delaware limited partnership, Greenwich
Street Employees Fund, L.P., a Delaware limited partnership, TRV Executive Fund,
L.P., a Delaware limited partnership, DLJMB Funding II, Inc., a Delaware
corporation, DLJ Merchant Banking Partners II, L.P., a Delaware limited
partnership, DLJ Merchant Banking Partners II-A, L.P., a Delaware limited
partnership, DLJ Diversified Partners, L.P., a Delaware limited partnership, DLJ
Diversified Partners-A, L.P., a Delaware limited partnership, DLJ Millennium
Partners, L.P., a Delaware limited partnership, DLJ Millennium Partners-A, L.P.,
a Delaware limited partnership, DLJ First ESC L.P., a Delaware limited
partnership, DLJ Offshore Partners II, C.V., a Netherlands Antilles limited
partnership, DLJ EAB Partners, L.P., a Delaware limited partnership, and DLJ ESC
II L.P., a Delaware limited partnership (collectively, the "Shareholders"), on
the other hand, amending and restating in its entirety the Amended and Restated
Shareholders Agreement dated as of April 21, 1997 (the "Original Agreement"), by
and between the Company, on the one hand, and certain of the Shareholders, on
the other hand.
WHEREAS, certain of the Shareholders purchased an aggregate of
11,776,765 shares (the "TPG Group Block") of the Company's common stock, par
value $.01 per share (the "Common Stock"), from TPG Partners, L.P., a Delaware
limited partnership, and TPG Parallel I, L.P., a Delaware limited partnership,
and an aggregate of 14,600,000 shares of Common Stock (the "Laidlaw Block" and
together with the TPG Group Block, the "Shares") from Laidlaw, Inc., a Canadian
corporation;
WHEREAS, under the Original Agreement, the Company granted to
certain of the Shareholders the right as a group to appoint certain designees
for election to the Board of Directors of the Company and those Shareholders
agreed to certain restrictions on the acquisition and disposition of Common
Stock and the conduct of such Shareholders with respect to the Company;
WHEREAS, simultaneously with the execution of this Agreement,
certain of the Shareholders are entering into (i) a Preferred Stock Purchase
Agreement (the "Preferred Stock Purchase Agreement") pursuant to which, upon the
terms and subject to the conditions set forth in the Purchase Agreement, certain
of the Shareholders shall purchase an aggregate of 1,000,000 shares of Senior
Convertible Preferred Stock, par value $.10 per share, of the Company ("Senior
Preferred Stock"), which shall be convertible into either shares of Series A
Junior Preferred Stock, par value $.10 per share, of the Company ("Junior
Preferred Stock"), or shares of Common Stock, and (ii) an Amended and Restated
Registration Rights Agreement (the "Registration Rights Agreement") granting
certain registration rights; and
WHEREAS, in recognition of Shareholders' significant change in
ownership in the Company upon the closing of the purchase of the Senior
Preferred Stock pursuant to the Preferred Stock Purchase Agreement, the parties
desire to amend and restate the Original Agreement in its entirety (except as
may be otherwise set forth herein) as set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement, the Preferred Stock Purchase Agreement,
and in the Amended and Restated Registration Rights Agreement and intending to
be legally bound hereby, the parties agree as follows, effective upon the
closing of the purchase of the Senior Preferred Stock pursuant to the Preferred
Stock Purchase Agreement:
ARTICLE 1
Definitions; Representations and Warranties
SECTION 1.1 Definitions. Unless otherwise specified all
references to "days" shall be deemed to be references to calendar days. For
purposes of this Agreement, the following terms shall have the following
meanings:
"Actual Voting Power" shall mean, as of the date of
determination, the total voting power of all the then outstanding securities of
the Company at the time then entitled to vote for the general election of
directors, without giving effect to securities issuable upon exercise or
conversion of such outstanding securities. (When issued, shares of Senior
Preferred Stock and Junior Preferred Stock shall be deemed to be outstanding
securities then entitled to vote for the general election of directors and (i)
each share of Senior Preferred Stock will be deemed, as of the date of
determination, to have the number of votes that would be represented by the
number of shares of Common Stock into which such share of Senior Preferred Stock
pursuant to its terms would otherwise be convertible and (ii) each share of
Junior Preferred Stock will be deemed, as of the date of determination, to have
the number of votes that would otherwise be represented by the number of shares
of Common Stock in lieu of whose issuance such share of Junior Preferred Stock
is issued.)
"Affiliate" of a Person shall have the meaning set forth in
Rule 12b-2 of the Exchange Act as in effect on the date of this Agreement, but
shall not include (i) any investment fund in which a Person has invested if the
Person does not otherwise control the investment fund or have, directly or
indirectly, voting or dispositive power over any securities owned by such fund
or (ii) any investor or limited partner of any Person who does not otherwise
have voting or dispositive power over securities owned by that Person and is not
controlled by that Person. It is expressly intended that any Person who now or
hereafter controls, directly or indirectly, any Shareholder (other than an
Exempt Affiliate) shall be subject to the restrictions of Section 2.1 as if it
were a Shareholder.
"Apollo/Blackstone Shareholders" mean those Shareholders who
are affiliated with either Apollo Advisors II, L.P., Apollo Management IV, L.P.
or Blackstone Management Associates II L.L.C., including, but not limited to,
AIF III, AOP III, AUK III, AIF IV, AOP IV, AAW, BCP, BOC III, BFP III, BCP II,
BOC II and BFP II.
"Apollo/Blackstone Shares" means the TPG Group Block, the
Laidlaw Block, the 790,000 shares of Senior Preferred Stock to be sold to the
Apollo/Blackstone Shareholders pursuant to the Preferred Stock Purchase
Agreement and any shares of Common Stock or Junior Preferred Stock issued upon
conversion of such 790,000 shares of Senior Preferred Stock or of such Junior
Preferred Stock.
"Beneficial ownership" by a Person of any Voting Securities
shall be determined in accordance with the term "beneficial ownership" as
defined in Rule 13d-3 under the Exchange Act as in effect on the date of this
Agreement and, in addition, "beneficial ownership" shall include securities
which such Person has the right to acquire (irrespective of whether such right
is exercisable immediately or only after the passage of time, including the
passage of time in excess of sixty (60) days) pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise. For purposes of this Agreement, a
Shareholder shall be deemed to beneficially own any Voting Securities
beneficially owned by its Affiliates or any Group of which such Shareholder or
any such Affiliate is a member.
"Board of Directors" shall mean the Board of Directors of the
Company.
"Commission" shall mean the Securities and Exchange
Commission.
"Conversion Shares" shall mean the shares of Junior Preferred
Stock or shares of Common Stock into which shares of Senior Preferred Stock or
Junior Preferred Stock have been converted.
"DLJ Parent Entities" mean and includes Donaldson, Lufkin &
Jenrette Securities Corporation, Donaldson, Lufkin & Jenrette Inc., DLJdirect
Inc. Pershing Trading, L.P., Autranet Inc. and any Person that, directly or
indirectly, controls Donaldson, Lufkin & Jenrette Inc.
"DLJ Shareholders" shall mean DLJMB Funding II, Inc., DLJ
Merchant Banking Partners II, L.P., DLJ Merchant Banking Partners II-A, L.P.,
DLJ Diversified Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium
Partners, L.P., DLJ Millennium Partners-A, L.P., DLJ First ESC L.P., DLJ
Offshore Partners II, C.V., DJL EAB Partners, L.P. and DLJ ESC II L.P.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Greenwich Street Parent Entities" means and includes
CitiGroup and Salomon Smith Barneyand any Person or Group that, directly or
indirectly, controls CitiGroup.
"Greenwich Street Shareholders" shall mean Greenwich Street
Capital Partners II, L.P., GSCP Offshore Fund, L.P., Greenwich Fund, L.P.,
Greenwich Street Employees Fund, L.P. and TRV Executive Fund, L.P.
"Group" shall mean a "group" as such term is used in Section
13(d)(3) of the Exchange Act as in effect on the date of this Agreement.
"Laws" shall mean all applicable foreign, federal, state and
local laws, statutes, rules, regulations, codes and ordinances.
"Person" shall mean any individual, Group, corporation,
general or limited partnership, limited liability company, governmental entity,
joint venture, estate, trust, association, organization or other entity of any
kind or nature.
"Related Person" means, with respect to any Person, (A) any
Affiliate of such Person, (B) any investment manager, investment advisor or
partner of such Person or an Affiliate of such Person, and (C) any investment
fund, investment account or investment entity whose investment manager,
investment advisor or general partner is such Person or a Related Person of such
Person; provided, however, that "Related Person" shall mean with respect to any
DLJ Shareholder, (I) any general or limited partner of such DLJ Shareholder (a
"DLJ Partner"), (II) any corporation, partnership or other entity which is an
Affiliate of such DLJ Shareholder or of any DLJ Partner (collectively, the "DLJ
Affiliates"), (III) any managing director, general partner, director, limited
partner, officer or employee of (x) such DLJ Shareholder, (y) such DLJ Partner
or (z) any DLJ Affiliate of such DLJ Partner or a DLJ Affiliate, or the heirs,
executors, administrators, testamentary trustees, legatees or beneficiaries of
any of the foregoing Persons referred to in this clause (III) (collectively,
"DLJ Associates"), (IV) any trust, the beneficiaries of which, or a corporation,
limited liability company or partnership, the stockholders, members or general
or limited partners of which, include only such DLJ Shareholder, DLJ Affiliates,
DLJ Associates, their spouses or their lineal descendants, and (V) a voting
trustee for one or more DLJ Shareholders, DLJ Affiliates or DLJ Associates.
"Reorganization Transaction" means: (i) any merger,
consolidation, recapitalization, liquidation or other business combination
transaction involving the Company; (ii) any tender offer or exchange offer for
any securities of the Company; or (iii) any sale or other disposition of assets
of the Company or any of its Subsidiaries in a single transaction or in a series
of related transactions in each of the foregoing cases constituting individually
or in the aggregate 10% or more of the assets or Voting Securities (as
applicable) of the Company.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shareholder Designee" shall mean a person designated for
election to the Board of Directors by the Apollo/Blackstone Shareholders as
provided in Section 3.1.
"Total Voting Power" shall mean the total combined Voting
Power, on a fully diluted basis, of all the Voting Securities then outstanding.
"Voting Power" shall mean, as of the date of determination,
the voting power in the general election of directors of the Company, and shall
be calculated for each Voting Security by reference to the maximum number of
votes such Voting Security is or would be entitled to cast in the general
election of directors, and, in the case of convertible (or exercisable or
exchangeable) securities, by reference to the maximum number of votes such
Voting Security would be entitled to cast in unconverted or converted (or
exercised, unexercised, exchanged or unexchanged) status. For purposes of
determining Voting Power under this Agreement, a Voting Security which is
convertible into or exchangeable for a Voting Security shall be counted as
having the greater of (i) the number of votes to which such Voting Security is
entitled prior to conversion or exchange and (ii) the number of votes to which
the Voting Security into which such Voting Security is convertible or
exchangeable is entitled. Notwithstanding anything else to the contrary
contained in this Agreement, there shall not be included in calculating Voting
Power any votes which a Person shall have upon and by reason of the non-payment
of dividends on preferred shares in accordance with the terms of such preferred
shares.
"Voting Securities" shall mean (x) any securities entitled, or
which may be entitled, to vote generally in the election of directors of the
Company (including, when issued, shares of Senior Preferred Stock and Junior
Preferred Stock), (y) any securities convertible or exercisable into or
exchangeable for such securities (whether or not the right to convert, exercise
or exchange is subject to the passage of time or contingencies or both), or (z)
any direct or indirect rights or options to acquire any such securities;
provided that unexercised options granted pursuant to any employment benefit or
similar plan and rights issued pursuant to any shareholder rights plan shall be
deemed not to be "Voting Securities" (or to have Voting Power).
In addition, the following terms have the definitions
specified in the Sections noted:
Term Section
---- -------
AIF IV recitals
AIF III recitals
AOP IV recitals
AOP III recitals
AUK III recitals
AAW recitals
Actual Voting Power Threshold 3.1(b)
Agreement recitals
BCP recitals
BCP II recitals
BOC III recitals
BOC II recitals
BFP III recitals
BFP II recitals
Beneficial Ownership Threshold 3.1(b)
Common Stock recitals
Company recitals
Credit Agreement 1.2(e)
Disposition 4.1
Exempt Affiliate 2.1
Future Major Investor 2.3
HSR Act 1.2(c)
Information 3.4
Junior Preferred Stock recitals
Laidlaw Block recitals
Laidlaw recitals
Management Directors 3.1(b)
Material Adverse Effect 1.2(b)
Moving Party 5.3
Nominating Committee 3.1(b)
Original Agreement recitals
Preferred Stock Purchase Agreement recitals
Purchase Date 4.1(b)
Registration Rights Agreement recitals
Related Transferee 4.1(f)
Representatives 5.13
Rule 144 Sale 4.1(c)
Senior Preferred Stock recitals
Shareholder Designee Period 3.1(b)
Shareholders recitals
Shares recitals
Specific Rights 5.13
Standstill Period 2.1
TPG Group Block recitals
Unaffiliated Directors 3.1(b)
SECTION 1.2. Representations and Warranties of the Company.
The Company represents and warrants to Shareholders as follows:
(a) The execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby are within its corporate powers and have been duly
authorized by all necessary corporate action on its part. This Agreement
constitutes a legal, valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, subject, as to enforcement, to
bankruptcy, and insolvency, fraudulent transfer reorganization, moratorium and
similar laws of general applicability relating to or affecting creditor's rights
and to general equity principles.
