1
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STOCK PURCHASE AGREEMENT
among
Allied Waste Industries, Inc., Allied Holdings (United States), Inc.
and 3294862 Canada Inc.
and
Xxxxxxx Inc., Xxxxxxx Transportation, Inc.,
Xxxxxxx Waste Systems, Inc.,
Xxxxxxx Waste Systems (Canada) Ltd., and
Xxxxxxx Medical Services Ltd.
dated as of
September 17, 1996
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION . . . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . 2
1.2 Interpretation . . . . . . . . . . . . . . . . . . . . 16
1.3 Knowledge . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE II
THE ACQUISITIONS . . . . . . . . . . . . 17
2.1 Sales and Purchases of Shares . . . . . . . . . . . . 17
2.2 Consideration for LWSI Shares . . . . . . . . . . . . 17
2.3 Consideration for LWSC and LMS Shares . . . . . . . . 17
2.4 Post-Closing Adjustment of Working Capital . . . . . . 18
ARTICLE III
THE CLOSING AND RELATED MATTERS . . . . . . . . 19
3.1 The Closing . . . . . . . . . . . . . . . . . . . . . 19
3.2 Actions in Contemplation of Closing . . . . . . . . . 19
3.3 Other Actions at the Closing . . . . . . . . . . . . . 21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF XXXXXXX SELLERS . . . . 22
4.1 Organization of Xxxxxxx Sellers . . . . . . . . . . . 22
4.2 Authority Relative to this Agreement . . . . . . . . . 22
4.3 No Violations . . . . . . . . . . . . . . . . . . . . 22
4.4 Consents and Approvals . . . . . . . . . . . . . . . . 23
4.5 Acquired Subsidiaries . . . . . . . . . . . . . . . . 23
4.6 No Other Subsidiaries . . . . . . . . . . . . . . . . 24
4.7 Conduct of Solid Waste Business . . . . . . . . . . . 24
4.8 Financial Statements . . . . . . . . . . . . . . . . . 25
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4.9 Absence of Certain Changes . . . . . . . . . . . . . . 26
4.10 No Undisclosed Liabilities . . . . . . . . . . . . . . 26
4.11 Acquired Subsidiary Properties . . . . . . . . . . . . 26
4.12 Landfills . . . . . . . . . . . . . . . . . . . . . . 26
4.13 Taxes and Tax Returns . . . . . . . . . . . . . . . . 27
4.14 Litigation . . . . . . . . . . . . . . . . . . . . . . 28
4.15 Environmental Matters . . . . . . . . . . . . . . . . 28
4.16 Governmental Licenses and Permits; Compliance
with Laws . . . . . . . . . . . . . . . . . . 29
4.17 Labor Matters . . . . . . . . . . . . . . . . . . . . 30
4.18 Employee Benefit Plans . . . . . . . . . . . . . . . . 30
4.19 Material Contracts . . . . . . . . . . . . . . . . . . 32
4.20 Bank Accounts . . . . . . . . . . . . . . . . . . . . 34
4.21 Officers and Directors . . . . . . . . . . . . . . . . 34
4.22 Brokers . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ALLIED PARTIES . . . . 34
5.1 Organization of Allied Parties . . . . . . . . . . . . 34
5.2 Authority Relative to this Agreement . . . . . . . . . 34
5.3 Status of Allied Common Shares . . . . . . . . . . . . 35
5.4 No Violations . . . . . . . . . . . . . . . . . . . . 35
5.5 Consents and Approval . . . . . . . . . . . . . . . . 36
5.6 Allied Capitalization . . . . . . . . . . . . . . . . 36
5.7 Allied Subsidiaries . . . . . . . . . . . . . . . . . 37
5.8 SEC Filings . . . . . . . . . . . . . . . . . . . . . 37
5.9 Allied Financial Statements . . . . . . . . . . . . . 38
5.10 Absence of Certain Changes . . . . . . . . . . . . . . 38
5.11 No Undisclosed Liabilities . . . . . . . . . . . . . . 38
5.12 Allied Properties . . . . . . . . . . . . . . . . . . 38
5.13 Taxes and Tax Returns . . . . . . . . . . . . . . . . 39
5.14 Litigation . . . . . . . . . . . . . . . . . . . . . . 39
5.15 Environmental Matters . . . . . . . . . . . . . . . . 40
5.16 Governmental Licenses and Permits; Compliance
with Laws . . . . . . . . . . . . . . . . . . 41
5.17 Labor Matters . . . . . . . . . . . . . . . . . . . . 41
5.18 Opinion of Financial Advisor . . . . . . . . . . . . . 41
5.19 Financing . . . . . . . . . . . . . . . . . . . . . . 42
5.20 Letter from Stockholders . . . . . . . . . . . . . . . 42
5.21 Brokers . . . . . . . . . . . . . . . . . . . . . . . 42
5.22 Aggregation . . . . . . . . . . . . . . . . . . . . . 42
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ARTICLE VI
XXXXXXX AGREEMENTS PENDING CLOSING . . . . . . . . 42
6.1 Conduct of Business . . . . . . . . . . . . . . . . . 42
6.2 Forbearance by the Acquired Subsidiaries . . . . . . . 44
6.3 Access and Information . . . . . . . . . . . . . . . . 45
6.4 Supplemental Information . . . . . . . . . . . . . . . 45
6.5 Audit of Financial Statements . . . . . . . . . . . . 46
6.6 Access for Environmental Report . . . . . . . . . . . 46
6.7 Confidentiality . . . . . . . . . . . . . . . . . . . 47
6.8 Consummation of Acquisitions . . . . . . . . . . . . . 47
ARTICLE VII
ALLIED COVENANTS PENDING CLOSING . . . . . . . . 47
7.1 Conduct of Allied's Business . . . . . . . . . . . . . 47
7.2 Forbearance by Allied . . . . . . . . . . . . . . . . 48
7.3 Access and Information . . . . . . . . . . . . . . . . 49
7.4 Supplemental Information . . . . . . . . . . . . . . . 49
7.5 Allied Stockholders' Meeting . . . . . . . . . . . . . 49
7.6 Emcon Environmental Report . . . . . . . . . . . . . . 50
7.7 Confidentiality . . . . . . . . . . . . . . . . . . . 50
7.8 Consummation of Acquisitions . . . . . . . . . . . . . 50
ARTICLE VIII
MUTUAL CONDITIONS . . . . . . . . . . . . 50
8.1 No Adverse Proceedings . . . . . . . . . . . . . . . . 50
8.2 HSR Waiting Period . . . . . . . . . . . . . . . . . . 50
8.3 Allied Stockholder Approval . . . . . . . . . . . . . 51
8.4 Competition Act Matters . . . . . . . . . . . . . . . 51
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF ALLIED PARTIES . . . . . 51
9.1 Representations True at Closing . . . . . . . . . . . 51
9.2 No Adverse Changes . . . . . . . . . . . . . . . . . . 52
9.3 Opinion of Xxxxxxx U.S. Counsel . . . . . . . . . . . 52
9.4 Opinion of Xxxxxxx Canadian Counsel . . . . . . . . . 52
9.5 Investment Canada Act . . . . . . . . . . . . . . . . 52
9.6 Competition Act Matters . . . . . . . . . . . . . . . 52
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9.7 Audited Financial Statements . . . . . . . . . . . . . 53
9.8 Emcon Environmental Report . . . . . . . . . . . . . . 53
9.9 Acquisitions Financing . . . . . . . . . . . . . . . . 53
9.10 Outstanding Indebtedness . . . . . . . . . . . . . . . 53
ARTICLE X
CONDITIONS TO XXXXXXX'X OBLIGATIONS . . . . . . . 53
10.1 Representations True at Closing . . . . . . . . . . . 53
10.2 No Adverse Changes . . . . . . . . . . . . . . . . . . 54
10.3 Opinion of Allied's U.S. Counsel . . . . . . . . . . . 54
10.4 Opinion of Allied's Canadian Counsel . . . . . . . . . 54
ARTICLE XI
ADDITIONAL AGREEMENTS . . . . . . . . . . . 54
11.1 HSR Act Filings . . . . . . . . . . . . . . . . . . . 54
11.2 Competition Act Filings . . . . . . . . . . . . . . . 54
11.3 Investment Canada Act Filings . . . . . . . . . . . . 55
11.4 Other Consents and Approvals . . . . . . . . . . . . . 55
11.5 Publicity . . . . . . . . . . . . . . . . . . . . . . 55
11.6 Expenses . . . . . . . . . . . . . . . . . . . . . . . 55
11.7 Securities Law Matters . . . . . . . . . . . . . . . . 55
11.8 Rule 144 Reports . . . . . . . . . . . . . . . . . . . 57
11.9 Use of Xxxxxxx Name . . . . . . . . . . . . . . . . . 57
11.10 Environmental Remediation . . . . . . . . . . . . . . 58
11.11 Xxxxxxx Guaranties . . . . . . . . . . . . . . . . . . 58
11.12 Xxxxxxx Board Representation . . . . . . . . . . . . . 60
11.13 Attendance at Stockholder Meetings . . . . . . . . . . 60
11.14 Xxxxxxx Standstill . . . . . . . . . . . . . . . . . . 60
11.15 Transition Agreement . . . . . . . . . . . . . . . . . 62
ARTICLE XII
TAX MATTERS . . . . . . . . . . . . . 63
12.1 Section 338 Election . . . . . . . . . . . . . . . . . 63
12.2 Future Tax Returns . . . . . . . . . . . . . . . . . . 64
12.3 Tax Covenants . . . . . . . . . . . . . . . . . . . . 66
12.4 Other Tax Matters, Post-Closing Cooperation . . . . . 67
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12.5 Tax Controversies . . . . . . . . . . . . . . . . . . 67
12.6 Certain Pending Tax Controversies . . . . . . . . . . 69
ARTICLE XIII
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . 69
13.1 Nature of Statements . . . . . . . . . . . . . . . . . 69
13.2 Survival of Representations and Warranties . . . . . . 69
ARTICLE XIV
INDEMNIFICATION . . . . . . . . . . . . 70
14.1 Indemnification by the Xxxxxxx Sellers . . . . . . . . 70
14.2 Indemnification by Allied . . . . . . . . . . . . . . 73
14.3 Third Party Claims . . . . . . . . . . . . . . . . . . 74
ARTICLE XV
AMENDMENT AND TERMINATION . . . . . . . . . . 77
15.1 Amendment . . . . . . . . . . . . . . . . . . . . . . 77
15.2 Waiver . . . . . . . . . . . . . . . . . . . . . . . . 77
15.3 Termination . . . . . . . . . . . . . . . . . . . . . 77
15.4 Substitute Financing . . . . . . . . . . . . . . . . . 78
15.5 Consequences of Termination . . . . . . . . . . . . . 79
ARTICLE XVI
GENERAL PROVISIONS . . . . . . . . . . . . 79
16.1 Non-Business Days . . . . . . . . . . . . . . . . . . 79
16.2 Notices . . . . . . . . . . . . . . . . . . . . . . . 79
16.3 Entire Agreement . . . . . . . . . . . . . . . . . . . 80
16.4 Assignment; Binding Effect . . . . . . . . . . . . . . 80
16.5 Counterparts. . . . . . . . . . . . . . . . . . . . . 80
16.6 Governing Law; Jurisdiction. . . . . . . . . . . . . . 80
16.7 Severability of Provisions . . . . . . . . . . . . . . 81
16.8 Specific Performance . . . . . . . . . . . . . . . . . 81
16.9 Joint Drafting. . . . . . . . . . . . . . . . . . . . 81
16.10 Captions . . . . . . . . . . . . . . . . . . . . . . . 81
16.11 No Third-Party Beneficiaries. . . . . . . . . . . . . 81
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List of Exhibits
Exhibit A-1 Form of Allied Canada 7% Debenture
Exhibit A-2 Form of Allied Canada Zero Coupon Debenture
Exhibit B-1 Form of Allied Finance 7% Debenture
Exhibit B-2 Form of Allied Finance Zero Coupon Debenture
Exhibit C Form of Allied Warrant
Exhibit D Form of Xxxxxxx Subscription Agreement
Exhibit E Form of Stock Registration Agreement
Exhibit F Form of Waste Services Management Agreement
Exhibit G Form of Release Agreement
Exhibit H-1 Form of Guaranty [Allied Finance 7% Debenture]
Exhibit H-2 Form of Guaranty [Allied Finance Zero Coupon Debenture]
Exhibit I Form of Opinion of Xxxxxxx'x Counsel
Exhibit J Form of Opinion of Xxxxxxx'x Canadian Counsel
Exhibit K Form of Opinion of Allied's Counsel
Exhibit L Form of Opinion of Allied's Canadian Counsel
Exhibit M Form of Debenture Exchange Agreement
Exhibit N Form of Offset Letter Agreement
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List of Schedules
Acquired Subsidiaries -- Schedule I
Retained Subsidiaries -- Schedule II
Intercompany Waste Agreements -- Schedule III
Retained Land -- Schedule IV
Leased Assets -- Schedule V
Allied Disclosure Schedule
Xxxxxxx Disclosure Schedule
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), dated as of
September 17, 1996, among Allied Waste Industries, Inc., a Delaware corporation
("Allied"), Allied Holdings (United States), Inc., a Delaware corporation and a
wholly owned subsidiary of Allied ("Allied U.S.") and 3294862 Canada Inc., a
Canadian corporation and a wholly owned subsidiary of Allied U.S. ("Allied
Canada"), all of which are collectively referred to in this Agreement as the
"Allied Parties," and Xxxxxxx Inc., a Canadian corporation ("Xxxxxxx"), Xxxxxxx
Transportation, Inc., a Delaware corporation and an indirect wholly owned
subsidiary of Xxxxxxx ("LTI"), Xxxxxxx Waste Systems, Inc., a Delaware
corporation and a wholly owned subsidiary of LTI ("LWSI"), Xxxxxxx Waste
Systems (Canada) Ltd., a Canadian corporation and a wholly owned subsidiary of
Xxxxxxx ("LWSC"), and Xxxxxxx Medical Services Ltd., a Canadian corporation and
a wholly owned subsidiary of Xxxxxxx ("LMS"), all of which are collectively
referred to in this Agreement as the "Xxxxxxx Parties."
W I T N E S S E T H:
WHEREAS, Xxxxxxx, exclusively through LWSI, LWSC, LMS and their
respective direct and indirect subsidiaries, is engaged in the solid waste
management business in the United States and Canada; and
WHEREAS, Xxxxxxx wishes to sell all of its United States and Canadian
solid waste management operations; and
WHEREAS, Allied, through the acquisition by Allied U.S. of all of the
issued and outstanding capital stock of LWSI and the acquisition by Allied
Canada of all of the issued and outstanding shares of the share capital of each
of LWSC and LMS, wishes to purchase, all of the United States and Canadian
solid waste management operations of Xxxxxxx;
NOW, THEREFORE, the Allied Parties and the Xxxxxxx Parties
(collectively, the "Parties") agree as follows:
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ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this Agreement:
"Acquired Canadian Subsidiaries" means those Acquired
Subsidiaries which are incorporated under the laws of Canada or a
Canadian province.
"Acquired Subsidiaries" means (i) LWSI, (ii) the direct and
indirect wholly owned Subsidiaries of LWSI listed and identified on
the attached Schedule I, (iii) LWSC, (iv) the direct and indirect
wholly owned Subsidiaries of LWSC listed and identified on the
attached Schedule I, (v) LMS, and (vi) the 55% owned Subsidiary of LMS
identified on the attached Schedule I, collectively.
"Acquired U.S. Subsidiaries" means those Acquired Subsidiaries
which are incorporated under the laws of a state of the United States.
"Acquisitions" mean the U.S. Acquisition and the Canadian
Acquisitions, collectively.
"Additional Allied Common Shares" means shares of Allied
Common Stock which may be issued after the Closing (i) in payment of
interest on, or in redemption of, Allied Finance Debentures pursuant
to the Xxxxxxx Subscription Agreement or (ii) pursuant to the Allied
Warrant.
"Advance Ruling Certificate" means an advance ruling
certificate issued by the Competition Act Director under Section 102
of the Competition Act.
"Affiliate" means, with respect to any Person, another Person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such Person
with the terms "control" and "controlled" meaning for purposes of this
definition, the power to direct the management and policies of a
Person, directly or indirectly, whether through the ownership of
voting securities or partnership or other ownership interests, or by
contract or otherwise.
"Allied Canada Debentures" means the Allied Canada 7%
Debenture and the Allied Canada Zero Coupon Debenture.
"Allied Canada 7% Debenture" means the 7% Junior Subordinated
Debenture Due [twelve years after the Closing Date] of Allied Canada,
in
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substantially the form of Exhibit A-1 attached to this Agreement
which, is to be issued by Allied Canada to Xxxxxxx under Section 2.3.
"Allied Canada Zero Coupon Debenture" means the Zero Coupon
Junior Subordinated Debenture Due [twelve years after the Closing
Date] of Allied Canada, in substantially the form of Exhibit A-2
attached to this Agreement, which is to be issued by Allied Canada to
Xxxxxxx under Section 2.3.
"Allied Common Shares" means the shares of Allied Common Stock
issuable to Xxxxxxx and LTI under Sections 2.2 and 2.3 as partial
consideration for the LWSC Shares and the LWSI Shares.
"Allied Common Stock" means the Common Stock, $.01 par value
per share, of Allied.
"Allied Disclosure Schedule" means the Disclosure Schedule
signed for identification purposes only by the respective Presidents,
Chief Executive Officers or Chief Financial Officers of the respective
Allied Parties, which the Allied Parties have delivered to the Xxxxxxx
Sellers on or before the date of this Agreement, and which contains
information relevant to the representations and warranties made by the
Allied Parties in Article V.
"Allied Fairness Opinion" means the opinion of Xxxxxxx, Sachs
& Co. referred to in Section 5.18.
"Allied Finance" means 3294854 Canada, Inc., a Canadian
corporation and a wholly owned subsidiary of Allied.
"Allied Finance Debentures" means the Allied Finance 7%
Debenture and the Allied Finance Zero Coupon Debenture.
"Allied Finance 7% Debenture" means the 7% Junior Subordinated
Debenture Due [twelve years after the Closing Date] of Allied Finance,
in substantially the form of Exhibit B-1 attached to this Agreement,
which is to be issued by Allied Finance to Xxxxxxx pursuant to the
Debenture Exchange Agreement.