(b) The execution, delivery and performance of this Agreement
by the Company does not and will not (i) contravene or conflict with or
constitute a default under the Company's Certificate of Incorporation or Bylaws,
(ii) contravene or conflict with or constitute a default under any agreement to
which the Company is a party or is bound, or result in a breach of or default
under any instrument or agreement to which the Company is a party or is bound,
which violation, breach or default would have a material adverse effect on the
Company's business taken as a whole or would adversely affect the consummation
of the transactions contemplated by this Agreement or the Preferred Stock
Purchase Agreement (a "Material Adverse Effect"), (iii) violate any judgment,
order, injunction, decree or award against or binding upon the Company as of the
date of this Agreement, the violation of which, individually or in the
aggregate, would have a Material Adverse Effect, (iv) violate any Law relating
to the Company, the violation of which, individually or in the aggregate, would
have a Material Adverse Effect or (v) constitute a "change of control," or
result in the acceleration of rights, under any material debt instrument to
which the Company is a party.
(c) Except for applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
and the Exchange Act or as disclosed in the Preferred Stock Purchase Agreement,
the Company is not required to make any filing or registration with, or obtain
any permit, authorization, consent or approval of, any governmental entity or
any other Person in connection with this Agreement, the Preferred Stock Purchase
Agreement, or any of the transactions contemplated hereby and thereby.
(d) As of the date of this Agreement, there is no action, suit
or proceeding pending or, to the knowledge of the Company, threatened against
the Company that relates to this Agreement, the Preferred Stock Purchase
Agreement, or any of the transactions contemplated hereby or thereby.
(e) As of the date hereof, the Company would be entitled to
make at least $1.00 in additional borrowings under the Credit Agreement (the
"Credit Agreement") among the Company, Allied Waste North America, Inc., the
lenders party thereto, The Chase Manhattan Bank, as Administrative Agent,
Collateral Agent and Collateral Trustee, Citicorp USA, Inc., as Syndication
Agent, Credit Suisse First Boston and DLJ Capital Funding, Inc., as
Documentation Agents, and the consummation of the transactions contemplated by
the Amended and Restated Agreement and Plan of Merger, dated as of May 21, 1999,
among Browning - Ferris Industries, Inc., the Company and AWINI Acquisition
Corporation and this Agreement will not, by itself, limit the Company's ability
to borrow under the Credit Agreement.
(f) All documents which have been filed by the Company with
the Commission under the Exchange Act, at the time they were filed with the
Commission, conformed in all material respects with the requirements of Exchange
Act, and the rules and regulations of the Commission thereunder, and, as of the
date thereof and taken as a whole as of the date hereof do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
SECTION 1.3. Representations and Warranties of Shareholder.
Each Shareholder severally, but not jointly, represents and warrants to the
Company as follows:
(a) The execution, delivery and performance by such
Shareholder of this Agreement and the consummation by such Shareholder of the
transactions contemplated by this Agreement are within its powers and have been
duly authorized by all necessary action on its part. This Agreement constitutes
a legal, valid and binding agreement of such Shareholder enforceable against
such Shareholder in accordance with its terms, subject, as to enforcement, to
bankruptcy, and insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditor's rights
and to general equity principles.
(b) The execution, delivery and performance of this Agreement
by such Shareholder does not and will not contravene or conflict with or
constitute a default under such Shareholder's partnership agreement or similar
governing documents.
(c) As of the date of this Agreement, such Shareholder does
not beneficially own any Voting Securities except (i) any Voting Securities
beneficially owned on the date hereof in compliance with the Original Agreement
and (ii) to the extent such shares may be deemed to be beneficially owned, the
shares of Senior Preferred Stock which are subject to the Preferred Stock
Purchase Agreement.
ARTICLE 2
Standstill
SECTION 2.1. Standstill. (a) Until the earliest to occur of
(A) the tenth anniversary of the purchase of the Senior Preferred Stock pursuant
to the Preferred Stock Purchase Agreement, (B) the date on which the
Apollo/Blackstone Shareholders own, collectively, Voting Securities which would
represent (i) less than 10% of the Total Voting Power, excluding voting
securities beneficially owned by the Shareholders other than the
Apollo/Blackstone Shareholders and (ii) less than 10% of the Actual Voting
Power, excluding voting securities beneficially owned by the Shareholders other
than the Apollo/Blackstone Shareholders; provided that the Shareholders at such
time are entitled to designate not more than one director pursuant to Article 3
hereof, and (C) termination under Section 2.2 (such period, the "Standstill
Period") (provided that the Standstill Period shall end (x) with respect to the
DLJ Shareholders, on the date on which the DLJ Shareholders no longer own any
shares of Senior Preferred Stock or any Conversion Shares, and (y) with respect
to the Greenwich Street Shareholders, on the date on which the Greenwich Street
Shareholders no longer own any shares of Senior Preferred Stock or any
Conversion Shares), each Shareholder will not, and will cause each of its
Affiliates (other than Exempt Affiliates) not to, directly or indirectly:
(i) acquire, offer to acquire, or agree to acquire,
by purchase or otherwise, any Voting Securities or voting rights or
direct or indirect rights or options to acquire any Voting Securities
of the Company or any of its Affiliates other than (A) the exercise of
convertible securities acquired in compliance with the terms of this
Agreement (including the acquisition of shares of Common Stock or
Junior Preferred Stock upon conversion of shares of Senior Preferred
Stock), or an acquisition as a result of a stock split, stock dividend
or similar recapitalization, (B) the acquisition of shares of Senior
Preferred Stock which are subject to the Preferred Stock Purchase
Agreement, (C) with the prior written consent of the chairman of the
Board of Directors and the chief executive officer of the Company,
acquisitions by the Apollo/Blackstone Shareholders of up to a
collective aggregate amount of 3,000,000 shares (as such number may be
appropriately adjusted to reflect stock splits, reverse stock splits,
stock dividends or any other recapitalization of the Company) of Common
Stock, (D) stock options or similar rights granted by the Company to an
Affiliate of such Shareholder as compensation for performance as a
director or officer of the Company or its subsidiaries (and any shares
issuable upon exercise thereof), (E) transfers between such Shareholder
and Related Transferees as permitted under Section 4.1(f) or (F) any
rights which are granted to all shareholders of the Company (and any
shares issuable upon exercise thereof); provided, however, that if the
Shareholders or any of their Affiliates in good faith inadvertently
acquire not more than 500,000 shares of Common Stock in violation of
these provisions and within 15 days after the first date on which the
Shareholders have actual knowledge (including by way of written notice
given by the Company) that a violation has occurred Shareholders or any
of their Affiliates shall have transferred any shares of Common Stock
held in violation of these provisions to unrelated third parties so
that the Shareholders and their Affiliates no longer beneficially own
any such shares or have any agreement or understanding relating to such
shares, this Section 2.1 shall be deemed to not have been violated; and
provided, further, that no violation of this provision shall be deemed
to have occurred by reason of the indirect acquisition of beneficial
ownership of securities resulting from (x) investments in investment
funds as to which no Shareholder or Affiliate thereof has control or
power to control with respect to voting or investment decisions or (y)
acquisitions of securities by a limited partner in any Shareholder or
Affiliates thereof as to which limited partner no Shareholder or its
Affiliates has control or power to control;
(ii) make or cause to be made any proposal for a
Reorganization Transaction except for Dispositions in accordance with
Article 4;
(iii) form, join or in any way participate in a Group
with respect to any securities of the Company or its Affiliates, other
than with other Shareholders or Affiliates of any Shareholder;
provided, however, that in the case of securities other than Voting
Securities, Shareholders may participate in a Group with respect
thereto with the prior approval of a majority of the entire Board of
Directors (which approval is requested in a manner which does not
require disclosure publicly or to any third party);
(iv) make, or in any way cause or participate in, any
"solicitation" of "proxies" to vote (as those terms are defined in
Regulation 14A under the Exchange Act) with respect to the Company or
its Affiliates, or communicate with, seek to advise, encourage or
influence any Person, in any manner, with respect to the voting of,
securities of the Company or its Affiliates, or become a "participant"
in any "election contest" (as those terms are defined or used in Rule
14a-11 under the Exchange Act) with respect to the Company or its
Affiliates (other than non-public communications with other
Shareholders or Affiliates of any Shareholder which would not require
public disclosure by any Person or solicitation of proxies in support
of the election of Shareholder Designees, Management Directors and
Unaffiliated Directors nominated by the Board of Directors in
accordance with Section 3.1 hereof in circumstances in which a third
party is soliciting parties for the election of nominees not nominated
by the Board of Directors);
(v) initiate, propose or, except with the prior
approval of a majority of the entire Board of Directors (which approval
is requested in a manner which does not require disclosure publicly or
to any third parties) otherwise solicit stockholders for the approval
of one or more stockholder proposals with respect to the Company or its
Affiliates or induce or attempt to induce any other Person to initiate
any stockholder proposal or seek election to or seek to place a
representative on the Board of Directors of the Company (except
pursuant to Section 3.1 of this Agreement) or its Affiliates or seek
the removal of any member of the Board of Directors of the Company or
its Affiliates (for this purpose, the actions of the Shareholder
Designees in communicating (without public disclosure or disclosure to
third parties) with the Board of Directors in their capacity as
directors of the Company, and non-public communication by a Shareholder
with other Shareholders or Affiliates of any Shareholder which would
not require public disclosure by any Person, shall not be deemed to be
in contravention of this paragraph (v));
(vi) in any manner, agree, attempt, seek or propose
(other than making any request for permission with respect thereto
which would not require disclosure publicly or to any third party) to
deposit any securities of the Company or its Affiliates in any voting
trust or similar arrangement or to subject any securities of the
Company or its Affiliates to any other voting or proxy agreement,
arrangement or understanding (other than any such agreements or
understandings with other Shareholders or Affiliates of any
Shareholder);
(vii) offer, sell or transfer any Voting Securities
or rights to receive Voting Securities except for Dispositions in
accordance with Article 4;
(viii) disclose any intention, plan or arrangement,
or make any public announcement (or request permission to make any such
announcement other than making any request for permission which would
not require disclosure publicly or to any third party), or induce any
other Person to take any action, inconsistent with the foregoing;
(ix) enter into any negotiations, arrangements or
understandings with any third party with respect to any of the
foregoing;
(x) advise, assist or encourage or finance (or assist
or arrange financing to or for) any other Person in connection with any
of the foregoing;
(xi) otherwise act in concert with others, to seek to
control or influence the management, Board of Directors or policies of
the Company or its Affiliates (for this purpose, the actions of the
Shareholder Designees in their capacity as directors of the Company
shall not be deemed to be in contravention of this paragraph (xi)); or
(xii) request a waiver of any of the provisions of
any of paragraphs (i) through (xii) of this Section 2.1 (except any
request which would not require disclosure publicly or to any third
party);
provided, that this Section 2.1 shall not restrict or inhibit the rights of a
Shareholder to exercise its voting rights as a stockholder of the Company
(subject to Section 3.2).
(b) Affiliates of Shareholders who (i) are not
Apollo/Blackstone Shareholders or their Affiliates, (ii) are not Related
Transferees of any Shareholder, (iii) are not in possession of any material
non-public Information provided to Shareholders by the Company, its subsidiaries
or representatives pursuant to Section 3.4 hereof or otherwise, and (iv) do not
have voting or dispositive power over any shares of Senior Preferred Stock or
any Conversion Shares (such affiliates being "Exempt Affiliates") shall not be
subject to this Section 2.1.
(c) The DLJ Shareholders represent and warrant to the Company
that the DLJ Parent Entities are now, and at any time during the Standstill
Period that they take actions that would be otherwise prohibited by Section
2.1(a) will be, Exempt Affiliates. The Greenwich Street Shareholders represent
and warrant to the Company that the Greenwich Street Parent Entities are now,
and at all times during the Standstill Period that they take actions that would
be otherwise prohibited by Section 2.1(a) will be, Exempt Affiliates. Based upon
the foregoing representations and warranties in this Section 2.1(c), the Company
will consider the DLJ Parent Entities and the Greenwich Street Parent Entities
to be Exempt Affiliates.
SECTION 2.2. Early Termination of Standstill. The
obligations of Shareholders under Section 2.1 shall terminate early upon the
occurrence of any of the following events:
(a) At least $10,000,000 in indebtedness for monies borrowed
by the Company or its subsidiaries shall have been accelerated and payment
therefor shall not have been made within 20 days after such acceleration, and
the Company shall not in good faith be contesting whether such amount is owed.
(b) A final judgment or judgments (not subject to appeal) for
the payment of money shall have been entered against the Company or its
subsidiaries in an aggregate amount in excess of $10,000,000 (exclusive of any
amounts fully covered by insurance (less any applicable deductible) or
indemnification) by a court or courts of competent jurisdiction, which judgments
remain unsatisfied, undischarged, unstayed or unbonded for a period of 45 days
after the entry of such judgment or judgments.
(c) The Company shall file a petition in bankruptcy or for
reorganization or for an arrangement or any composition, readjustment,
liquidation, dissolution or similar relief pursuant to Title 11 of the United
States Code or under any similar present or future federal law or the law of any
other jurisdiction or shall be adjudicated a bankrupt or insolvent, or consent
to the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the Company or
for all or any substantial part of its property, or shall make a general
assignment for the benefit of its creditors.
(d) A petition or answer shall be filed proposing the
adjudication of the Company as bankrupt or its reorganization or arrangement, or
any composition, readjustment, liquidation, dissolution or similar relief with
respect to it pursuant to Title 11 of the United States Code or under any
similar present or future federal law or the law of any other jurisdiction, and
the Company shall consent to or acquiesce in the filing thereof, or such
petition or answer shall not be discharged or denied within 60 days after the
filing thereof.