"Allied Finance Zero Coupon Debenture" means the Zero Coupon
Junior Subordinated Debenture Due [twelve years after the Closing
Date] of Allied Finance, in substantially the form of Exhibit B-2
attached to this Agreement, which is to be issued by Allied Finance to
Xxxxxxx pursuant to the Debenture Exchange Agreement.
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"Allied Proxy Statement" has the meaning specified in Section
7.5.
"Allied Reorganization Transaction" means: (i) any merger,
consolidation, recapitalization, liquidation or other business
combination transaction involving Allied; (ii) any tender offer or
exchange offer for any securities of Allied; or (iii) any sale or
other disposition of assets of Allied or any of its Subsidiaries in a
single transaction or in a series of related transactions.
"Allied Securities" means, collectively, the Allied Common
Shares, the Allied Canada Debentures, the Allied Finance Debentures,
the Allied Warrant, the Allied Warrant Shares and the Additional
Allied Common Shares.
"Allied SEC Filings" has the meaning specified in Section 5.8.
"Allied Stockholders' Meeting" means the meeting of Allied's
stockholders referred to in Section 7.5, as it may be continued
following any temporary adjournment or adjournments thereof.
"Allied Warrant" means the warrant for the purchase of shares
of Allied Common Stock, to be issued by Allied to Xxxxxxx under
Section 2.3 which shall be in substantially the form of Exhibit C
attached to this Agreement.
"Allied Warrant Shares" means the shares of Allied Common
Stock which may be issued upon any exercise of the Allied Warrant.
"Ancillary Agreements" means, collectively, the Stock
Registration Agreement, the Allied Canada Debentures, the Allied
Finance Debentures, the Waste Services Management Agreement, the
Release, the Guaranties, the Xxxxxxx Subscription Agreement, the
Debenture Exchange Agreement and the Offset Letter Agreement.
"Antitrust Division" means the Antitrust Division of the
United States Department of Justice.
"Business Day" means a day other than Saturday, Sunday or any
day on which banks located in Toronto, Ontario or New York, New York
are authorized or obligated to close.
"Canadian Acquisitions" means the respective acquisitions by
Allied Canada of the LWSC Shares and the LMS Shares from Xxxxxxx as
contemplated in Section 2.1.
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"C$" or "Canadian dollars" refers to lawful currency of Canada.
"Canadian GAAP" means Canadian generally accepted accounting
principles consistently applied throughout the specified period and,
if applicable, the immediately preceding comparable period.
"Closing" has the meaning specified in Section 3.1.
"Closing Date" means (a) the fifth Business Day immediately
following the earliest date upon or by which (i) the waiting period
under the HSR Act shall have expired or otherwise been terminated,
(ii) the Competition Act Director shall have issued and not
subsequently withdrawn or threatened to withdraw, an Advance Ruling
Certificate relating to the Acquisitions, (iii) the Allied Parties
shall have received the advice from the Competition Act Director
specified in Section 9.7, (iv) the ICA Minister shall have made the
determination, or shall have been deemed to have made the
determination, specified in Section 9.6, and (iv) all other conditions
to the respective obligations of the Parties set forth in Articles
VIII, IX and X shall have been satisfied or waived, or (b) such other
date as Allied and Xxxxxxx may agree.
"Closing Date Working Capital" means the positive or negative
amount obtained by subtracting (i) the amount which would be reflected
as current liabilities on a combined balance sheet of the Acquired
Subsidiaries dated as of the Closing Date and prepared in accordance
with U.S. GAAP on a consistent basis with the SWM Group May 31
Combined Financial Statement from (ii) the amount which would be
reflected on such a balance sheet as current assets.
"Code" means the United States Internal Revenue Code of 1986,
as amended.
"Commitment Letter" means the letter dated September 17, 1996,
addressed to Allied, relating to senior credit facilities in an
aggregate principal amount of $1,225,000,000 to be provided by Xxxxxxx
Sachs Credit Partners L.P., Citicorp USA, Inc. and Credit Suisse, as
initial lenders, in connection with, and conditioned upon consummation
of, the Acquisitions, subject to the satisfaction of other conditions
and upon the terms set forth therein including attachments thereto.
"Competition Act" means the Canadian federal Competition Act,
R.S.C. 1985, c. C-34, as amended.
"Competition Act Director" means the Canadian Director of
Investigation and Research appointed under the Competition Act.
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"Confidentiality Agreement" means the confidentiality
agreement dated as of July 3, 1996, as amended, between Allied and
Xxxxxxx.
"Current Market Price" per share of Allied Common Stock on any
specified date means the average daily market prices (determined as
set forth below in this definition), of the Allied Common Stock for
the 20 consecutive Trading Days ending on the third Trading Day before
that date. The market price for each such Trading Day shall be the
average of the last sale prices on such Trading Day on all stock
exchanges and the Nasdaq Stock Market on which the Allied Common Stock
may then be listed or admitted for quotation, respectively; provided,
that if no sale takes place on any such Trading Day on any such
exchange or the Nasdaq Stock Market, the average of the closing bid
and asked prices on such day as officially quoted thereon shall be
used, or, if Allied Common Stock is not then listed or admitted for
quotation on any stock exchange or the Nasdaq Stock Market, the market
price for each Trading Day shall be the average of the reported bid
and asked prices on such day on the over-the-counter market, or, if
Allied Common Stock is not quoted on the over-the- counter market, the
market price for each Trading Day shall be the average of the bid and
asked prices furnished by any member of the National Association of
Securities Dealers selected by Allied.
"Damages" means all obligations, claims, liabilities, damages,
penalties, deficiencies, losses, investigations, proceedings,
judgments, fines, and reasonable costs and expenses (including, but
not limited to, reasonable costs and expenses incurred in connection
with the performance of obligations, interest, bonding and court costs
and attorneys', accountants', engineers', consultants' and
investigators' fees and disbursements) and disbursements incurred in
connection with any investigation or defense of any of the foregoing.
"Debenture Exchange Agreement" means the Debenture Exchange
Agreement entered into by Xxxxxxx and Allied Finance in substantially
the form of Exhibit M to this Agreement.
"Emcon Environmental Report" has the meaning specified in
Section 6.6.
"Environmental Claim" means any claim by a Person alleging or
imposing actual or potential liability (including potential liability
for any investigatory cost, containment or oversight cost, control
cost, prevention cost, remediation cost, cleanup cost, governmental
response cost, natural resources damage, toxic tort claim, property
damage, personal injury, or penalty) arising out of, based on,
resulting from or relating to (i) the presence, storage, transport,
disposal, use, discharge, release or threatened release of any
Hazardous Substance at any location, whether or not owned by the
Person against which
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the claim is made, or (ii) circumstances forming the basis for any
liability under, or any violation or alleged violation of, any
Environmental Law.
"Environmental Laws" means all applicable U.S. or Canadian
federal, state, provincial, local and other foreign Laws, including
common Laws and administrative or judicial interpretations of those
Laws by any Governmental Entity, and published non-legally binding
policies and guidelines of any Canadian Governmental Entity, relating
to the preservation of natural resources, pollution or the protection
of human health and safety from the effects of pollution or the
environment (which includes its ambient air, surface water, ground
water, land surface or subsurface strata), including Laws relating to
emissions, discharges, releases or threatened releases of Hazardous
Substances, or otherwise relating to the manufacture, processing,
distribution, use, existence, treatment, storage, disposal, transport,
recycling, reporting or handling of Hazardous Substances, but not
including zoning and land use Laws.
"Environmental Permits" means all permits, licenses,
registrations, certifications, exemptions, approvals and other
authorizations of or by any Governmental Entity required under any
Environmental Law for any Acquired Subsidiary, or Allied or any of its
Subsidiaries, as the case may be, to conduct its or their operations
as presently conducted.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means, with respect to any Person, any trade
or business, whether or not incorporated, which together with that
Person would be deemed a single employer within the meaning of Section
4001 of ERISA or Section 414 of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated under
such Act.
"FTC" means the United States Federal Trade Commission.
"Governmental Entity" means any U.S., Canadian, state,
territorial, federal, provincial, local or foreign court, executive
office, legislature, governmental agency or ministry, commission, or
administrative, regulatory or self-regulatory authority or
instrumentality.
"Guaranties" means the guaranties of the Allied Finance
Debentures which are to be entered into by Allied in substantially the
form of Exhibits H-1 and H-2, respectively, attached to this
Agreement.
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"Hazardous Substances" means chemicals, pollutants,
contaminants, wastes (including ambient wastes, hazardous wastes and
liquid industrial wastes), or other substances (including toxic,
deleterious or hazardous substances), as defined, listed or regulated
pursuant to Environmental Laws, including, asbestos or
asbestos-containing materials, polychlorinated biphenyls, pesticides
and oils, and petroleum and petroleum products (as those exemplary
terms are defined in or regulated under the United States National Oil
and Hazardous Substances Pollution Contingency Plan, 40 C.F.R.
Sections 300.1 et seq. and other Environmental Laws).
"High Yield Event Notice" has the meaning specified in Section
15.4.