(e) The Company shall be in material breach of its obligations
to Shareholders under the Registration Rights Agreement and such breach shall
not have been cured within 20 days after receipt by the Company from
Shareholders of a written notice specifying such breach and requiring it to be
remedied, and the Company shall not in good faith be contesting whether such
breach has occurred.
(f) If the Company shall, in breach of its obligations under
this Agreement, fail to nominate for election to the Board of Directors any
Shareholder Designee who satisfies the requirements for designation to the Board
of Directors set forth in Section 3.1(d).
SECTION 2.3. Modification Upon Subsequent Agreement. If (a)
the Company enters into any agreement, understanding or arrangement with any
other Person or Group (each a "Future Major Investor") relating to the Company's
obligation, whether absolute, contingent, current or future, to support or cause
the nomination of one or more Persons to the Board of Directors at the request
of the Future Major Investor, and (b) such agreement, understanding or
arrangement contains any terms with respect to the matters covered by this
Article 2 that are more favorable to the Future Major Investor than those
provided to the Shareholders hereunder, then this Article 2 shall be
automatically modified to include the more favorable terms and thereby provide
the Shareholders with rights at least as favorable and obligations no more
burdensome as those given to the Future Major Investor.
ARTICLE 3
Board Representation and Voting
SECTION 3.1. Board Representation. (a) Until the earlier to
occur of the tenth anniversary of the purchase of shares of Senior Preferred
Stock pursuant to the Preferred Stock Purchase Agreement and the date on which
the Apollo/Blackstone Shareholders own, collectively, less than 20% of the
Apollo/Blackstone Shares (the "Shareholder Designee Period"), the Board of
Directors shall consist of no more than thirteen (13) directors during the
Shareholder Designee Period.
For so long as the Apollo/Blackstone Shareholders are entitled
to at least two Shareholder Designees under this Agreement, the
Apollo/Blackstone Shareholders shall be entitled to have one Shareholder
Designee serve on each committee of the Board of Directors other than any
committee formed for the purpose of considering matters relating to the
Shareholders and as set forth below with respect to the Nominating Committee.
(b) Immediately following the purchase of shares of Senior
Preferred Stock pursuant to the Preferred Stock Purchase Agreement, the Company
will cause David Blitzer to be elected or appointed to the Board of Directors.
At all times during the Shareholder Designee Period, the Company agrees, subject
to Section 3.1(d), to support the nomination of, and the Company's Nominating
Committee (as defined herein) shall recommend to the Board of Directors the
inclusion in the slate of nominees recommended by the Board of Directors to
shareholders for election as directors at each annual meeting of shareholders of
the Company: (i) no more than two persons who are executive officers of the
Company ("Management Directors"), (ii) (A) five Shareholder Designees, so long
as the Apollo/Blackstone Shareholders beneficially own 80% or more of the
Apollo/Blackstone Shares, (B) four Shareholder Designees, so long as the
Apollo/Blackstone Shareholders beneficially own 60% or more but less than 80% of
the Apollo/Blackstone Shares, (C) three Shareholder Designees, so long as the
Apollo/Blackstone Shareholders beneficially own 40% or more but less than 60% of
the Apollo/Blackstone Shares, (D) two Shareholder Designees, so long as the
Apollo/Blackstone Shareholders beneficially own 20% or more but less than 40% of
the Apollo/Blackstone Shares, and (E) one Shareholder Designee, so long as the
Apollo/Blackstone Shareholders beneficially own 10% or more but less than 20% of
the Apollo/Blackstone Shares (each a "Beneficial Ownership Threshold");
provided, however, that if at any time as a result of the Company's issuance of
Voting Securities the Shareholders beneficially own 9% or less of the Actual
Voting Power (the "Actual Voting Power Threshold"), the Apollo/Blackstone
Shareholders shall be entitled to no more than three Shareholder Designees (even
if the Apollo/Blackstone Shareholders would otherwise be entitled to a greater
number of Shareholder Designees pursuant to clauses (A) through (E) above), and
(iii) such other persons, each of whom is (A) recommended by the Nominating
Committee and (B) not an employee or officer of or outside counsel to the
Company or a partner, employee, director, officer, affiliate or associate (as
defined in Rule 12b-2 under the Exchange Act) of any Shareholder or any
affiliate of a Shareholder or as to which the Shareholders or their affiliates
own at least ten percent of the voting equity securities ("Unaffiliated
Directors"). If any vacancy (whether by death, retirement, disqualification,
removal from office or other cause, or by increase in number of directors)
occurs prior to a meeting of the Company's stockholders, the Board (i) may
appoint a member of management to fill a vacancy caused by a Management Director
ceasing to serve as a director, (ii) shall appoint, subject to Section 3.1(d), a
person designated by the Apollo/Blackstone Shareholders to fill a vacancy
created by a Shareholder Designee ceasing to serve as a director (except as a
result of the reduction of the number of Shareholder Designees entitled to be
included on the Board of Directors by reason of a decrease in the
Apollo/Blackstone Shareholders' beneficial ownership of Apollo/Blackstone Shares
below any Beneficial Ownership Threshold or by reasons of a decrease in the
Shareholders' beneficial ownership of Voting Securities below the Actual Voting
Power Threshold), and (iii) may appoint a person who qualifies as an
Unaffiliated Director and is recommended by the Nominating Committee pursuant to
the procedures set forth in the following paragraph to fill a vacancy created by
an Unaffiliated Director ceasing to serve as a director (provided, however, that
in the case of a vacancy relating to an Unaffiliated Director, if a majority of
the Nominating Committee is unable to recommend a replacement, then the Board
seat with respect to this vacancy shall remain vacant), and each such person
shall be a Management Designee, Shareholder Designee or Unaffiliated Director,
as the case may be, for purposes of this Agreement.
At all times during the Shareholder Designee Period,
Unaffiliated Directors shall be designated exclusively by a majority of a
nominating committee (the "Nominating Committee"), which shall at all times
during the Shareholder Designee Period consist of not more than four persons,
two of whom shall be Shareholder Designees (or such lesser number of Shareholder
Designees as then serves on the Board of Directors) and two of whom shall be
either Management Directors or Unaffiliated Directors. If the Nominating
Committee is unable to recommend one or more persons to serve as Unaffiliated
Directors (except with respect to any vacancy created by an Unaffiliated
Director ceasing to serve as such), then the Board of Directors shall nominate
and recommend for election by stockholders an Unaffiliated Director then serving
on the Board of Directors. Notwithstanding the foregoing, if the
Apollo/Blackstone Shareholders beneficially own less than 50% of the
Apollo/Blackstone Shares, the Nominating Committee shall be comprised of
individuals only one of whom is a Shareholder Designee.
The foregoing provisions shall be effected pursuant to an
amendment to the Company's Bylaws in a form reasonably acceptable to the parties
to this Agreement, which shall not be further amended by the Board of Directors
during the Shareholder Designee Period.
Notwithstanding the foregoing, the Company shall have no
obligation to support the nomination, recommendation or election of any
Shareholder Designee pursuant to this Section 3.1(b) or any other obligation
under this Section 3.1 if the Apollo/Blackstone Shareholders are in breach of
any material provision of this Agreement.
(c) Upon any decrease in Apollo/Blackstone Shareholders'
beneficial ownership of Apollo/Blackstone Shares below any Beneficial Ownership
Threshold or any decrease in the Shareholders beneficial ownership of Voting
Securities below the Actual Voting Power Threshold, the Apollo/Blackstone
Shareholders shall cause a number of Shareholder Designees to offer to
immediately resign from the Company's Board of Directors such that the number of
Shareholder Designees serving on the Board of Directors immediately thereafter
will be equal to the number of Shareholder Designees which the Apollo/Blackstone
Shareholders would then be entitled to designate under Section 3.1(b). Upon
termination of the Shareholder Designee Period, the Apollo/Blackstone
Shareholders shall promptly cause all of the Shareholder Designees to offer to
resign immediately from the Board of Directors and any committees thereof and
the Company's obligations under this Section 3.1 shall terminate.
(d) Notwithstanding the provisions of this Section 3.1, the
Apollo/Blackstone Shareholders shall not be entitled to designate any person to
the Company's Board of Directors (or any committee thereof) in the event that
the Company receives a written opinion of its outside counsel that a Shareholder
Designee would not be qualified under any applicable law, rule or regulation to
serve as a director of the Company or if the Company objects to a Shareholder
Designee because such Shareholder Designee has been involved in any of the
events enumerated in Item 2(d) or (e) of Schedule 13D or such person is
currently the target of an investigation by any governmental authority or agency
relating to felonious criminal activity or is subject to any order, decree, or
judgment of any court or agency prohibiting service as a director of any public
company or providing investment or financial advisory services and, in any such
event, the Apollo/Blackstone Shareholders shall withdraw the designation of such
proposed Shareholder Designee and designate a replacement therefor (which
replacement Shareholder Designee shall also be subject to the requirements of
this Section). The Company shall use its reasonable best efforts to notify the
Apollo/Blackstone Shareholders of any objection to a Shareholder Designee
sufficiently in advance of the date on which proxy materials are mailed by the
Company in connection with such election of directors to enable the
Apollo/Blackstone Shareholders to propose a replacement Shareholder Designee in
accordance with the terms of this Agreement.
(e) Each Shareholder Designee serving on the Board of
Directors shall be entitled to all compensation and stock incentives granted to
directors who are not employees of the Company on the same terms provided to,
and subject to the same limitations applicable to, such directors.
SECTION 3.2. Voting. (a) Each Shareholder agrees that during
the Standstill Period such Shareholder shall, and shall cause its Affiliates and
any Person which is a member of any Group of which such Shareholder or any of
its Affiliates is a member to, be present, in person or represented by proxy, at
all meetings of shareholders of the Company so that all Voting Securities
beneficially owned by such Shareholder shall be counted for the purpose of
determining the presence of a quorum at such meetings. Each Shareholder agrees
that during the Standstill Period:
(i) In connection with the election of directors of
the Company, such Shareholder shall vote or cause to be voted all
Voting Securities beneficially owned by such Shareholder to elect those
individuals nominated in accordance with the provisions of Section 3.1.
(ii) In connection with any proposal for a
Reorganization Transaction, such Shareholder shall vote or cause to be
voted, or consent with respect to, all Voting Securities beneficially
owned by such Shareholder in the manner recommended by a majority of
the entire Board of Directors.
(iii) In connection with other proposals submitted to
shareholders of the Company, such Shareholder shall be free to vote or
cause to be voted, or consent with respect to, all Voting Securities
beneficially owned by such Shareholder in its discretion.
SECTION 3.3. Notices of Dispositions of Voting Securities. Not
later than the tenth day following the end of any calendar month during the
Standstill Period in which one or more Dispositions of Voting Securities by a
Shareholder or any of its Affiliates shall have occurred, such Shareholder shall
use its reasonable best efforts to give written notice to the Company of all
such Dispositions (in the case of Dispositions by Affiliates, to the extent it
has knowledge) unless any such Disposition has been reflected in a public filing
that was delivered to the Company on or in advance of the date upon which notice
thereof under this Section 3.3 would have been due. Such notice shall state the
date upon which each such Disposition was effected, the number and type of
Voting Securities involved in each such Disposition, the means by which each
such Disposition was effected and, to the extent known, the identity of the
Person acquiring Voting Securities.
SECTION 3.4. Access to Information. The Company will provide
each Shareholder during normal business hours with reasonable prior written
notice with (i) access to the books and records of the Company and information
relating to the Company, its properties, operations, financial condition and
affairs ("Information") and (ii) the opportunity to consult with management of
the Company from time to time regarding the Company, its properties, operations,
finances and affairs. Certain of the Shareholders have requested the Information
and consultation rights provided herein to enable the Shares held by such
Shareholders to qualify as a "venture capital investment" as to which such
Shareholders have "management rights," in each case as such terms are defined in
Department of Labor Regulation Section 2510.3-101(d); provided, however, that
nothing herein shall require the Company to furnish such Shareholders with more
than rights of access to Information and consultation provided herein regardless
of whether such rights are sufficient for such Shareholders to comply with
venture capital operating company requirements. In furtherance of the foregoing,
the Company agrees to inform the Shareholders with respect to any corporate
actions which the Company considers to be major or significant, including,
without limitation, extraordinary dividends, mergers, acquisitions or
dispositions of significant assets, issuances of significant amounts of debt or
equity and material amendments to the certificate of incorporation or by-laws of
the Company, and (subject to the limitations specified in the proviso in the
preceding sentence) to provide the Shareholders with the opportunity to consult
with management of the Company with respect to such matters. The Shareholders
agree to hold in strict confidence all nonpublic Information furnished to them
and to use all Information only in connection with the management of their
investment in the Company, except that the Shareholders may disclose any
information that (i) is or becomes generally available to the public other than
as a result of disclosure by the Shareholders, and (ii) is or becomes available
to the Shareholders from a source other than the Company; provided, however,
that, to the knowledge of the Shareholders, the source is not bound by a
confidentiality obligation with the Company in respect thereof. If any
Shareholder is required by a court or administrative agency to disclose any of
the nonpublic Information, the Shareholder shall promptly notify the Company of
such requirement so that the Company may at its own expense oppose such
requirement or seek a protective order and request confidential treatment of
such Information. It is agreed that if the Shareholder is nonetheless compelled
to disclose the Information, the Shareholder may disclose such portion of the
Information which is legally required without liability hereunder. In any event,
the Shareholder will not oppose action by the Company to obtain a protective
order or other reliable assurance that confidential treatment will be accorded
the Information. Nothing herein shall permit any Shareholder to disclose
material non-public Information to permit such Shareholder to purchase or sell
securities of the Company in compliance with the federal securities laws.