"Highly Confident Letter" means the letter dated September 17,
1996, from Xxxxxxx, Xxxxx & Co. and Citicorp Securities, Inc. to
Allied, in which Xxxxxxx, Sachs & Co. and Citicorp Securities, Inc.
represent that they are highly confident of their ability to complete
the sale in a private placement or public offering of unsecured
subordinated promissory notes of Allied U.S. in an aggregate principal
amount of at least $475,000,000 in connection with, and conditioned
upon consummation of, the Acquisitions, subject to the satisfaction of
the other conditions and upon the terms set forth therein.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"ICA Minister" means the Minister responsible for
administering the Investment Canada Act.
"Income Tax Act" means the Canadian federal Income Tax Act,
R.S.C. 1985 c. 1, as amended.
"Indebtedness" means with respect to any Person at any date,
(a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond,
debenture, letter of credit or similar instrument, (c) all obligations
of such Persons with respect to guarantees, (d) all obligations of
such Person under leases of property which are required to be
capitalized under U.S. GAAP, (e) all obligations of such Person in
respect of acceptances issued or created for the account of such
Person (other than endorsements in the ordinary course of business),
(f) all obligations in respect of interest rate swaps or other
interest rate hedging products or foreign currency exchange agreements
or exchange rate hedging arrangements, (g) all obligations in respect
of reimbursement obligations
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under letters of credit, and (h) all liabilities of the type referred
to in clauses (a) through (g) above that are secured by any lien,
charge, security interest or encumbrance on any property owned by such
Person even though such Person has not assumed or otherwise become
liable for the payment thereof.
"Intercompany Agreements" means all contracts, agreements,
policies, practices and understandings, whether written or oral,
between any one or more of the Acquired Subsidiaries, on the one hand,
and any one or more members of the Xxxxxxx Group other than the
Acquired Subsidiaries, on the other hand, relating to any sharing or
allocation of expenses, personnel, services or facilities, including
the Tax Allocation Agreements but specifically excluding the
Intercompany Waste Agreements.
"Intercompany Indebtedness" means, at any date, all amounts
owed on that date by an Acquired Subsidiary, or any obligation of an
Acquired Subsidiary, contingent or otherwise on that date, to Xxxxxxx
or any other member of the Xxxxxxx Group other than the Acquired
Subsidiaries, including under any Tax Allocation Agreement or other
Intercompany Agreement, but excluding all amounts owed by any Acquired
Subsidiary to any member of the Xxxxxxx Group under any Intercompany
Waste Agreement.
"Intercompany Investment" means, at any date, any equity
interests in any Acquired Subsidiary, except the LWSI Shares, the LWSC
Shares, the LMS Shares and the common or ordinary shares of each other
Acquired Subsidiary.
"Intercompany Receivable" means, at any date, all amounts owed
on that date to an Acquired Subsidiary by Xxxxxxx or any other member
of the Xxxxxxx Group other than the Acquired Subsidiaries, including
under any Tax Allocation Agreement or other Intercompany Agreement.
"Intercompany Waste Agreements" means those certain agreements
relating to the handling of waste by certain of the Acquired
Subsidiaries as described on Schedule III attached to this Agreement.
"Investment Canada Act" means the Investment Canada Act,
R.S.C. 1985, c. C-28, as amended.
"Xxxxxxx Disclosure Schedule" means the Disclosure Schedule
signed for identification purposes only by the respective Presidents,
Chief Executive Officers or Senior Vice Presidents of each of the
Xxxxxxx Sellers, which the Xxxxxxx Sellers have delivered to the
Allied Parties on or before the date of this Agreement, and which
contains information relevant to the representations and warranties
made by the Xxxxxxx Sellers in Article IV.
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"Xxxxxxx Group" means, at any date, Xxxxxxx and all of its
Affiliates at that date (but excluding after the Closing, the Acquired
Subsidiaries), and "member of the Xxxxxxx Group" refers to Xxxxxxx or
any such Affiliates.
"Xxxxxxx Guaranty" means any guaranty, performance guaranty,
bond, performance bond, suretyship arrangement, surety bond, credit,
letter of credit, reimbursement agreement or other undertaking,
deposit commitment or arrangement by which any member of the Xxxxxxx
Group is or may be primarily, secondarily, contingently or
conditionally liable for or in respect of (or which creates,
constitutes or evidences a Lien on any of the assets or properties of
any member of the Xxxxxxx Group which secures the payment or
performance of) any present or future liability or obligation of any
Acquired Subsidiary as set forth on in Section 4.19 (viii) of the
Xxxxxxx Disclosure Schedule.
"Xxxxxxx Issuer Bank" means any bank or other financial
institution which is the issuer of a letter of credit which is a
Xxxxxxx Reclamation Guaranty.
"Xxxxxxx Sellers" means Xxxxxxx and LTI, together.
"Xxxxxxx Subscription Agreement" means the agreement among
Allied, Allied Finance, Xxxxxxx and LTI pursuant to which LTI has
agreed to subscribe for shares of the Allied Common Stock upon certain
conditions therein set forth, which shall be in substantially the form
of Exhibit D.
"Latest Allied Balance Sheet" has the meaning specified in
Section 5.9.
"Law" means a law, statute, ordinance, rule, code or
regulation enacted or promulgated, or order, directive, instruction or
other legally binding guideline or policy issued or rendered by, any
Governmental Entity.
"Leased Assets" means those assets described on Schedule V to
this Agreement which are owned by Xxxxxxx or another member of the
Xxxxxxx Group (other than the Acquired Subsidiaries) and leased to the
Acquired Subsidiaries.
"LESL" means Xxxxxxx Environmental Services Ltd., an Ontario
corporation, a wholly owned subsidiary of Xxxxxxx and a Retained
Subsidiary.
"Lien" means a lien, mortgage, deed of trust, deed to secure
debt, pledge, hypothecation, assignment, deposit arrangement,
easement, preference, priority, assessment, security interest, lease,
sublease, charge, claim, adverse claim, levy,
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interest of other Persons, or other encumbrance of any kind (including
any conditional sale or other title retention agreement having the
same economic effect as any of the foregoing).
"LMS Shares" means all of the common or ordinary shares in the
issued and outstanding share capital of LMS which are 100% owned by
Xxxxxxx.
"LMT" means Xxxxxxx Med Trade Medical Services Inc., a British
Columbia corporation, an Acquired Canadian Subsidiary, and a 55% owned
Subsidiary of LMS.
"LTI U.S. Consolidated Tax Group" means the affiliated group
of corporations within the meaning of Section 1504(c) of the Code, of
which LTI is the common parent corporation, which files a consolidated
Tax Return for U.S. federal income Tax purposes, and which includes
LTI, the Acquired U.S. Subsidiaries, and certain of the Retained
Subsidiaries.
"LWSC Group Subsidiaries" means LWSC and all of its
Subsidiaries which are Acquired Subsidiaries.
"LWSC Shares" means all of the common or other shares, C$1.00
par value, in the issued and outstanding share capital of LWSC.
"LWSI Group Subsidiaries" means LWSI and all of its
Subsidiaries which are Acquired Subsidiaries.
"LWSI Shares" means all of the issued and outstanding shares
of Common Stock, $1.00 par value per share, of LWSI, which are all
owned by LTI.
"Mailing Date" has the meaning specified in Section 7.5.
"Material Adverse Effect" means (i) when used with reference
to the Acquired Subsidiaries, a material adverse effect on the
financial condition, business, assets, prospects or results of
operations of the Acquired Subsidiaries taken as a whole, (ii) when
used with reference to the Xxxxxxx Sellers, a material adverse effect
on their ability to perform their obligations under this Agreement or
any Ancillary Agreement to which any of them is a party, (iii) when
used with reference to Allied and its Subsidiaries, a material adverse
effect on the financial condition, business, assets, prospects or
results of operations of Allied and its Subsidiaries (including from
and after the Closing, the Acquired Subsidiaries) taken as a whole,
and (iv) when used with reference to the Allied Parties, a material
adverse effect on their ability to perform their obligations
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under this Agreement or any Ancillary Agreement to which any of them
is a party.
"Medical Waste" means waste generated by health care or
health care related facilities that is or may be contaminated with a
potentially infectious agent or other potentially hazardous material.
"Offset Letter Agreement" means the letter agreement dated the
Closing Date among Allied, Allied Finance, Xxxxxxx and LTI, in
substantially the form of Exhibit N attached to this Agreement, to be
executed and delivered pursuant to Section 3.3.
"Ontario Securities Act" means the Securities Act (Ontario),
R.S.O. 1990, c.S.5, as amended.
"Option Assets" means those assets which are the subject of
the letter agreement relating to the option to purchase certain assets
granted to Allied by Xxxxxxx referred to in Section 16. 3 of this
Agreement.
"Permitted Liens" means (i) those Liens set forth in Section
4.11 of the Xxxxxxx Disclosure Schedule or Section 5.12 of the Allied
Disclosure Schedule, as applicable, (ii) those Liens reflected in the
Allied SEC Filings, in the case of the Allied Parties and their assets
or properties, (iii) any Lien that is set forth in the title reports
or title insurance binders that have been made available to the Allied
Parties by the Xxxxxxx Sellers relating to any interest in real
property owned by an Acquired Subsidiary, (iv) Liens for water and
sewer charges and current taxes not yet due and payable or being
contested in good faith, and (v) other Liens (including, mechanics',
couriers', workers', repairers', materialmen's, warehousemen's and
other similar Liens) arising in the ordinary course of business as
would not in the aggregate materially adversely affect the value of,
or materially adversely interfere with the use of, the property
subject thereto.
"Person" means an individual, corporation, partnership,
association, joint stock company, limited liability company,
Governmental Entity, business trust, unincorporated organization, or
other legal entity.
"Post-Closing Tax Period" means any Tax period (or portion
thereof) beginning after the close of business on the Closing Date.
"Pre-Closing Xxxxxxx Insurance Claims" means any U.S.
liability, personal injury, property damage, workers compensation or
other similar claim (other than health and welfare insurance claims)
made against any Acquired Subsidiary by any Person with respect to a
loss, damage, claim, incident or
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occurrence which occurred before the time of Closing, including any
such matter which was incurred but not reported on or before the time
of Closing.
"Pre-Closing Tax Period" means any Tax period (or portion
thereof) ending on or before the close of business on the Closing
Date.
"Release" means the Release Agreement required to be delivered
to the Acquired Subsidiaries as provided in Section 3.3 (iv).
"Remainder High Yield Securities" has the meaning specified
in Section 15.4.
"Retained Land" means the real property owned by LWSC, more
specifically identified on Schedule IV attached to this Agreement.
"Retained Subsidiaries" means (i) Xxxxxxx Chem-Waste, Inc., a
Delaware corporation and a wholly owned Subsidiary of LWSI, (ii) all
of the direct and indirect Subsidiaries of Xxxxxxx Chem-Waste, Inc.
(all of which are specifically listed and identified on the attached
Schedule II), (iii) LESL, and (iv) all of the direct and indirect
Subsidiaries of LESL (all of which are specifically listed and
identified on the attached Schedule II).
"Revenue Canada" means Revenue Canada, Customs, Excise and
Taxation, the Canadian federal Taxing Authority.
"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
thereunder.
"Senior Subordinated Debentures" means the senior subordinated
debentures to be issued by Allied U.S. in connection with the
financing contemplated by the Highly Confident Letter.
"SFAS 109" means the United States standard on accounting for
income taxes effective September 1, 1993 promulgated by the Financial
Accounting Standards Board.
"Solid Waste" means any waste which can be lawfully disposed
of in a landfill regulated under Subtitle D of the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA").
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"Solid Waste Business" means (i) the collection, compaction,
transportation, resource recovery, storage, recycling or disposal of
Solid Waste and Medical Waste, and (ii) the methane gas collection and
electricity generation and distribution operations related to the
disposal of Solid Waste.
"Stock Registration Agreement" means the Stock Registration
Agreement to be entered into at the Closing among Allied, Xxxxxxx and
LTI as provided in Section 3.3.
"Subsidiary" of a Party means an Affiliate of that Party more
than 50% of the aggregate voting power (or of any other form of voting
equity interest in the case of a Person that is not a corporation) of
which is beneficially owned by that Party directly or indirectly
through one or more other Persons.
"Substitute Financing Election" has the meaning specified in
Section 15.4.
"Substitute Financing Notice" has the meaning specified in
Section 15.4.
"Substitute Financing Purchase Price" has the meaning
specified in Section 15.4.
"SWM Group Financial Statements" means all financial
statements of the Acquired Subsidiaries or specified groups of
Acquired Subsidiaries delivered to the Allied Parties under Sections
4.8 and 6.4, the terms "SWM Group Consolidated Financial Statements,"
"SWM Group Combined Financial Statements," "SWM Group May 31 Combined
Financial Statements," and "SWM Group Separate Company Financial
Statements" have the meanings specified in Sections 4.8 and 6.4 and
the term "SWM Group Audited Combined Financial Statements" is defined
in Section 6.5.
"SWM Group Income Taxes" means all Taxes, including United
States and Canadian federal, state, provincial and local Taxes for
which any Acquired Subsidiary is or may be directly or indirectly
liable (and including interest and penalties thereon), based on or
measured by the income or profits of any Acquired Subsidiary or the
LTI U.S. Consolidated Tax Group.
"SWM Group Landfill" means any landfill owned, occupied,
leased or operated by, or under the management or control of, an
Acquired Subsidiary as set forth in Schedule 4.12 of the Xxxxxxx
Disclosure Schedule.
"Tax" means any tax of any kind, however denominated,
including any interest, penalties, fines or other additions to tax
that may become payable in
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respect thereof or in respect of a failure to comply with any
requirement relating to any Tax Return, imposed by any United States
or Canadian federal, territorial, state, provincial, local or
non-United States or non- Canadian Governmental Entity, including all
income, gross income, gross receipts, profits, goods and services,
social security, health, old age security, Canadian Pension Plan,
Quebec Pension Plan, sales and use, ad valorem, excise, custom,
franchise, business license, property, occupation, real property
gains, payroll and employee withholding, unemployment or employment
insurance, real and personal property, stamp, environmental, transfer,
workers' compensation, payroll, severance, alternative minimum,
windfall, and capital taxes, premiums, surtaxes, charges, levies,
assessments, reassessments, and other obligations of the same or a
similar nature to any of the foregoing.
"Tax Allocation Agreements" means all contracts, agreements,
policies, practices, intercompany procedures and understandings,
whether written or oral, between any Acquired Subsidiary and any other
Person (including another Acquired Subsidiary) by which all or any
portion of any U.S. or Canadian federal, state, provincial or local
income Tax is allocated to or shared or required to be paid by any
Acquired Subsidiary.
"Tax Returns" means all tax returns, declarations, reports,
estimates, information returns and statements required to be filed
with any Taxing Authority, or provided to any partner, shareholder,
joint venturer or member under U.S. or Canadian federal, state,
provincial, local or foreign Laws (including reports with respect to
backup withholding and payments to Persons other than Taxing
Authorities), and annual tax returns or information returns on behalf
of employee benefit plans sponsored by Xxxxxxx or Allied, as the case
may be, or any of their respective ERISA Affiliates.
"Taxing Authority" means any Governmental Entity responsible
for the imposition, assessment, enforcement or collection of any Tax.
"Trading Day" means any day during the course of which the
principal securities exchange (or the Nasdaq Stock Market), as the
case may be, on which the Allied Common Stock is listed or admitted
for quotation is open for the exchange of securities.
"Unadjusted LMS Consideration" has the meaning specified in
Section 2.3.
"Unadjusted LWSC Consideration" has the meaning specified in
Section 2.3.
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"Unadjusted LWSI Consideration" has the meaning specified in
Section 2.2.
"U.S. Acquisition" means the acquisition by Allied U.S. of the
LWSI Shares from LTI as contemplated in Section 2.1.
"$" or "U.S. dollars" refers to lawful currency of the United
States.
"U.S. GAAP" means United States generally accepted accounting
principles consistently applied throughout the specified period and
the immediately preceding comparable period.
"Wages" has the meaning given such term by Section 3401(a) of
the Code.
"WARN Act" means the United States Worker Adjustment and
Retraining Notification Act of 1988.
"Waste Services Management Agreement" means the Waste Services
Management Agreement, substantially in the form attached hereto as
Exhibit F, to be entered into at the Closing between Xxxxxxx, Xxxxxxx
Environmental Services, Inc., LESL and Allied as provided in Section
3.3(iii).
1.2 Interpretation. Capitalized terms defined in this Agreement
are equally applicable to both their singular and plural forms. References to
a designated "Article" or "Section" refer to an Article or Section of this
Agreement, unless otherwise specifically indicated. In this Agreement,
"including" is used only to indicate examples, without limitation to the
indicated examples, and without limiting any generality which precedes it.
1.3 Knowledge. When a representation and warranty in Article IV
or Article V is made to the "knowledge" of a Party, it means receipt of notice
by, or actual knowledge, of any of the following officers of that Party: the
Chief Executive Officer, Chief Financial Officer, and General Counsel (or
Vice-President-Legal in the case of Allied). The "knowledge" of any Xxxxxxx
Party shall also be deemed to include such "knowledge" of the Chief Executive
Officer and Chief Financial Officer of each of LTI, LWSI, LWSC, LMT and LMS,
and the Chief Compliance Officer for environmental matters and the Director of
Human Resources of Xxxxxxx. The "knowledge" of any Allied Party shall also be
deemed to include such "knowledge" of the Chief Compliance Officer for
environmental matters and the Director of Human Resources of Allied. No
representation or warranty made by a Party may be qualified or limited by
reference to the "knowledge" of such Party unless due inquiry has actually been
made by the above referenced officers of such Party.
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ARTICLE II
THE ACQUISITIONS
2.1 Sales and Purchases of Shares. On the terms and subject to
the conditions of this Agreement:
(i) LTI agrees to sell, free of all Liens, and Allied
U.S. agrees to purchase, the LWSI Shares; and
(ii) Xxxxxxx agrees to sell, free of all Liens, and Allied
Canada agrees to purchase, the LWSC Shares and the LMS Shares.
2.2 Consideration for LWSI Shares. Subject to adjustment after
the Closing as provided in Section 2.4, the consideration payable by Allied
U.S. for the LWSI Shares (the "Unadjusted LWSI Consideration") shall be:
(i) $1,200,000,000 payable in cash at the Closing; and
(ii) 7,225,000 shares of Allied Common Stock to be issued
and delivered by Allied to LTI at the Closing.