ARTICLE 4
Transfer Restrictions
SECTION 4.1. Restrictions on Dispositions. During the
Standstill Period, each Shareholder shall not, and shall cause its Affiliates
not to, directly or indirectly (including, without limitation, through the
disposition or transfer of control of another Person), sell, assign, donate,
transfer, pledge, hypothecate, grant any option with respect to or otherwise
dispose of any interest in (or enter into an agreement or understanding with
respect to the foregoing) any Voting Securities (a "Disposition"), except as set
forth below in this Section 4.1. Without limiting the generality of the
foregoing, any sale of securities held by any Shareholder or any of its
Affiliates which is currently (or following the passage of time, the occurrence
of any event or the giving of notice), directly or indirectly, exchangeable or
exercisable for, or convertible into, any Voting Securities shall constitute a
Disposition of such Voting Securities.
Dispositions may be effected by a Shareholder during the
Standstill Period as follows:
(a) No Dispositions of any nature may be made prior to the first anniversary of
the purchase of the Senior Preferred Stock pursuant to the Preferred Stock
Purchase Agreement, except pursuant to Sections 4.1(b) through 4.1(f).
(b) As of the date of purchase of the shares of Senior
Preferred Stock pursuant to the Preferred Stock Purchase Agreement (the
"Purchase Date"), with respect to the Shares, and after the first anniversary of
the Purchase Date, with respect to all other Voting Securities, Dispositions of
Voting Securities may be made at any time in compliance with the Registration
Rights Agreement.
(c) As of the Purchase Date, with respect to the Shares, and
after the first anniversary of the Purchase Date, with respect to all other
Voting Securities, Dispositions of Voting Securities may be made pursuant to
sales effected in accordance with Rule 144 under the Securities Act (a "Rule 144
Sale"); provided that such Dispositions shall not be made to any Person who or
which would immediately thereafter, to the knowledge of such Shareholder, any of
its Affiliates, or such Shareholder's broker, beneficially own Voting Securities
representing 9% or more of the Total Voting Power (and such Person shall have
provided a certificate to such effect).
(d) As of the Purchase Date, with respect to the Shares, and
after the first anniversary of the Purchase Date, with respect to all other
Voting Securities, Dispositions may be made to any Person (other than pursuant
to a Reorganization Transaction) that would, following such sale, beneficially
own no more than 9% of the Total Voting Power (and such Person shall have
provided a certificate to such effect).
(e) Dispositions may be made pursuant to a merger transaction
or other business combinations or a tender offer for outstanding shares of
Common Stock which is recommended to the shareholders of the Company generally
by at least a majority of the entire Board of Directors, on the terms and
conditions of such transaction available to all other holders of shares of
Common Stock or on terms and conditions recommended by at least a majority of
the entire Board of Directors (excluding the Apollo/Blackstone Designees) as to
the Preferred Stock and Junior Preferred Stock.
(f) Dispositions may be made by a Shareholder to (i) any other
Shareholder or (ii) any Related Person of any Shareholder that executes an
instrument in form and substance satisfactory to the Company in which it makes
the representations and warranties set forth in Section 1.3(b) as of the date of
the execution of such instrument and agrees to be bound by the terms of this
Agreement as if an original signatory to this Agreement (such transferee, a
"Related Transferee"), in which case such Related Transferee shall thereafter be
a "Shareholder" for all purposes of this Agreement.
(g) With respect to Voting Securities which are, by their
terms, convertible into or exercisable or exchangeable for other Voting
Securities such conversion, exercise or exchange shall not be deemed a
Disposition. Without limiting the foregoing, the Company acknowledges that the
conversion of shares of Senior Preferred Stock or shares of Junior Preferred
Stock into Conversion Shares shall not be a Disposition.
(h) Each Shareholder agrees that during the Standstill Period,
without the consent of the managing underwriter(s) in an underwritten offering
in respect of the Company's Voting Securities, it will not effect any sale or
distribution of Voting Securities (other than in connection with such
Shareholder's own registration pursuant to paragraph (b) of this Section 4.1),
including a Rule 144 Sale, during the ten (10) day period prior to, and during
the ninety (90) day period beginning on, the effective date of the registration
statement filed by the Company in respect of such underwritten offering, or any
shorter period as may apply to the Company and its affiliates.
ARTICLE 5
Miscellaneous
SECTION 5.1. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, telex, fax or air courier
guaranteeing delivery:
(a) If to the Company, to:
Allied Waste Industries, Inc.
15880 North Greenway-Hayden Loop, Suite 100
Scottsdale, Arizona 85260
Attn: Steven Helm, Esq.
Fax: (602) 627-2703
with copies to:
Fennemore Craig
3003 North Central Avenue
Phoenix, AZ 85012-2913
Attn: Karen McConnell, Esq.
Fax: (602) 916-5999
and to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attn: Peter Golden
Fax: (212) 859-4000
or to such other person or address as the Company shall furnish to Shareholders
in writing;
(b) If to Shareholders, to:
Apollo Management, L.P.
1999 Avenue of the Stars, Suite 1900
Los Angeles, CA 90067
Attn: David Kaplan
Fax: (310) 201-4198
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Los Angeles, CA 90071-3144
Attn: Michael Woronoff
Fax: (213) 687-5600
and:
The Blackstone Group
345 Park Avenue
New York, NY 10154
Attn: Howard A. Lipson
Fax: (212) 754-8716
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attn: Wilson S. Neely
Fax: (212) 455-2502
and:
Greenwich Street Investment II, L.L.C.
388 Greenwich Street, 36th Floor
New York, New York 10013
Attn: Matthew Kaufman
Fax: (212) 816-0166
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Michael Nissan
Fax: (212) 310-8007
and:
DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, New York 10172
Attn: Ari Benacerraf
Fax: (212) 892-7272
and
Attn: Ivy Dodes
Fax: (212) 892-2689
with a copy to:
DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, New York 10172
Attn: Ivy Dodes
Fax: (212) 892-2689
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Stephen M. Besen
Fax: (212) 310-8007
or to such other person or address as Shareholders shall furnish to the Company
in writing.
All such notices, requests, demands and other communications
shall be deemed to have been duly given: at the time of delivery by hand, if
personally delivered; five (5) Business Days after being deposited in the mail,
postage prepaid, if mailed domestically in the United States (and seven (7)
Business Days if mailed internationally); when answered back, if telexed; when
receipt acknowledged, if telecopied; and on the Business Day for which delivery
is guaranteed, if timely delivered to an air courier guaranteeing such delivery.
SECTION 5.2. Legends. (a) If requested in writing by the
Company, a Shareholder shall present or cause to be presented promptly all
certificates representing Voting Securities beneficially owned by such
Shareholder or any of its Affiliates, for the placement thereon of a legend
substantially to the following effect, which legend will remain thereon so long
as such legend is required under applicable securities laws:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. SUCH SHARES MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH A REGISTRATION THEREUNDER OTHER THAN PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS AND DELIVERY TO
ALLIED WASTE INDUSTRIES, INC. OF AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO IT TO THE EFFECT THAT SUCH TRANSFER
IS EXEMPT FROM REGISTRATION UNDER THOSE LAWS."
(b) Each Shareholder shall present or cause to be presented
promptly all certificates representing Voting Securities beneficially owned by
such Shareholder or any of its Affiliates, for the placement thereon of a legend
substantially to the following effect, which legend will remain thereon during
the Standstill Period as long as such Voting Securities are beneficially owned
by any Shareholder or an Affiliate of any Shareholder:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF A SECOND AMENDED AND RESTATED SHAREHOLDERS
AGREEMENT, DATED AS OF JULY 30, 1999, BETWEEN ALLIED WASTE
INDUSTRIES, INC. ("ALLIED") AND CERTAIN STOCKHOLDERS OF ALLIED
NAMED THEREIN AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN
ACCORDANCE THEREWITH. A COPY OF SAID AGREEMENT IS ON FILE AT
THE OFFICE OF THE CORPORATE SECRETARY OF ALLIED"
(c) The Company may enter a stop transfer order with the
transfer agent or agents of Voting Securities against any Disposition not in
compliance with the provisions of this Agreement.
SECTION 5.3. Enforcement. Shareholders, on the one hand, and
the Company, on the other hand, acknowledge and agree that irreparable injury to
the other party would occur in the event any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached and that such injury would not be adequately compensable in damages. It
is accordingly agreed that, in addition to any other remedies which may be
available at law or in equity, each party hereto (the "Moving Party") shall be
entitled to specific enforcement of, and injunctive relief to prevent any
violation of, the terms of this Agreement, and the other parties hereto will not
take action, directly or indirectly, in opposition to the Moving Party seeking
such relief on the grounds that any other remedy or relief is available at law
or in equity. The parties further agree that no bond shall be required as a
condition to the granting of any such relief.
SECTION 5.4. Entire Agreement. This Agreement constitutes the
entire agreement and understanding of the parties with respect to the
transactions contemplated hereby; provided that the Original Shareholders
Agreement shall remain in full force and effect until the closing of the
purchase and sale of the Senior Preferred Stock pursuant to the Preferred Stock
Purchase Agreement and the representations and warranties of the parties set
forth in Sections 1.2 and 1.3 of the Original Agreement shall survive and shall
be deemed to be not amended or otherwise affected by this Agreement. This
Agreement may be amended only by a written instrument duly executed by the
parties or their respective successors or assigns; provided, however, that any
amendment or waiver by the Company shall be made only with the prior approval of
a majority of the directors of the Company other than Shareholder Designees.
SECTION 5.5. Severability. Whenever possible, each provision
or portion of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law, rule or regulation in any jurisdiction,
such invalidity, illegality or unenforceability will not affect any other
provision or portion of any provision in such jurisdiction, and this Agreement
will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision or portion of any provision shall
have been replaced with a provision which shall, to the maximum extent
permissible under such applicable law, rule or regulation, give effect to the
intention of the parties as expressed in such invalid, illegal or unenforceable
provision.
SECTION 5.6. Headings. Descriptive headings contained in the
Agreement are for convenience only and will not control or affect the meaning or
construction of any provision of this Agreement.
SECTION 5.7. Counterparts. For the convenience of the parties,
any number of counterparts of this Agreement may be executed by the parties, and
each such executed counterpart will be an original instrument.
SECTION 5.8. No Waiver. Any waiver by any party of a breach of
any provision of this Agreement shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other
provision of this Agreement. The failure of a party to insist upon strict
adherence to any term of this Agreement on one or more occasions shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
SECTION 5.9. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Company and Shareholders, and to
their respective successors and assigns other than, in the case of Shareholders,
transferees that are not Related Transferees, including any successors to the
Company or Shareholders or their businesses or assets as the result of any
merger, consolidation, reorganization, transfer of assets or otherwise, and any
subsequent successor thereto, without the execution or filing of any instrument
or the performance of any act; provided that no party may assign this Agreement
without the other party's prior written consent, except by the Shareholders to a
Shareholder or a Related Transferee as expressly provided in this Agreement (and
that nothing herein restricts the transfer of any of the rights of Shareholders
under the Registration Rights Agreement in accordance the terms of the
Registration Rights Agreement).
SECTION 5.10. Governing Law. This Agreement will be governed
by and construed and enforced in accordance with the internal laws of the State
of Delaware, without giving effect to the conflict of laws principles thereof.
SECTION 5.11. Further Assurances. From time to time on and
after the date of this Agreement, the Company and Shareholders, as the case may
be, shall deliver or cause to be delivered to the other party hereto such
further documents and instruments and shall do and cause to be done such further
acts as the other parties hereto shall reasonably request to carry out more
effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure that it is protected in acting hereunder.
SECTION 5.12. Consent to Jurisdiction and Service of Process.
Any legal action or proceeding with respect to this Agreement or any matters
arising out of or in connection with this Agreement, and any action for
enforcement of any judgment in respect thereof shall be brought exclusively in
the state or federal courts located in the State of Delaware, and, by execution
and delivery of this Agreement, the Company and Shareholders each irrevocably
consent to service of process out of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, or by recognized international express carrier
or delivery service, to the Company or Shareholders at their respective
addresses referred to in this Agreement. The Company and Shareholders each
hereby irrevocably waives any objection which it may now or hereafter have to
the laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Agreement brought in the courts referred to above
and hereby further irrevocably waives and agrees, to the extent permitted by
applicable law, not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
Nothing in this Agreement shall affect the right of any party hereto to serve
process in any other manner permitted by law.
SECTION 5.13. Shareholder Action. The Company shall be
entitled to rely upon any written notice, designation, or instruction signed by
Apollo Management IV, L.P. and BCP (the "Representatives") as a notice,
designation or instruction of all Shareholders and the Company shall not be
liable to any Shareholder if the Company acts in accordance with and relies upon
such writing. Notwithstanding the foregoing, however, the Company shall not be
entitled to rely upon any written notice, designation or instruction signed by
the Representatives as a notice, designation or instruction of the DLJ
Shareholders or the Greenwich Street Shareholders if such notice, designation or
instruction states that it relates to the first parenthetical proviso contained
in the first paragraph of Section 2.1(a) or Section 2.1(b), 3.2(a)(iii), 3.4,
4.1(c), 5.4 or 5.9 of this Agreement (the "Specific Rights"). Each of the
Shareholders acknowledges that the Representatives have full power and authority
to act on their behalf; provided, however, that none of the DLJ Shareholders and
the Greenwich Street Shareholders acknowledge the power or authority of the
Representatives to act on their behalf with respect to the Specific Rights.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first referred to above.
ALLIED WASTE INDUSTRIES, INC.
By:___________________________
Name:
Title:
APOLLO INVESTMENT FUND IV, L.P.
APOLLO OVERSEAS PARTNERS IV, L.P.