2.3 Consideration for LWSC and LMS Shares. Subject to adjustment
after the Closing as provided in Section 2.4:
(i) the consideration payable by Allied Canada for the
LWSC Shares (the "Unadjusted LWSC Consideration") shall be (x) the
Allied Canada Debentures, (y) the Allied Warrant, and (z) 5,500,000
shares of Allied Common Stock; and
(ii) the consideration payable by Allied Canada for the
LMS Shares (the "Unadjusted LMS Consideration") shall be 1,875,000
shares of Allied Common Stock.
Pursuant to the Debenture Exchange Agreement, immediately following the
delivery by Allied Canada of the Unadjusted LWSC Consideration, Allied Finance
will purchase from Xxxxxxx, and Xxxxxxx will sell and transfer to Allied
Finance, the Allied Canada Debentures in exchange for the Allied Finance
Debentures.
2.4 Post-Closing Adjustment of Working Capital. The consideration
payable pursuant to Sections 2.2 and 2.3 shall be subject to adjustment after
the Closing as provided in this Section 2.4. On or before 20 Business Days
following the Closing, the
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Xxxxxxx Parties shall calculate and deliver to the Allied Parties a written
statement (the "Xxxxxxx Settlement Statement") setting forth the amount of the
Closing Date Working Capital.
The Xxxxxxx Settlement Statement shall be calculated by Xxxxxxx and
certified in writing by the Chief Financial Officer of Xxxxxxx. In preparing
the Xxxxxxx Settlement Statement, Xxxxxxx shall use U.S. GAAP, consistent with
the SWM Group May 31 Combined Financial Statements and the SWM Group Audited
Combined Financial Statements in all respects. Allied will grant to Xxxxxxx
reasonable access to the books and records of the Acquired Subsidiaries after
the Closing for the purpose of determining the Xxxxxxx Settlement Statement.
The Xxxxxxx Settlement Statement shall be final and binding on the
Allied Parties unless, within 30 Business Days following the date of delivery
to them of the Xxxxxxx Settlement Statement, Allied notifies Xxxxxxx in writing
(a "Notice of Objection") that Allied does not accept as correct the amount of
any calculation reflected in the Xxxxxxx Settlement Statement. If Allied
timely delivers a Notice of Objection to Xxxxxxx, then Allied and Xxxxxxx shall
respectively instruct Xxxxxx Xxxxxxxx L.L.P. and Coopers & Xxxxxxx to attempt
to reach mutual agreement as to each disputed calculation made in the Xxxxxxx
Settlement Statement. If within ten Business Days after the matter has been
referred to such accounting firms, they have not reached agreement as to all
disputed calculations, then Xxxxxx Xxxxxxxx L.L.P. and Coopers & Xxxxxxx shall
be promptly instructed by Allied and Xxxxxxx, respectively, to designate a
third accounting firm of internationally recognized standing, which (acting as
experts and not as arbitrators) shall be instructed to make, as soon as
practicable after the matter is referred to such firm, all calculations which
are in dispute, and the determination of such third accounting firm in the
matter shall be final and binding on all Parties.
Once all amounts required to be calculated under the preceding
provisions of this Section 2.4 have been finally determined under this Section
2.4, and if the Closing Date Working Capital is a deficit, then the Xxxxxxx
Parties shall pay to Allied in the manner described below the amount of such
deficit, which payment shall be accounted for, as a reduction of the Unadjusted
LWSI Consideration, the Unadjusted LWSC Consideration, the Unadjusted LMS
Consideration or a combination thereof, as the case may be. The payments
required by this Section 2.4 shall be made in cash, within two Business Days
after the amount or amounts of the adjustment or adjustments have been finally
determined as provided in this Section 2.4, by wire transfers to Allied (to
accounts designated by it in writing at least one Business Day before the day
on which the transfer is required to be made), of U.S. dollar immediately
available funds. The fees of all accounting firms engaged to make any
calculations under this Section 2.4 shall be paid by (i) Xxxxxxx if the effect
of all disputed calculations made by such accounting firms results in
adjustments in favor of Allied by $250,000 or more in
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comparison to the adjustments which would have been made had Allied accepted
the Xxxxxxx Settlement Statement or (ii) Allied in all other cases.
ARTICLE III
THE CLOSING AND RELATED MATTERS
3.1 The Closing. The respective sales and purchases of the LWSI
Shares, the LWSC Shares and the LMS Shares (the "Closing") shall take place
concurrently at the offices of Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx at 10:00 a.m. local time on the Closing Date. At the Closing:
(i) LTI shall deliver to Allied U.S. the certificates
evidencing the LWSI Shares, duly endorsed in blank or accompanied by
duly executed stock powers, and in proper form for registration in the
name of Allied U.S., against delivery by Allied U.S. of the Unadjusted
LWSI Consideration;
(ii) Xxxxxxx shall deliver to Allied Canada the
certificates evidencing the LWSC Shares, duly endorsed in blank or
accompanied by duly executed stock powers, and in proper form for
registration in the name of Allied Canada, against payment by Allied
Canada of the Unadjusted LWSC Consideration; and
(iii) Xxxxxxx shall deliver to Allied Canada the
certificates evidencing the LMS Shares, duly endorsed in blank or
accompanied by duly executed stock powers, and in proper form for
registration in the name of Allied Canada, against payment by Allied
Canada of the LMS Consideration.
All cash amounts payable by Allied U.S. at the Closing shall be
payable by wire transfers, to accounts designated in writing by Xxxxxxx at
least two Business Days before the Closing Date, of U.S. dollar funds
immediately available in Toronto.
3.2 Actions in Contemplation of Closing. On or before the Closing
Date, and in any event not later than immediately before the Closing:
(i) LWSI shall transfer to LTI, as a dividend on the LWSI
Shares, all of the issued and outstanding capital stock of Xxxxxxx
Chem-Waste, Inc., a Retained Subsidiary;
(ii) LWSC shall transfer to Xxxxxxx, by means of a
purchase, all of the issued and outstanding capital stock of LESL;
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(iii) the Acquired Subsidiaries which own the Retained Land
and the Option Assets shall transfer to Xxxxxxx, by means of a
purchase, the Retained Land and the Option Assets;
(iv) Xxxxxxx or LTI will contribute to the capital of each
of the Acquired Subsidiaries any and all Intercompany Indebtedness of
each of the Acquired Subsidiaries (net of any Intercompany Receivables
of each of the Acquired Subsidiaries) as of the Closing Date;
(v) all Tax Allocation Agreements shall be terminated as
to all Acquired Subsidiaries without any further liability thereunder
on the part of any Acquired Subsidiaries;
(vi) all Intercompany Agreements shall be terminated as to
all Acquired Subsidiaries without any further liability thereunder on
the part of any Acquired Subsidiary;
(vii) the Liens in favor of Xxxxxxx International Finance
Corporation described in Section 4.11 of the Xxxxxxx Disclosure
Schedule shall be terminated and released of record to the
satisfaction of the Allied Parties and title to the related assets
will be transferred to the Acquired Subsidiary which owns the
equitable title to such assets;
(viii) Xxxxxxx will transfer to an Acquired Canadian
Subsidiary designated at the Closing, the Leased Assets, at no cost to
Allied;
(ix) all remaining Intercompany Investments shall be
eliminated except as specifically agreed to by Allied; and
(x) Xxxxxxx shall cause to be delivered to Allied the
resignation of Xxxxxxx X. Xxxxx as sole director and President of the
Acquired Subsidiaries, and shall assume and perform in full all
obligations, agreements and commitments of any type relating to the
resignation or the employment of Xx. Xxxxx arising before the Closing.
3.3 Other Actions at the Closing. In addition to the consummation
of the Acquisitions, the following actions shall take place at the Closing:
(i) Allied, Allied Finance, Xxxxxxx and LTI shall enter
into the Xxxxxxx Subscription Agreement in substantially the form
attached as Exhibit D to this Agreement;
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(ii) Allied, Xxxxxxx and LTI shall enter into a Stock
Registration Agreement in substantially the form of Exhibit E attached
to this Agreement, pertaining to the registration of the Allied Common
Shares, the Additional Allied Common Shares, the Allied Warrant and
the Allied Warrant Shares;
(iii) Allied and Xxxxxxx shall enter into a Waste Services
Management Agreement in substantially the form of Exhibit F attached
to this Agreement;
(iv) the Xxxxxxx Sellers, the Retained Subsidiaries, the
Allied Group and the Acquired Subsidiaries shall enter into a Release
in substantially the form of Exhibit G attached to this Agreement, by
which the Xxxxxxx Sellers will release each Acquired Subsidiary from
all claims and causes of action other than those specified in Exhibit
G;
(v) Xxxxxxx and Allied Finance shall enter into the
Debenture Exchange Agreement in substantially the form of Exhibit M
attached to this Agreement;
(vi) Allied shall execute and deliver to Xxxxxxx the
Guaranties, which shall be in substantially the form of Exhibits H-1
and H-2 attached to this Agreement, by which Allied will guaranty the
payment of the Allied Finance Debentures; and
(vii) Allied, Allied Finance, Xxxxxxx and LTI shall execute
and deliver the Offset Letter Agreement in substantially the form of
Exhibit N attached to this Agreement, by which Xxxxxxx will agree to
certain offsets against the Allied Finance Debentures.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF
XXXXXXX SELLERS
The Xxxxxxx Sellers jointly and severally represent and warrant to the
Allied Parties that:
4.1 Organization of Xxxxxxx Sellers. Each Xxxxxxx Seller is a
corporation duly organized and validly existing under the Laws of Canada, in
the case of Xxxxxxx, or duly organized, validly existing and in good standing
under the Laws of the State of Delaware, in the case of LTI.
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4.2 Authority Relative to this Agreement. Each Xxxxxxx Party has
the requisite corporate power to enter into and perform its obligations under
this Agreement and each Ancillary Agreement to which it will be a party. The
execution and delivery of this Agreement and each Ancillary Agreement to which
the respective Xxxxxxx Parties will be parties, the consummation of the
Acquisitions, in the case of the Xxxxxxx Sellers, and the other transactions
contemplated in Articles II and III, in the case of all Xxxxxxx Parties, have
been duly authorized by the respective Boards of Directors of the Xxxxxxx
Parties, and no other corporate proceedings on the part of any Xxxxxxx Party,
including any approval by the stockholders of Xxxxxxx, are necessary to
authorize this Agreement, any Ancillary Agreement to which any Xxxxxxx Party
will be a party, the consummation of the Acquisitions, or the other
transactions contemplated in Articles II and III. This Agreement has been duly
executed and delivered by each Xxxxxxx Party. Each Ancillary Agreement
required to be executed and delivered by a Xxxxxxx Party at the Closing will
be, upon its execution and delivery as provided in Section 3.3 or elsewhere in
this Agreement, duly executed and delivered by such Xxxxxxx Party. Assuming
the valid authorization, execution and delivery of this Agreement (and each
Ancillary Agreement to which an Allied Party will be a party) by each Allied
Party, this Agreement is, and each Ancillary Agreement to which a Xxxxxxx Party
is a party will be, upon its execution and delivery at the Closing as provided
in Section 3.3 or elsewhere in this Agreement, a valid and binding obligation
of such Xxxxxxx Party, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting creditors' rights generally
or by equitable principles.
4.3 No Violations. The execution, delivery and performance of
this Agreement and the applicable Ancillary Agreements by the respective
Xxxxxxx Sellers and the consummation of the Acquisitions and the other
transactions contemplated in Articles II and III will not:
(i) constitute a breach or violation of or default under
the charter or bylaws (or similar organizational documents) or
internal rules or regulations governing the conduct of corporate
actions of any Xxxxxxx Party or any Acquired Subsidiary or any Law
applicable to any Xxxxxxx Party or any Acquired Subsidiary; or
(ii) except as accurately reflected in Section 4.3 of the
Xxxxxxx Disclosure Schedule, violate or conflict with, or result in a
breach of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or
result in a right of termination under, or result in the creation of
any Lien upon the LWSI Shares, the LWSC Shares, the LMS Shares or any
of the assets or properties of any Acquired Subsidiary under, any
contract, indenture, loan document, license, permit, order, decree or
instrument
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to which any Xxxxxxx Seller or any Acquired Subsidiary is a party or
by any of them or their assets or properties are bound.
4.4 Consents and Approvals. No consent, order, approval, waiver
or authorization of, or registration, application, declaration or filing with,
any Governmental Entity or other Person is required with respect to any Xxxxxxx
Party or any Acquired Subsidiary in connection with the execution and delivery
of this Agreement or any Ancillary Agreement, the consummation of the
Acquisitions, or the other transactions contemplated in Articles II and III,
except for:
(i) the HSR Act, Competition Act and Investment Canada
Act filings and approvals contemplated in this Agreement;
(ii) the consents and approvals described on Schedule 4.4
of the Xxxxxxx Disclosure Schedule; and
(iii) other cases, considered individually and in the
aggregate, in which any failure to make any such registration,
application, declaration or filing or obtain any such consent, order,
approval, waiver or other authorization could not have a Material
Adverse Effect on the Acquired Subsidiaries or the Xxxxxxx Sellers.
4.5 Acquired Subsidiaries. Section 4.5 of the Xxxxxxx Disclosure
Schedule sets forth with respect to each Acquired Subsidiary (i) its
jurisdiction of incorporation, (ii) each jurisdiction in which it is qualified
to do business as a foreign corporation, (iii) its authorized, issued and
outstanding shares of capital stock, and (iv) the holder or holders of all of
its issued and outstanding shares of capital stock. Each Acquired Subsidiary
is a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has full authority and
corporate power to conduct its business as it is currently being conducted.
Each Acquired Subsidiary is duly qualified to do business, and in good
standing, in each jurisdiction where the nature of its properties or business
requires such qualification, except for failures to be so qualified which could
not, individually or in the aggregate, have a Material Adverse Effect on the
Acquired Subsidiaries.
All of the issued and outstanding shares of capital stock of each
Acquired Subsidiary are validly issued, fully paid and nonassessable, and are
owned of record and beneficially, and free of any Liens, by Xxxxxxx, LTI or
another Acquired Subsidiary (as reflected in Schedule 4.5 of the Xxxxxxx
Disclosure Schedule), except as otherwise noted in Section 4.5 of the Xxxxxxx
Disclosure Schedule with respect to LMT (as to which all other stockholders,
and their percentage share of ownership, are identified in Section 4.5 of the
Xxxxxxx Disclosure Schedule). There are no preemptive rights or outstanding
subscriptions, options, warrants, calls, rights, convertible securities,
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obligations to make capital contributions or advances, voting trust
arrangements, shareholders' agreements (other than as noted in Section 4.5 of
the Xxxxxxx Disclosure Schedule with respect to LMT) or other agreements,
commitments or understandings relating to the capital stock of any Acquired
Subsidiary.
The Xxxxxxx Sellers will deliver to the Allied Parties prior to
Closing true and correct copies of the charter and bylaws (or similar
organizational documents) of each Acquired Subsidiary. Each Acquired Canadian
Subsidiary is a "private company" within the meaning of Ontario Securities Act.
4.6 No Other Subsidiaries. No Acquired Subsidiary has any
Subsidiary which is not another Acquired Subsidiary or a Retained Subsidiary.
Except as described in Section 4.6 of the Xxxxxxx Disclosure Schedule, and
except for other Acquired Subsidiaries and Retained Subsidiaries, no Acquired
Subsidiary owns or is obligated to acquire any investment in any other
corporation, partnership, joint venture or other business entity.
4.7 Conduct of Solid Waste Business. The Xxxxxxx Group is engaged
in the Solid Waste Business only through the Acquired Subsidiaries, and neither
Xxxxxxx, any Retained Subsidiary, nor any other member of the Xxxxxxx Group
conducts any operations associated with, or owns any assets or properties used
in, or holds any permits or licenses used in, the Solid Waste Business, except
for operations which after the Closing Date will be conducted only as permitted
under the Waste Management Services Agreement. None of the Acquired
Subsidiaries is or has been engaged in any business other than the Solid Waste
Business or owns or has owned any assets or properties which are used in any
business other than the Solid Waste Business.
4.8 Financial Statements. The Xxxxxxx Sellers have delivered to
the Allied Parties:
(i) unaudited consolidated balance sheets of the LWSI
Group Subsidiaries (prepared for the LWSI Group Subsidiaries as a
separate consolidated group of corporations for financial reporting
purposes) at August 31, 1995 and May 31, 1996, and the related
unaudited consolidated statements of operations, stockholder's equity
and cash flows for the LWSI Group Subsidiaries (similarly prepared)
for the respective years ended August 31, 1994 and 1995 and the nine
months ended May 31, 1996;
(ii) unaudited combined balance sheets of the LWSC Group
Subsidiaries and LMS and its Subsidiary (prepared for the LWSC Group
Subsidiaries and LMS and its Subsidiary as a separate combined group
of corporations for financial reporting purposes) at August 31, 1995
and May 31, 1996, and the related unaudited combined statements of
operations, stockholder's
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equity and cash flows for the LWSC Group Subsidiaries and LMS and its
Subsidiary (similarly prepared) for the respective years ended August
31, 1994 and 1995 and the nine months ended May 31, 1996; and
(iii) unaudited combined balance sheets of the LWSI Group
Subsidiaries, the LWSC Subsidiaries and LMS and its Subsidiary at
August 31, 1994, August 31, 1995 and May 31, 1996, and the related
unaudited combined statements of operations, stockholder's equity and
cash flows of the LWSI Group Subsidiaries, the LWSC Group Subsidiaries
and LMS and its Subsidiary for the respective years ended August 31,
1994 and 1995 and the nine months ended May 31, 1996, together with
the related notes thereto.
The SWM Group Financial Statements described in clauses (i) and (ii)
above are collectively referred to in this Agreement as the "SWM Group
Consolidated Financial Statements," the SWM Group Financial Statements
described in clause (iii) above are referred to in this Agreement as the "SWM
Group Combined Financial Statements" and the SWM Group Combined Financial
Statements at May 31, 1996 and for the nine months then ended are referred to
in this Agreement as the "SWM Group May 31 Combined Financial Statements." All
SWM Group Financial Statements are stated in U.S. dollars.
The SWM Group Consolidated Financial Statements have been prepared in
accordance with U.S. GAAP, except for compliance with SFAS 109 and the omission
of explanatory footnote disclosures. The SWM Group Combined Financial
Statements and the SWM Group May 31 Combined Financial Statements have been
prepared by combining the relevant SWM Group Consolidated Financial Statements
in accordance with U.S. GAAP applicable to the preparation of combined
financial statements.