By: Apollo Advisors IV, L.P.
its General Partner
By: Apollo Capital Management IV, Inc.
its General Partner
By:__________________________
Name:
Title:
APOLLO/AW LLC
By: Apollo Management IV, L.P.
its Manager
By: AIF IV Management, Inc.
its General Partner
By:__________________________
Name:
Title:
APOLLO INVESTMENT FUND III, L.P.
APOLLO OVERSEAS PARTNERS III, L.P.
APOLLO (UK) PARTNERS III, L.P.
By: Apollo Advisors II, L.P.
its General Partner
By: Apollo Capital Management II, Inc.
its General Partner
By:__________________________
Name:
Title:
BLACKSTONE CAPITAL PARTNERS III
MERCHANT BANKING FUND L.P.
BLACKSTONE OFFSHORE CAPITAL PARTNERS III L.P.
BLACKSTONE FAMILY INVESTMENT PARTNERSHIP III L.P.
By: Blackstone Management Associates III L.L.C.
its General Partner
By:__________________________
Name:
Title:
BLACKSTONE CAPITAL PARTNERS II MERCHANT BANKING FUND, L.P.
BLACKSTONE OFFSHORE CAPITAL PARTNERS II, L.P.
BLACKSTONE FAMILY INVESTMENT PARTNERSHIP II, L.P.
By: Blackstone Management Associates II L.L.C.
its General Partner
By:_________________________
Name:
Title:
GREENWICH STREET CAPITAL PARTNERS II, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:_________________________
Name:
Title:
GSCP OFFSHORE FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:_________________________
Name:
Title:
GREENWICH FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:________________________
Name:
Title:
GREENWICH STREET EMPLOYEES FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:_________________________
Name:
Title:
TRV EXECUTIVE FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:_________________________
Name:
Title:
DLJMB FUNDING II, INC.
By:________________________
Name:
Title:
DLJ MERCHANT BANKING PARTNERS II, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:_________________________
Name:
Title:
DLJ MERCHANT BANKING PARTNERS II-A, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:___________________________
Name:
Title:
DLJ DIVERSIFIED PARTNERS, L.P.
By: DLJ Diversified Partners, Inc.
Managing General Partner
By:___________________________
Name:
Title:
DLJ DIVERSIFIED PARTNERS-A, L.P.
By: DLJ Diversified Partners, Inc.
Managing General Partner
By:__________________________
Name:
Title:
DLJ MILLENNIUM PARTNERS, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:__________________________
Name:
Title:
DLJ MILLENNIUM PARTNERS-A, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:___________________________
Name:
Title:
DLJ FIRST ESC L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By:____________________________
Name:
Title:
DLJ OFFSHORE PARTNERS II, C.V.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:___________________________
Name:
Title:
DLJ EAB PARTNERS, L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By:___________________________
Name:
Title:
DLJ ESC II L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By:___________________________
Name:
Title:
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement, dated
as of July 30, 1999 (this "Agreement"), by and between Allied Waste Industries,
Inc., a Delaware corporation (the "Company"), on the one hand, and Apollo
Investment Fund IV, L.P., a Delaware limited partnership, Apollo Investment Fund
III, L.P., a Delaware limited partnership, Apollo Overseas Partners IV, L.P., a
Delaware limited partnership, Apollo Overseas Partners III, L.P., a Delaware
limited partnership, Apollo (U.K.) Partners III, L.P., an English limited
partnership, Apollo/AW LLC, a Delaware limited liability company, Blackstone
Capital Partners II Merchant Banking Fund L.P., a Delaware limited partnership,
Blackstone Capital Partners III Merchant Banking Fund L.P., a Delaware limited
partnership ("BCP"), Blackstone Offshore Capital Partners III L.P., a Cayman
Islands limited partnership, Blackstone Offshore Capital Partners II L.P., a
Cayman Islands limited partnership, Blackstone Family Investment Partnership III
L.P., a Delaware limited partnership, and Blackstone Family Investment
Partnership II L.P., a Delaware limited partnership, Blackstone Capital Partners
III Merchant Banking Fund L.P., a Delaware limited partnership, Greenwich Street
Capital Partners II, L.P., a Delware limited partnership, GSCP Offshore Fund,
L.P., a Cayman Islands exempted limited partnership, Greenwich Fund, L.P., a
Delaware limited partnership, Greenwich Street Employees Fund, L.P., a Delaware
limited partnership, TRV Executive Fund, L.P., a Delaware limited partnership,
DLJMB Funding II, Inc., a Delaware corporation, DLJ Merchant Banking Partners
II, L.P., a Delaware limited partnership, DLJ Merchant Banking Partners II-A,
L.P., a Delaware limited partnership, DLJ Diversified Partners, L.P., a Delaware
limited partnership, DLJ Diversified Partners-A, L.P., a Delaware limited
partnership, DLJ Millenium Partners, L.P., a Delaware limited partnership, DLJ
Millenium Partners-A, L.P., a Delaware limited partnership, DLJ First ESC L.P.,
a Delaware limited partnership, DLJ Offshore Partners II, C.V., a Netherlands
Antilles limited partnership, DLJ EAB Partners, L.P., a Delaware limited
partnership, and DLJ ESC II L.P., a Delaware limited partnership (collectively,
the "Shareholders"), on the other hand, amending and restating in its entirety
the Registration Rights Agreement dated as of April 21, 1997 (the "Original
Agreement"), by and between the Company, on the one hand, and certain of the
Shareholders, on the other hand.
W I T N E S S E T H:
WHEREAS, concurrently herewith, the Company and certain of the
Shareholders are entering into a Preferred Stock Purchase Agreement (the
"Purchase Agreement") pursuant to which, upon the terms and subject to the
conditions set forth in the Purchase Agreement, certain of the Shareholders
shall purchase an aggregate of 1,000,000 shares of Senior Convertible Preferred
Stock, par value $.10 per share, of the Company ("Senior Preferred Stock"),
which shall be convertible into either shares of Series A Junior Preferred
Stock, par value $.10 per share, of the Company ("Junior Preferred Stock"), or
shares of common stock, par value $.01 per share, of the Company (the "Common
Stock");
WHEREAS, concurrently herewith, the Company and Shareholders
are entering into a Second Amended and Restated Shareholders Agreement (the
"Shareholders Agreement"), which shall become effective at the time the shares
of Senior Preferred Stock are purchased by the Shareholders (the "Effective
Time"), granting Shareholders certain rights to designate directors and setting
forth certain restrictions on the acquisition and distribution of securities of
the Company by Shareholders and the conduct of Shareholders with respect to the
Company; and
WHEREAS, as part of establishing the relationship between
Shareholders and the Company, Shareholders and the Company have agreed to enter
into this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained in this Agreement, the Purchase
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows, effective upon
the closing of the purchase of the Senior Preferred Stock pursuant to the
Purchase Agreement:
ARTICLE I
Definitions
1.1. Certain Definitions. In this Agreement:
"Apollo/Blackstone Shareholders" shall have the meaning set
forth in the Shareholders Agreement.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations of the SEC promulgated under
such Act.
"Non-Apollo/Blackstone Shareholders" means all of the
Shareholders other than the Apollo/Blackstone Shareholders.
"Registrable Securities" means the 11,776,765 shares of Common
Stock acquired by certain of the Shareholders from TPG Partners, L.P. and TPG
Parallel I, L.P. (the "TPG Block"), the 14,600,000 shares of Common Stock
acquired by certain of the Shareholders from Laidlaw, Inc. (the "Laidlaw Block"
and, together with the TPG Block, the "Original Shares"), the 1,000,000 shares
of Senior Preferred Stock, any shares of Junior Preferred Stock or Common Stock
issued upon conversion of the Senior Preferred Stock (such shares, the
"Additional Shares", together with the Original Shares and the Senior Preferred
Stock, the "Shares"), and any additional shares of Common Stock acquired by
Shareholders in compliance with the Shareholders Agreement, and any additional
shares of Common Stock, Senior Preferred Stock or Junior Preferred Stock issued
in connection with any stock dividend on, or any stock split, reclassification
or reorganization of any of the Shares or such additional shares; provided,
however, that shares of Junior Preferred Stock shall not be Registrable
Securities at any time on or prior to June 30, 2001.
"SEC" means the United States Securities and Exchange
Commission or any successor agency.
"Securities Act" means the United States Securities Act of
1933, as amended, and the rules and regulations of the SEC promulgated under
such Act.
"Subject Securities" means shares of Senior Preferred Stock,
Junior Preferred Stock, Common Stock or other equity securities of the Company
convertible into or exchangeable for shares of Common Stock.
ARTICLE II
REGISTRATION RIGHTS
2.1. Incidental Rights. If at any time or from time to time
(but subject to the limitations on sales of Registrable Securities in the
Shareholders Agreement) the Company proposes to file with the SEC a registration
statement (whether on Form S-1, S-2, or S-3, or any equivalent form then in
effect) for the registration under the Securities Act of any shares of Subject
Securities for sale, for cash consideration, to the public by Company or on
behalf of one or more shareholders of Company (excluding any sale of securities
upon conversion into or exchange or exercise for shares of Common Stock, and any
shares of Common Stock issuable by Company upon the exercise of employee stock
options, or to any employee stock ownership plan, or in connection with any
acquisition made by Company, any securities exchange offer, dividend
reinvestment plan, employee benefit plan, corporate reorganization, or in
connection with any amalgamation, merger or consolidation of Company or any
direct or indirect subsidiary of Company with one or more other corporations if
Company is the surviving corporation), Company shall give Shareholders at least
20 days' prior written notice of the proposed filing (or if 20 days' notice is
not practicable, a reasonable shorter period to be not less than 7 days), which
notice shall outline the nature of the proposed distribution and the
jurisdictions in the United States in which Company proposes to qualify and
offer such securities (the "Elected Jurisdictions"). On the written request of
Shareholders received by Company within 15 days after the date of Company's
delivery to Shareholders of the notice of intended registration (which request
shall specify the Registrable Securities sought to be disposed of by
Shareholders and the intended method or methods by which dispositions are
intended to be made), Company shall, under the terms and subject to the
conditions of this Article II, at its own expense as provided in Section 4.1,
include in the coverage of such registration statement (or in a separate
registration statement concurrently filed) and qualify for sale under the blue
sky or securities laws of the various states in the Elected Jurisdictions the
number of Registrable Securities of the kind being registered (the "Specified
Securities") held by Shareholders or into which the Registrable Securities are
convertible, as the case may be, and which Shareholders have so requested to be
registered or qualified for distribution, to the extent required to permit the
distribution (in accordance with the intended method or methods thereof as
aforesaid) in the Elected Jurisdictions requested by Shareholders of such
Registrable Securities.
Notwithstanding anything else contained in this Section 2.1,
if the registration statement to be filed by the Company is a registration filed
in response to any of the first three demands made by the Apollo/Blackstone
Shareholders pursuant to Section 2.2 (the "First Three Demands"), then the
Non-Apollo/Blackstone Shareholders shall not be entitled to have their
Registrable Securities included in the coverage of such a registration
statement, provided, however, that if the First Three Demands include Additional
Shares (or shares into which Additional Shares have been converted), then the
Non-Apollo/Blackstone Shareholders shall be entitled to have their Registrable
Securities included in the coverage of such registration statement, on the terms
and conditions set forth in this Section 2.1.
If the distribution proposed to be effected by Company
involves an underwritten offering of the securities being so distributed by or
through one or more underwriters, and if the managing underwriter of such
underwritten offering indicates in writing its reasonable belief that including
all or part of the Specified Securities in the coverage of such registration
statement or in the distribution to be effected by such prospectus will
materially and adversely affect the sale of securities proposed to be sold
(which statement of the managing underwriter shall also state the maximum number
of shares, if any, which can be sold by Shareholders requesting registration
under this Section 2.1 without materially adversely affecting the sale of the
shares proposed to be sold), then the number of Specified Securities which
Shareholders shall have the right to include in such registration statement
shall be reduced to the maximum number of shares specified by the managing
underwriter. In the case of a registration statement filed in response to any of
the First Three Demands covering both Original Shares and Additional Shares (or
shares into which Additional Shares have been converted), first priority shall
be afforded to the Original Shares, with all other securities to be completely
eliminated before the number of such Original Shares is reduced and second
priority shall be given to the other Registrable Securities of both the
Apollo/Blackstone Shareholders and the Non-Apollo/Blackstone Shareholders, with
all other securities to be completely eliminated before the number of such
Registrable Securities is reduced; provided; however, that if the number of
Registrable Securities is to be reduced, then reductions will respect to the
Registrable Securities shall be made among the Shareholders on a pro-rata basis
in accordance with the relationship which the number of the Registrable
Securities held by each Shareholder bears to the number of Registrable
Securities held by all Shareholders (the "Additional Shares Pro-Rata
Reduction").
In all other cases, first priority shall be afforded to
securities covered by a registration statement filed in response to the exercise
of a demand registration right by another holder of Common Stock, Senior
Preferred Stock or Junior Preferred Stock, including the Apollo/Blackstone
Shareholders, and no securities proposed to be sold by such holders shall be so
reduced until all securities proposed to be sold by all other parties have been
entirely eliminated and second priority shall be afforded to the Original
Shares; provided, however, that in the case of a registration statement filed in
response to a demand from the Apollo/Blackstone Shareholders (other than any of
the First Three Demands) (the "Other Demands"), first priority shall be afforded
to the Original Shares, with all other securities to be completely eliminated
before the number of such Original Shares is reduced and second priority shall
be given to the other Registrable Securities of both the Apollo/Blackstone
Shareholders and the Non-Apollo/Blackstone Shareholders, with all other
securities to be completely eliminated before the number of such Registrable
Securities is reduced. As to any reductions to be made to the Registrable
Securities (other than the Original Shares) proposed to be sold by the
Shareholders pursuant to a registration statement filed in response to the Other
Demands, such reductions to be made among the Shareholders shall be made on a
pro-rata basis in accordance with the relationship which the number of
Registrable Securities (other than the Original Shares) held by each Shareholder
bears to the number of Registrable Securities (other than the Original Shares)
held by all Shareholders (the "Pro-Rata Reduction"). As to all other proposed
selling shareholders of Securities, including Shareholders, any such reduction
in the number of Securities proposed to be sold by the selling shareholders
shall be effected on a pro rata basis in accordance with the relationship which
the number of such Securities of the class proposed to be sold by each selling
shareholder bears to the number of such Securities of that class proposed to be
sold by all selling shareholders.
For purposes of calculating the Additional Shares Pro-Rata
Reduction and the Pro-Rata Reduction, each share of Preferred Stock shall be
counted as the number of shares of Common Stock into which such Preferred Share
would be convertible as of the date of determination, assuming Stockholder
Approval (as defined in the Purchase Agreement) , and each share of Junior
Preferred Stock shall be counted as the number of shares of Common Stock that
would have been issued in lieu of such share of Junior Preferred Stock, as of
the date of determination.
Company shall have the sole right to select any underwriters,
including the managing underwriter, of any public offering of securities made
other than as a result of the rights granted in Section 2.2. Nothing in this
Section 2.1 shall create any liability on the part of Company to Shareholders if
Company for any reason decides not to file or to delay or withdraw a
registration statement (which Company may do in its sole discretion).
Shareholders may request to have Registrable Securities
included in an unlimited number of registrations under this Section 2.1.
2.2. Demand Rights. Upon written request of the
Apollo/Blackstone Shareholders made at any time (but subject to the limitations
on sales of Registrable Securities in the Shareholders Agreement), the Company
shall, under the terms and subject to the conditions set forth in this Section
2.2, and Sections 2.3 and 2.4, file (and use its reasonable efforts to cause to
become effective) a registration statement covering, and use its reasonable
efforts to qualify for sale under the blue sky or securities laws of the various
states of the United States as may be requested by the Apollo/Blackstone
Shareholders (except any such state in which, in the opinion of the managing
underwriter of the offering, the failure to so qualify would not materially and
adversely affect the proposed offering), in accordance with the intended method
or methods of disposition set forth in that notice, of such number of
Registrable Securities, as may be designated by the Apollo/Blackstone
Shareholders in their request, or that portion thereof designated in said
request for registration in each of the Designated Jurisdictions (as defined
below). A request for registration under this Section 2.2 shall specify the
number of shares to be registered, the jurisdictions in the United States in
which such registration is to be effected (the "Designated Jurisdictions") and
the proposed manner of sale, including the name and address of any proposed
underwriter; provided, that all offerings contemplated by a request for
registration under this Section 2.2 shall be underwritten offerings involving a
distribution of Registrable Shares to the public in which reasonable efforts are
made not to knowingly sell to any single buyer, acting individually or with
others, who after such underwriting will own more than 9% of the Total Voting
Power (as defined in the Shareholders Agreement) (any such buyer, "Significant
Stockholder"), under circumstances in which it would reasonably be expected to
not result in any person becoming a Significant Stockholder. The principal
underwriter or underwriters for any such offering shall be selected by the
Apollo/Blackstone Shareholders, subject to Company's approval, which may not be
unreasonably withheld. Notwithstanding any other provision in this Section, the
Apollo/Blackstone Shareholders shall not be permitted to make a demand for
registration pursuant to this Section unless the number of Registrable
Securities covered by such demand is at least 2,500,000 shares of Common Stock
(or securities convertible into such number of shares of Common Stock) (as such
number may be appropriately adjusted to reflect stock splits, reverse stock
splits, dividends and any other recapitalization or reorganization of Company)
or such lesser number of shares as would yield gross proceeds of not less than
$50 million based on the average closing price of the Common Stock (and assuming
that the market price of shares of Junior Preferred Stock was equal to the
market price of the shares of Common Stock into which such shares would then be
convertible) over the ten trading day period immediately preceding the date of
the written request hereunder (with the gross proceeds of Senior Preferred Stock
deemed to be its liquidation preference on the date of such demand). No
Shareholders other than the Apollo/Blackstone Shareholders and their Related
Transferees shall have demand registration rights.
If the distribution proposed to be effected pursuant to this
Section 2.2 involves an underwritten offering of Registrable Securities and
securities of the Company other than Registrable Securities ("Other
Securities"), and if the managing underwriter of such underwritten offering
indicates in writing its reasonable belief that including all or part of such
securities in the coverage of such registration statement will materially and
adversely affect the sale of the securities proposed to be sold, then the number
of securities proposed to be sold shall be reduced to the maximum number of
securities specified by the managing underwriter. In such a case, first priority
shall be afforded to Registrable Securities in accordance with the third and
fourth paragraph of Section 2.1, and such Other Securities, subject to the
limitations set forth in such third and fourth paragraphs.
Company may delay the filing of any registration statement
requested under this Section 2.2, or delay its effectiveness, for a reasonable
period (but not longer than 90 days) if, in the sole judgment of Company's Board
of Directors, (i) a delay is necessary in light of pending financing
transactions, corporate reorganizations, or other major events involving
Company, or (ii) filing at the time requested would materially and adversely
affect the business or prospects of Company in view of disclosures that may be
thereby required. Once the cause of the delay is eliminated, Company shall
promptly notify the Apollo/Blackstone Shareholders and, promptly after
Shareholders notify Company to proceed, Company shall file a registration
statement and begin performance of its other obligations under this Section 2.2.
The Apollo/Blackstone Shareholders shall be entitled to
request not more than nine registrations under this Section 2.2 (provided that
the filing of a registration statement in more than one Designated Jurisdiction
in connection with a concurrent or substantially concurrent distribution shall
be deemed for the purposes of this Agreement to be a single registration).
However, if the Apollo/Blackstone Shareholders request a registration under this
Section 2.2, but no registration statement becomes effective with respect to the
Registrable Securities covered by such request, then such request shall not
count as a request for purposes of determining the number of requests for
registration the Apollo/Blackstone Shareholders may make under this Section 2.2.
If there is an effective registration statement requested by
the Apollo/Blackstone Shareholders pursuant to this Section 2.2, the
Apollo/Blackstone Shareholders may require the Company to delay the filing of
any registration statement relating to shares of Common Stock or delay its
effectiveness, for a reasonable period (but not longer than 90 days) if, in the
sole judgment of the Apollo/Blackstone Shareholders, a delay is necessary in
order to avoid materially and adversely affecting the disposition of Registrable
Securities pursuant to the offering by the Shareholders; provided that the
foregoing shall not limit the Company's right to file and have declared
effective registration statements relating to shares of Common Stock issuable
pursuant to employee benefit plans of the Company or any of its subsidiaries or
issuable pursuant to a merger, acquisition or similar transaction involving the
Company or any of its subsidiaries.
2.3. Registration Conditions. Notwithstanding any other
provision of this Agreement, Company shall not be required to effect a
registration of any securities under this Article II, or file any post-effective
amendment to such a registration statement relating to such a qualification:
(a) unless Shareholders agree to (x) sell and distribute a portion or all
of their Registrable Securities in accordance with the plan or plans of
distribution adopted by and through underwriters, if any, acting for
Company or any such other sellers of Common Stock, Senior Preferred
Stock or Junior Preferred Stock, and (y) bear a pro rata share of
underwriter's discounts and commissions;
(b) if a registration requested under Section 2.2, or any post-effective
amendment to the registration statement filed in connection
therewith, requires, under applicable statutes and rules, a special
audit (other than a normal fiscal year-end audit) of any financial
statements, unless Shareholders agree to pay their proportionate share
(determined by the number of shares to be sold by Shareholders in the
offering in proportion to the total number of shares to be sold by
Company and all other participants in such offering) of the
reasonable fees and expenses of accountants incurred in connection
with the special audit and which would otherwise not be incurred;
provided that Shareholders shall not be required to pay any share of
such fees and expenses if such audit would otherwise be required at
substantially the same time to satisfy the Company's reporting
requirements under the Exchange Act absent such registration;
(c) if, in the case of a request for registration under Section 2.2,(x)any
offering pursuant to a registration statement covering securities of
the same kind otherwise sought to be registered regarding which
Shareholders could have exercised registration rights under Section 2.1
of this Agreement has been completed within the prior 90 days, (y) a
registration statement requested by Shareholders pursuant to Section
2.2 has become effective under the Securities Act within the prior six
months, or (z) Company has given notice under Section 2.1 of its
intention to file a registration statement under the Securities Act and
has not completed or abandoned the proposed offering (for so long as
the Company continues in good faith to pursue the proposed offering);
and
(d) unless Company has received from Shareholders all information Company
has reasonably requested concerning Shareholders and their method of
distribution of Registrable Securities, so as to enable Company to
include in the registration statement all facts required to be
disclosed in it.
2.4. Covenants and Procedures. If Company becomes obligated
under this Article II to effect a registration of Registrable Securities on
behalf of Shareholders, then (as applicable to the jurisdictions for which such
registration is to be made):
(a) Company, at its expense as provided in Section 4.2, shall prepare and
file with the SEC a registration statement covering such securities and
such other related documents as may be necessary or appropriate
relating to the proposed distribution, and shall use reasonable efforts
to cause the registration statement to become effective. Company will
also, with respect to any registration statement, file such post-
effective amendments to the registration statement (and use reasonable
efforts to cause them to become effective) and such supplements as are
necessary so that current prospectuses are at all times available for
a period of at least 90 days after the effective date of the
registration statement or for such longer period, not to exceed 180
days, as may be required under the plan or plans of distribution set
forth in the registration statement. Shareholders shall promptly
provide Company with such information with respect to Shareholders'
Registrable Securities to be so registered and, if applicable, the
proposed terms of their offering, as is required for the registration.
If the Registrable Securities to be covered by the registration
statement are not to be sold to or through underwriters acting for
Company, Company shall:
(i) deliver to Shareholders, as promptly as
practicable, as many copies of preliminary prospectuses as
Shareholders may reasonably request (in which case
Shareholders shall keep a written record of the distribution
of the preliminary prospectuses and shall refrain from
delivery of the preliminary prospectuses in any manner or
under any circumstances which would violate the Securities Act
or the securities laws of any other jurisdiction, including
the various states of the United States);
(ii) deliver to Shareholders, as soon as
practicable after the effective date of the registration
statement, and from time to time thereafter during the
applicable period described in Section 2.4, as many copies of
the relevant prospectuses as Shareholders may reasonably
request; and
(iii) in case of the happening, after the
effective date of the registration statement and during the
applicable 90 or 180-day period described in the second
sentence of Section 2.4(a), of any event or occurrence as a
result of which the prospectus, as then in effect, would
include an untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make any statement therein not misleading in the
light of the circumstances in which it was made, give
Shareholders written notice of the event or occurrence and
prepare and furnish to Shareholders, in such quantities as it
may reasonably request, copies of an amendment of or a
supplement to such prospectus as may be necessary so that the
prospectus, as so amended or supplemented and thereafter
delivered to purchasers of the securities, will not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which it was made, not misleading.
(b) Company will notify Shareholders of any action by
the SEC or any Commission to suspend the effectiveness of any
registration statement filed pursuant hereto or the initiation or
threatened initiation of any proceeding for such purpose or the receipt
by Company of any notification with respect to the suspension of the
qualification of the securities for sale in any jurisdiction.
Immediately upon receipt of any such notice, Shareholders shall cease
to offer or sell any Registrable Securities pursuant to the
registration statement or prospectus in the jurisdiction to which such
order or suspension relates. Company will also notify Shareholders
promptly of the occurrence of any event or the existence of any state
of facts that, in the judgment of Company, should be set forth in such
registration statement or prospectus. Immediately upon receipt of such
notice, Shareholders shall cease to offer or sell any Registrable
Securities pursuant to such registration statement or prospectus, cease
to deliver or use such registration statement or prospectus and, if so
requested by Company, return to Company at Company's expense all copies
of such registration statement or prospectus. Company will as promptly
as practicable take such action as may be necessary to amend or
supplement such registration statement or prospectus in order to set
forth or reflect such event or state of facts and provide copies of
such proposed amendment or supplement to Shareholders.
(c) On or before the date on which the registration
statement is declared effective, Company shall use its reasonable
efforts to:
(i) register or qualify (and cooperate with
Shareholders, the underwriter or underwriters, if any, and
their counsel, in connection with the registration or
qualification of) the securities covered by the registration
statement for offer and sale under the securities or blue sky
laws of each state and other jurisdiction as Shareholders or
any underwriter reasonably requests;
(ii) keep each such registration or
qualification effective, including through new filings, or
amendments or renewals, during the period the registration
statement or prospectus is required to be kept effective; and
(iii) do any and all other acts or things
necessary or advisable to enable the disposition in all such
jurisdictions of the Registrable Securities covered by the
applicable registration statement, provided that Company will
not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified.
(d) Company shall use its reasonable efforts to cause
all Registrable Securities of Shareholders included in the registration
statement to be listed, by the date of the first sale of such shares
pursuant to such registration statement, on each securities exchange on
which the securities are then listed or proposed to be listed, if any,
as directed by the Apollo/Blackstone Shareholders (subject to the
Company's consent, which consent shall not be unreasonably withheld).
(e) Company shall make generally available to
Shareholders and any underwriter participating in the offering
conducted pursuant to the registration statement an earnings statement
satisfying Section 11(a) of the Securities Act no later than 45 days
after the end of the 12-month period beginning with the first day of
Company's first fiscal quarter commencing after the effective date of
the registration statement. The earnings statement shall cover such
12-month period. This requirement will be deemed to be satisfied if
Company timely files complete and accurate information on Forms 10-Q,
10-K, and 8-K under the Exchange Act, and otherwise complies with Rule
158 under the Securities Act as soon as feasible.
(f) Company shall cooperate with Shareholders and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive
legends) representing Registrable Securities to be sold under the
registration statement, and to enable such securities to be in such
denominations and registered in such names as the managing underwriter
or underwriters, if any, or Shareholders, may request, subject to the
underwriters' obligation to return any certificates representing unsold
securities.
(g) Company shall use its reasonable efforts to cause
Registrable Securities covered by the registration statement to be
registered with or approved by such other governmental agencies or
authorities in the United States (including the registration of
Registrable Securities under the Exchange Act) as may be necessary to
enable Shareholders or the underwriter or underwriters, if any, to
consummate the disposition of such securities.
(h) Company shall, during normal business hours and
upon reasonable notice, make available for inspection by Shareholders,
any underwriter participating in any offering pursuant to the
registration statement, and any attorney, accountant or other agent
retained by Shareholders or any such underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents, and properties of Company (including non-public
information), as shall be reasonably necessary to enable the Inspectors
to exercise their due diligence responsibilities; provided that any
Inspector receiving non-public information shall have previously
entered into an appropriate confidentiality agreement in mutually
satisfactory form and substance. Company shall also cause its officers,
directors, and employees to supply all nonconfidential information
reasonably requested by any Inspector in connection with the
registration statement.
(i) Company shall use its reasonable efforts to
obtain a "cold comfort" letter and, as applicable, a "long-form comfort
letter" from Company's independent public accountants, and an opinion
of counsel for Company, each in customary form and covering such
matters of the type customarily covered by cold comfort letters and
long form comfort letters and legal opinions in connection with public
offerings of securities, as Shareholders reasonably request.
(j) Company shall enter into such customary
agreements (including an underwriting agreement containing such
representations and warranties by Company and such other terms and
provisions, as are customarily contained in underwriting agreements for
comparable offerings and are reasonably satisfactory to the Company)
and take all such other actions as Shareholders or the underwriters
participating in such offering and sale may reasonably request in order
to expedite or facilitate such offering and sale (other than such
actions which are disruptive to the Company or require significant
management availability), including providing reasonable availability
of appropriate members of senior management of the Company to provide
customary due diligence assistance in connection with any offering and
to participate in customary "road show" presentations in connection
with any underwritten offerings in substantially the same manner as
they would in an underwritten primary registered public offering by the
Company of its Common Stock, after taking into account the reasonable
business requirements of the Company in determining the scheduling and
duration of any road show.
ARTICLE III
INDEMNIFICATION
3.1. Indemnification by Company. In the event of any
registration under the Securities Act by any registration statement pursuant to
rights granted in this Agreement of Registrable Securities held by Shareholders,
Company will hold harmless Shareholders and each underwriter of such securities
and each other person, if any, who controls any Shareholder or such underwriter
within the meaning of the Securities Act, against any losses, claims, damages,
or liabilities (including legal fees and costs of court), joint or several, to
which Shareholders or such underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages,
or liabilities (or any actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact (i)
contained, on its effective date, in any registration statement under which such
securities were registered under the Securities Act or any amendment or
supplement to any of the foregoing, or which arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or (ii)
contained in any preliminary prospectus, if used prior to the effective date of
such registration statement, or in the final prospectus (as amended or
supplemented if Company shall have filed with the SEC any amendment or
supplement to the final prospectus) if used within the period which Company is
required to keep the registration to which such registration statement or
prospectus relates current under Section 2.4, or which arise out of or are based
upon the omission or alleged omission (if so used) to state a material fact
required to be stated in such prospectus or necessary to make the statements in
such prospectus not misleading; and will reimburse Shareholders and each such
underwriter and each such controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, or liability; provided, however, that Company shall
not be liable to any Shareholder or its underwriters or controlling persons 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 such
amendment or supplement, in reliance upon and in conformity with information
furnished to Company through a written instrument duly executed by Shareholders
or such underwriter specifically for use in the preparation thereof.
3.2. Indemnification by Shareholders. It shall be a condition
precedent to the obligation of Company to include in any registration statement
any Registrable Securities of Shareholders that Company shall have received from
Shareholders an undertaking, reasonably satisfactory to Company and its counsel,
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 3.1) Company, each director of Company, each officer of Company
who shall sign the registration statement, and any person who controls Company
within the meaning of the Securities Act, (i) with respect to any statement or
omission from such registration statement, or any amendment or supplement to it,
if such statement or omission was made in reliance upon and in conformity with
information furnished to Company through a written instrument duly executed by
Shareholders specifically for use in the preparation of such registration
statement or amendment or supplement, and (ii) with respect to compliance by
Shareholders with applicable laws in effecting the sale or other disposition of
the securities covered by such registration statement.
3.3 Indemnification Procedures. Promptly after receipt by an
indemnified party of notice of the commencement of any action involving a claim
referred to in the preceding Sections of this Article III, the indemnified party
will, if a resulting claim is to be made or may be made against and indemnifying
party, give written notice to the indemnifying party of the commencement of the
action. If any such action is brought against an indemnified party, the
indemnifying party will be entitled to participate in and to assume the defense
of the action with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election to assume defense of the action, the indemnifying party will not be
liable to such indemnified party for any legal or other expenses incurred by the
latter in connection with the action's defense. An indemnified party shall have
the right to employ separate counsel in any action or proceeding and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
such indemnified party's expense unless (a) the employment of such counsel has
been specifically authorized in writing by the indemnifying party, which
authorization shall not be unreasonably withheld, (ii) the indemnifying party
has not assumed the defense and employed counsel reasonably satisfactory to the
indemnified party within 30 days after notice of any such action or proceeding,
or (iii) the named parties to any such action or proceeding (including any
impleaded parties) include the indemnified party and the indemnifying party and
the indemnified party shall have been advised by such counsel that there may be
one or more legal defenses available to the indemnified party that are different
from or additional to those available to the indemnifying party (in which case
the indemnifying party shall not have the right to assume the defense of such
action or proceeding on behalf of the indemnified party), it being understood,
however, that the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to all local counsel which is necessary, in the good
faith opinion of both counsel for the indemnifying party and counsel for the
indemnified party in order to adequately represent the indemnified parties) for
the indemnified party and that all such fees and expenses shall be reimbursed as
they are incurred upon written request and presentation of invoices. Whether or
not a defense is assumed by the indemnifying party, the indemnifying party will
not be subject to any liability for any settlement made without its consent. No
indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term the giving by the
claimant or plaintiff, to the indemnified party, of a release from all liability
in respect of such claim or litigation.
3.4. Contribution. If the indemnification required by this
Article III from the indemnifying party is unavailable to or insufficient to
hold harmless an indemnified party in respect of any indemnifiable losses,
claims, damages, liabilities, or expenses, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
such losses, claims, damages, liabilities, or expenses in such proportion as is
appropriate to reflect (i) the relative benefit of the indemnifying and
indemnified parties and (ii) if the allocation in clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect the relative
benefit referred to in clause (i) and also the relative fault of the indemnified
and indemnifying parties, in connection with the actions which resulted in such
losses, claims, damages, liabilities, or expenses, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and the
indemnified party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact, has been made by, or relates to information supplied by,
such indemnifying party or parties, and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such action. The
amount paid or payable by a party as a result of the losses, claims, damage,
liabilities, and expenses referred to above shall be deemed to include any legal
or other fees or expenses reasonably incurred by such party in connection with
any investigation or proceeding. Company and Shareholders agree that it would
not be just and equitable if contribution pursuant to this Section 3.4 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the prior
provisions of this Section 3.4.
Notwithstanding the provisions of this Section 3.4, no
indemnifying party shall be required to contribute any amount in excess of the
amount by which the total price at which the securities were offered to the
public by the indemnifying party exceeds the amount of any damages which the
indemnifying party has otherwise been required to pay by reason of an untrue
statement or 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 a fraudulent
misrepresentation.
ARTICLE IV
OTHER AGREEMENTS
4.1. Other Registration Rights. Company agrees that it will
not grant to any party registration rights which would allow such party to limit
Shareholders' priority for the sale or distribution of Registrable Securities
upon the exercise of a demand registration right pursuant to Section 2.2.
4.2. Expenses. All expenses incurred by Company in connection
with any registration statement covering Registrable Securities offered by
Shareholders, including, without limitation, all registration and filing fees
(including all expenses incident to filing with the National Association of
Securities Dealers, Inc.), printing expenses, fees and disbursements of counsel
(except for the fees and disbursements of counsel for Shareholders) and of the
independent certified public accountants (except, in the case of any special
audits, if required in connection with any such registration, Shareholders'
proportionate share of their expense as provided in Section 2.4), and the
expense of qualifying such shares under state blue sky laws, shall be borne by
Company, including such expenses of any registration delayed by the Company
under the fourth paragraph of Section 2.2; provided, however, that Company shall
not be required to pay for any expenses of any registration proceeding begun
pursuant to Section 2.2 if the registration request is subsequently withdrawn at
the request of the Apollo/Blackstone Shareholders (in which case the
Apollo/Blackstone Shareholders shall bear such expenses, each such Shareholder
to bear its pro rata share of the expense based on the number of Registrable
Securities such Apollo/Blackstone Shareholder intended to include in such
registration compared to the total number of Registrable Securities all of such
Apollo/Blackstone Shareholders intended to include in such registration), unless
the Apollo/Blackstone Shareholders agree to forfeit their right to one demand
registration under Section 2.2; provided further, however, that if at the time
of such withdrawal, the Apollo/Blackstone Shareholders have learned of a
material adverse change in the condition, business, or prospects of the Company
from that known at the time of its request, then the Apollo/Blackstone
Shareholders shall not be required to pay any of such expenses and shall retain
their rights pursuant to Section 2.2. Company's obligations under this Section
4.2 shall apply to each registration under the Securities Act or state blue sky
legislation pursuant to Section 2.2. However, all underwriting expenses incurred
by Shareholders, including underwriter's discounts and commissions and legal,
accounting and similar expenses, shall be borne by Shareholders.
4.3. Dispositions During Registration. Each Shareholder agrees
that, without the consent of the managing underwriter(s) in an underwritten
offering in respect of Common Stock or other Subject Securities, it will not
effect any sale or distribution of Common Stock or other Subject Securities
(other than Registrable Securities included in such offering), during the ten
(10) day period prior to, and during the ninety (90) day period beginning on,
the effective date of the registration statement filed by the Company in respect
of such underwritten offering, or any shorter period as may apply to the Company
and its affiliates.
4.4. Transfer of Rights. All rights of Shareholders under this
Agreement shall be transferable by Shareholders to a Related Transferee (as
defined in the Shareholders Agreement) who acquires Registrable Securities in
compliance with Section 4.1(f) of the Shareholders Agreement and who executes an
instrument in form and substance satisfactory to the Company in which it agrees
to be bound by the terms of this Agreement as if an original signatory hereto,
in which case such Related Transferee shall thereafter be a "Shareholder" for
all purposes of this Agreement. The incidental registration rights or benefits
of this Agreement and the demand registration rights, including indemnification
by Company, shall be transferable by Shareholders only in a transaction
permitted under Section 4.1(c) or 4.1(d) of the Shareholders Agreement to a
transferee that is not an Affiliate of the Company who receives at least an
aggregate of 1,000,000 shares of Common Stock, in the case of incidental
registration rights, or 2,500,000 shares of Common Stock (or securities
convertible into such number of shares of Common Stock) or such lesser number of
shares as would yield gross proceeds of not less than $50 million (as calculated
in accordance with the first paragraph of Section 2.2) for each right to demand
registration, in the case of demand registration rights. In the case of any
assignment, the party or parties who have the rights and benefits of
Shareholders under this Agreement shall become parties to and be subject to this
Agreement, and shall not, as a group, have the right to request any greater
number of registrations than Shareholders would have had if no assignment had
occurred. Upon any transfer of the registration rights or benefits of this
Agreement, Shareholders shall give Company written notice prior to or promptly
following such transfer stating the name and address of the transferee and
identifying the securities with respect to which such rights are being assigned.
Such notice shall include or be accompanied by a written undertaking by the
transferee to comply with the obligations imposed hereunder. In the event any
registration rights are transferred in accordance with the terms of this
Agreement, any actions required to be taken by Shareholders will be taken with
the approval of the holders of such registration rights who hold a majority of
the Registrable Securities, whose actions shall bind all such holders of such
registration rights provided that, any actions required to be taken by the
Apollo/Blackstone Shareholders will be taken with the approval of the holders of
such registration rights who hold a majority of the Registrable Securities
originally held by the Apollo/Blackstone Shareholders or in such other manner as
the Apollo/Blackstone Shareholders shall agree, whose actions shall bind all
holders (including all non-Apollo/Blackstone Shareholders) of such registration
rights..
4.5. Best Registration Rights. If the Company grants to any
Person with respect to any security issued by the Company or any of its
Affiliates registration rights that provide for terms that are in any manner
more favorable to the holder of such registration rights than the terms granted
to the Shareholders other than the number of demand registrations or the minimum
amount of shares required to exercise demand registration rights (or if the
Company amends or waives any provision of any agreement providing registration
rights of others or takes any other action whatsoever to provide for terms that
are more favorable to other holders than the terms provided to the Shareholders
other than the number of demand registrations or the minimum amount of shares
required to exercise demand registration rights), then this Agreement shall
immediately be deemed amended to provide the Shareholders with any (or all) of
such more favorable terms as Shareholders shall elect to include herein. The
Company shall promptly give notice to the Shareholders of the granting of any
such registration rights to another Person.
ARTICLE V
MISCELLANEOUS
5.1. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, telex, fax or air courier
guaranteeing delivery:
(a) If to the Company, to:
Allied Waste Industries, Inc.
15880 North Greenway-Hayden Loop, Suite 100
Scottsdale, Arizona 85260
Attn: Steven Helm, Esq.
Fax: (602) 627-2703
with copies to:
Fennemore Craig
3003 North Central Avenue
Phoenix, AZ 85012-2913
Attn: Karen C. McConnell, Esq.
Fax: (602) 916-5999
and to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attn: Peter Golden
Fax: (212) 859-4000
or to such other person or address as the Company shall furnish to Shareholders
in writing;
(b) If to Shareholders, to:
Apollo Management, L.P.
1999 Avenue of the Stars, Suite 1900
Los Angeles, CA 90067
Attn: David Kaplan
Fax: (310) 201-4198
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Los Angeles, CA 90017-3144
Attn: Michael Woronoff
Fax: (213) 687-5600
and:
The Blackstone Group
345 Park Avenue
New York, NY 10154
Attn: Howard A. Lipson
Fax: (212) 754-8716
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attn: Wilson S. Neely
Fax: (212) 455-2502
and:
Greenwich Street Investments II, L.L.C.
388 Greenwich Street, 36th Floor
New York, New York 10013
Attn: Matthew Kaufman
Fax: (212) 816-0166
with a copy to:
Weil Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Michael Nissan
Fax: (212) 310-8007
and:
DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, New York 10172
Attn: Ari Benacerraf
Fax: (212) 892-7272
and
Attn: Ivy Dodes
Fax: (212) 892-2689
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Stephen M. Besen
Fax: (212) 310-8007
or to such other person or address as Shareholders shall furnish to the Company
in writing.
All such notices, requests, demands and other communications
shall be deemed to have been duly given: at the time of delivery by hand, if
personally delivered; five (5) Business Days after being deposited in the mail,
postage prepaid, if mailed domestically in the United States (and seven (7)
Business Days if mailed internationally); when answered back, if telexed; when
receipt acknowledged, if telecopied; and on the Business Day for which delivery
is guaranteed, if timely delivered to an air courier guaranteeing such delivery.
5.2. Section Headings. The article and section headings in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement. References in this Agreement to a
designated "Article" or "Section" refer to an Article or Section of this
Agreement unless otherwise specifically indicated.
5.3. Governing Law. This Agreement shall be construed and
enforced in accordance with and governed by the law of Delaware, without regard
to its conflicts of laws principles.
5.4. Consent to Jurisdiction and Service of Process. Any legal
action or proceeding with respect to this Agreement or any matters arising out
of or in connection with this Agreement (other than the Shareholders Agreement,
which shall be governed solely by the analogous provisions thereof), and any
action for enforcement of any judgment in respect thereof shall be brought
exclusively in the state of federal courts located in the State of Delaware,
and, by execution and delivery of this Agreement, the Company and Shareholders
each irrevocably consent to service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, or by recognized international
express carrier or delivery service, to the Company or Shareholders at their
respective addresses referred to in this Agreement. The Company and the
Shareholders each hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement (other than the
Shareholders Agreement, which shall be governed solely by the analogous
provisions thereof) brought in the courts referred to above and hereby further
irrevocably waives and agrees, to the extent permitted by applicable law, not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing in this
Agreement shall affect the right of any party hereto to serve process in any
other manner permitted by law.
5.5. Amendments. This Agreement may be amended only by an
instrument in writing executed by all of its parties.
5.6. Entire Agreement. This Agreement and the Shareholders
Agreement constitute the entire agreement and understanding of the parties with
respect to the transactions contemplated hereby and thereby. The registration
rights granted under this Agreement supersede any registration, qualification or
similar rights with respect to any of the Shares granted under any other
agreement, and any of such preexisting registration rights are hereby
terminated. This Agreement may be amended only by a written instrument duly
executed by the parties or their respective successors or assigns; provided,
however, that any amendment or waiver by the Company shall be made only with the
prior approval of a majority of the entire Board of Directors of the Company
other than Shareholder Designees (as defined in the Shareholders Agreement).
5.7. Severability. The invalidity or unenforceability of any
specific provision of this Agreement shall not invalidate or render
unenforceable any of its other provisions. Any provision of this Agreement held
invalid or unenforceable shall be deemed reformed, if practicable, to the extent
necessary to render it valid and enforceable and to the extent permitted by law
and consistent with the intent of the parties to this Agreement.
5.8. Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute the same instrument.
5.9. Shareholder Action. The Company shall be entitled to rely
upon any written notice, designation, or instruction signed by Apollo Capital
Management IV, L.P. or Apollo Capital Management II, Inc, as the case may be,
and BCP (the "Representatives") as a notice, designation or instruction of all
Shareholders and the Company shall not be liable to any Shareholder if the
Company acts in accordance with and relies upon such writing; provided, however,
that any such notice, designation or instruction shall not (in the sole good
faith determination of the Company) have a disproportionate effect upon any of
the Shareholders. Notwithstanding the foregoing, however, the Company shall not
be entitled to rely upon any notice, designation or instruction signed by the
Representatives as a notice, designation or instruction of the DLJ Shareholder,
the Greenwich Street Stockholder if such notice, designation or instruction
relates to Section 2.1, 4.4 or 5.5 of this Agreement (the "Specific Rights"). In
that regard, each of the Shareholders acknowledges that the Representatives have
full power and authority to act on their behalf provided, however, that none of
the DLJ Shareholders and the Greenwich Street Stockholders acknowledge the power
or authority of the Representatives to act on their behalf with respect to the
Specific Rights.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
ALLIED WASTE INDUSTRIES, INC.
By:___________________________
Name:
Title:
APOLLO INVESTMENT FUND IV, L.P.
APOLLO OVERSEAS PARTNERS IV, L.P.
By: Apollo Advisors IV, L.P.
its General Partner
By: Apollo Capital Management IV, Inc.
its General Partner
By:__________________________
Name:
Title:
APOLLO/AW LLC
By: Apollo Management IV, L.P.
its Manager
By: AIF IV Management, Inc.
its General Partner
By:__________________________
Name:
Title:
APOLLO INVESTMENT FUND III, L.P.
APOLLO OVERSEAS PARTNERS III, L.P.
APOLLO (UK) PARTNERS III, L.P.
By: Apollo Advisors II, L.P.
its General Partner
By: Apollo Capital Management II, Inc.
its General Partner
By:__________________________
Name:
Title:
BLACKSTONE CAPITAL PARTNERS III
MERCHANT BANKING FUND L.P.
BLACKSTONE OFFSHORE CAPITAL PARTNERS III L.P.
BLACKSTONE FAMILY INVESTMENT PARTNERSHIP III L.P.
BY: Blackstone Management Associates III L.L.C.
its General Partner
By:__________________________
Name:
Title:
BLACKSTONE CAPITAL PARTNERS II MERCHANT
BANKING FUND, L.P.
BLACKSTONE OFFSHORE CAPITAL PARTNERS II, L.P.
BLACKSTONE FAMILY INVESTMENT PARTNERSHIP II, L.P.
By: Blackstone Management Associates II L.L.C.
its General Partner
By:_________________________
Name:
Title:
GREENWICH STREET CAPITAL PARTNERS II, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:_________________________
Name:
Title:
GSCP OFFSHORE FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:_________________________
Name:
Title:
GREENWICH FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:________________________
Name:
Title:
GREENWICH STREET EMPLOYEES FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:_________________________
Name:
Title:
TRV EXECUTIVE FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:_________________________
Name:
Title:
DLJMB FUNDING II, INC.
By:________________________
Name:
Title:
DLJ MERCHANT BANKING PARTNERS II, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:_________________________
Name:
Title:
DLJ MERCHANT BANKING PARTNERS II-A, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:___________________________
Name:
Title:
DLJ DIVERSIFIED PARTNERS, L.P.
By: DLJ Diversified Partners, Inc.
Managing General Partner
By:___________________________
Name:
Title:
DLJ DIVERSIFIED PARTNERS-A, L.P.
By: DLJ Diversified Partners, Inc.
Managing General Partner
By:__________________________
Name:
Title:
DLJ MILLENNIUM PARTNERS, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:__________________________
Name:
Title:
DLJ MILLENNIUM PARTNERS-A, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:___________________________
Name:
Title:
DLJ FIRST ESC L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By:____________________________
Name:
Title:
DLJ OFFSHORE PARTNERS II, C.V.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:___________________________
Name:
Title:
DLJ EAB PARTNERS, L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By:___________________________
Name:
Title:
DLJ ESC II L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By:___________________________
Name:
Title:
Contacts: Debi Ford (Investors)
602-627-2700
Todd Fogarty (Media)
212-521-4800
FOR IMMEDIATE RELEASE
ALLIED WASTE INDUSTRIES COMPLETES
ACQUISITION OF BROWNING-FERRIS INDUSTRIES
SCOTTSDALE, AZ, AUGUST 2, 1999 - Allied Waste Industries, Inc. (NYSE: AW)
announced today that it has completed its previously announced acquisition of
Browning-Ferris Industries, Inc. (NYSE: BFI), creating the second largest waste
services company in the United States. As a result of the acquisition, each
share of BFI common stock was converted into the right to receive $45 in cash.
Including assumed and refinanced debt, the cost of acquiring BFI was
approximately $9.4 billion.
"With the acquisition of BFI now complete, Allied Waste is well positioned to
establish itself as a leader in the waste services industry," said Tom Van
Weelden, Chairman and Chief Executive Officer of Allied Waste. "Current
favorable industry conditions, together with the excellent asset base of the
combined company, give us a high level of confidence in our ability to continue
executing our business plan and creating value for our investors."
Mr. Van Weelden noted that the new Allied Waste benefits from a broad geographic
presence in 46 states and 64 markets. Its 35,300 employees serve 9.9 million
commercial and residential customers from a premier base of assets, including
166 landfills, 164 transfer stations, 129 recycling facilities and 362
collection companies.
With the completion of the BFI acquisition, Allied Waste's operations have been
organized into eight operating regions -- Great Lakes, Midwest, Northeast,
Southeast, Southwest, West, Atlantic and Central - and eight new Assistant
Regional Vice Presidents have been added to the Company's management structure.
Also, Allied Waste's corporate staff in Scottsdale, Arizona is expected to more
than double in size to approximately 235 people from 92 people.
Mr. Van Weelden said Allied Waste's growth will continue to be driven by the
disciplined implementation of its vertical integration business strategy, in
which it maximizes the flow to its own landfills of waste volumes collected by
Allied Waste-owned companies. He also said the new base of assets offer a strong
platform for sustainable growth. Specifically, the Company will seek to generate
operating efficiencies from 22 overlapping service areas through transportation
savings, routing improvements, closure of duplicate facilities and increased
internalization of waste volumes. Moreover, Mr. Van Weelden said Allied Waste
will pursue growth and profit improvement opportunities in 37 new integrated
markets through tuck-in acquisitions and improvements in the utilization of
assets.
<PAGE>
Financing for the acquisition of BFI was obtained from $7.5 billion of credit
facilities provided by a bank group including The Chase Manhattan Bank,
Citicorp, Credit Suisse First Boston and DLJ Capital Funding, from the sale of
$1 billion of newly issued senior convertible preferred stock to investors led
by affiliates of Apollo Advisors and Blackstone Capital Partners, and from the
sale of $2 billion of 10% Senior Subordinated Notes due 2009.
As previously announced, Allied Waste has reached agreements for the sale of
certain former BFI assets representing approximately $1.7 billion in aggregate
proceeds. The divestitures include the sale of certain Canadian solid waste
assets to Waste Management Inc. for $501 million in cash; the sale of medical
waste operations in the U.S., Puerto Rico and Canada to Stericycle, Inc. for
approximately $440 million in cash; the sale of substantially all of the assets
and certain development rights of BFI Gas Services, Inc. to Gas Recovery
Systems, Inc. for approximately $78 million in cash and other consideration; and
the sale of certain Department of Justice required asset divestitures to
Republic Services, Inc. for approximately $230 million in cash. In addition,
Allied Waste has completed the sale to Suez-Lyonnaise of the shares of SITA
owned by BFI for approximately $444 million. The proceeds from these
divestitures will be used to reduce debt incurred in the acquisition of BFI.
First Chicago Trust Company of New York is acting as disbursing agent for the
distribution of the cash proceeds to former BFI shareholders. First Chicago
Trust will mail instructions and transmittal instructions to former BFI
shareholders as soon as practicable.
Allied Waste Industries, Inc., a leading North American waste services company,
provides collection, recycling and disposal services for residential, commercial
and industrial customers.
Certain matters discussed in this press release are "forward-looking statements"
intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified as such because the context of the
statement will include words such as the company "believes," "anticipates,"
"expects" or words of similar import. Similarly, statements that describe the
company's future plans, objectives or goals are forward-looking statements. Such
forward-looking statements are subject to certain risks and uncertainties, which
could cause actual results to differ materially from those currently
anticipated. Examples of such risks and uncertainties include, without
limitation, the ability of Allied to continue its vertical integration business
strategy in a successful manner; the ability of Allied to successfully pursue
and continue a disciplined market development program, the ability of Allied to
successfully integrate the acquired operations, to exit certain regional markets
and certain non-strategic businesses, whether and when a transaction is
concluded or completed will be accretive to Allied's earnings, and the amount of
consideration to be paid and timing of the closing of the potential transaction
currently under definitive agreement. Other factors which could materially
affect such forward-looking statements can be found in the company's periodic
reports filed with the Securities and Exchange Commission. Shareholders,
potential investors and other readers are urged to consider these factors
carefully in evaluating the forward-looking statements and are cautioned not to
place undue reliance on such forward-looking statements. The forward-looking
statements made herein are only made as of the date of this press release and
the company undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.