All SWM Group Financial Statements fairly present in all material
respects the separate company, consolidated or combined, as the case may be,
financial position of the respective Acquired Subsidiaries or groups of
Acquired Subsidiaries covered thereby at the respective dates thereof, and the
results of their separate company or consolidated or combined, as the case may
be, operations, stockholder's equity and (except as to the SWM Group Separate
Company Financial Statements) cash flows for the respective Acquired
Subsidiaries or groups of Acquired Subsidiaries covered thereby for the
respective periods indicated, in accordance with U.S. GAAP except for
compliance with SFAS 109 and the omission of explanatory footnote disclosures
as noted above.
4.9 Absence of Certain Changes. Except as set forth in Section
4.9 of the Xxxxxxx Disclosure Schedule, since May 31, 1996, the Acquired
Subsidiaries have conducted their businesses only in the ordinary course,
consistent with past practice, and there has not occurred a Material Adverse
Effect with respect to the Acquired
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Subsidiaries or any event that could result in a Material Adverse Effect with
respect to the Acquired Subsidiaries.
4.10 No Undisclosed Liabilities. Except as disclosed in the SWM
Group Financial Statements or as set forth in Sections 4.10 and 4.14 of the
Xxxxxxx Disclosure Schedule, no Acquired Subsidiary has any liabilities or
obligations, known or unknown, fixed or contingent, other than (i) those
liabilities and obligations (other than for borrowed money) arising since May
31, 1996 in the ordinary course of its business and consistent with its past
practice, (ii) liabilities and obligations other than for borrowed money
arising after the date of this Agreement without violation of Sections 6.1 and
6.2, or (iii) liabilities and obligations that, individually or in the
aggregate, could not result in a Material Adverse Effect on the Acquired
Subsidiaries.
4.11 Acquired Subsidiary Properties. The Acquired Subsidiaries
have good and marketable title to their respective properties and assets,
including those reflected in the SWM Group May 31 Combined Financial Statements
(other than properties and assets disposed of in the ordinary course of
business since May 31, 1996, which in the aggregate are not material), free of
all Liens except Permitted Liens and Liens disclosed in Section 4.11 of the
Xxxxxxx Disclosure Schedule.
4.12 Landfills. Section 4.12 of the Xxxxxxx Disclosure Schedule
lists each SWM Group Landfill and accurately describes each such landfill by
its city or county and state or province of location, total acreage, permitted
acreage, estimated remaining permitted capacity in tons, estimated or mandated
closure date, and estimated closure, post-closure and reclamation liability at
its projected or mandated closure date (computed at the closure date with and
without discount to present value) and any other recorded or unrecorded
accruals, contingent or otherwise, or reserves related to landfill liabilities
of any type. Section 4.12 of the Xxxxxxx Disclosure Schedule also lists each
landfill not owned or operated by an Acquired Subsidiary, but to which any
Acquired Subsidiary hauls solid waste.
4.13 Taxes and Tax Returns. Except as described in Section 4.13 of
the Xxxxxxx Disclosure Schedule:
(i) all Tax Returns required to be filed with any Taxing
Authority with respect to any Pre-Closing Tax Period by or on behalf
of the Acquired Subsidiaries (including the U.S. consolidated income
Tax Returns of LTI) have been duly filed on a timely basis in
accordance with all applicable Laws, or will be timely filed in
accordance with Section 12.2;
(ii) at the time of their filings all such Tax Returns
were or will be complete and correct;
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(iii) there are no Liens for Taxes upon any assets of any
Acquired Subsidiary, except Liens for Taxes not yet due for current
Tax periods ending on or after the Closing Date;
(iv) there are no outstanding deficiencies, assessments or
written proposals for the assessment of Taxes proposed, asserted or
assessed against any Acquired Subsidiary, or for which any Acquired
Subsidiary could be directly or indirectly liable and there is no
basis for any additional assessment or reassessment for any Taxes for
which adequate provision has not been made in the books and records of
the Acquired Subsidiaries;
(v) no extension of the statute of limitations or waiver
of normal reassessment periods on the assessment of any Taxes has been
granted to or on behalf of any Acquired Subsidiary;
(vi) no LWSC Group Subsidiary is or has ever been a
controlled foreign corporation as defined by Code Section 957;
(vii) each Acquired U.S. Subsidiary will be a member of the
LTI U.S. Consolidated Tax Group on the Closing Date;
(viii) Xxxxxxx and its Affiliates have never owned and do
not now own any shares of Allied, any of its Affiliates or any
predecessor thereof;
(ix) no Acquired Canadian Subsidiary has had a permanent
establishment or income effectively connected with the conduct of a
trade or business in the United States, and no Acquired U.S.
Subsidiary has had a permanent establishment or income effectively
connected with the conduct of a trade or business in Canada; and
(x) no Acquired Subsidiary is a member of any unitary or
combined group for state or provincial tax purposes.
4.14 Litigation. Except as disclosed in Section 4.14 of the
Xxxxxxx Disclosure Schedule, there is no suit, action, investigation or
proceeding pending or, to the knowledge of the Xxxxxxx Sellers, threatened
against any of the Acquired Subsidiaries at law or in equity before or by any
Governmental Entity or before any arbitrator or mediator of any kind, that
could have a Material Adverse Effect on the Acquired Subsidiaries, and there is
no judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator or mediator to which any Acquired Subsidiary (or any of its assets
or properties) is subject that could have a Material Adverse Effect on the
Acquired Subsidiaries. There is no suit, action, investigation or proceeding
pending or, to the knowledge of the Xxxxxxx Sellers, threatened against either
Xxxxxxx Seller at law
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or in equity before or by any Governmental Entity or before any arbitrator or
mediator of any kind, that could have a Material Adverse Effect on the Xxxxxxx
Sellers, and there is no judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator or mediator to which either Xxxxxxx Seller is
subject that could have a Material Adverse Effect on the Xxxxxxx Sellers.
Neither Xxxxxxx Seller has knowledge of any grounds on which any suit, action,
investigation or proceeding of the nature referred to in this Section 4.14
might be commenced with any reasonable likelihood of success.
4.15 Environmental Matters. Except as described in Section 4.15 of
the Xxxxxxx Disclosure Schedule (as may be updated on or before 5 Business Days
before the Closing), and except to the extent that the inaccuracy of any of the
following, individually or in the aggregate, could not have a Material Adverse
Effect on the Acquired Subsidiaries:
(i) the Acquired Subsidiaries hold, and are in compliance
with and have been in compliance with, all Environmental Permits, and
are otherwise in compliance and have been in compliance with, all
applicable Environmental Laws, and there is no condition that could
prevent or interfere with compliance by the Acquired Subsidiaries with
all Environmental Laws;
(ii) no modification, revocation, reissuance, alteration,
transfer or amendment of any Environmental Permit, or any review by,
or approval of, any Governmental Entity or other Person of any
Environmental Permit is required in connection with the execution or
delivery of this Agreement or any Ancillary Agreement, the
consummation of the Acquisitions, or the operation of the business of
the Acquired Subsidiaries immediately after the Closing;
(iii) no Acquired Subsidiary has received any Environmental
Claim, nor has any Environmental Claim been threatened against any
Acquired Subsidiary;
(iv) no Acquired Subsidiary has entered into, agreed to or
is subject to any outstanding judgment, decree, order or other
directive issued by, or consent arrangement with, any Governmental
Entity under any Environmental Law, including any such judgment,
decree, order or other directive relating to compliance with any
Environmental Law or to the investigation, cleanup, remediation or
removal of Hazardous Substances;
(v) to the knowledge of the Xxxxxxx Sellers, there are no
circumstances that could give rise to liability under any agreement
with any Person or by operation of law by or under which any Acquired
Subsidiary would be required to defend, indemnify, hold harmless, or
otherwise be
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responsible for any violation by or other liability or expense of such
Person, or alleged violation by or other liability or expense of such
Person, arising under any Environmental Law;
(vi) to the knowledge of the Xxxxxxx Sellers, there are no
other circumstances or conditions that could give rise to liability or
obligation of any Acquired Subsidiary under any Environmental Law; and
(vii) the liabilities and reserves reflected on the SWM
Group May 31 Combined Financial Statements adequately provide for, in
accordance with U.S. GAAP (x) all future claims and costs for closure,
intermediate capping, post-closure monitoring, investigation and
maintenance, reclamation, remediation, restoration and cleanup of all
SWM Group Landfills (or any landfill or other facility previously
owned, occupied, leased or operated by, or previously under the
management or control of, any Acquired Subsidiary or any landfill to
which an Acquired Subsidiary has transported waste), and (y) all
Environmental Claims against the respective groups of Acquired
Subsidiaries covered by the SWM Group May 31 Combined Financial
Statements.
4.16 Governmental Licenses and Permits; Compliance with Laws.
Except as described in Section 4.16 of the Xxxxxxx Disclosure Schedule, no
Acquired Subsidiary has received any notice of any revocation or modification
or any license, certification, tariff, permit, registration, exemption,
approval or other authorization by any Governmental Entity, the revocation or
modification of which has had or is reasonably likely to have a Material
Adverse Effect on the Acquired Subsidiaries. The business of each Acquired
Subsidiary complies and has been conducted in compliance with all applicable
Laws, except for violations or failure to comply, if any, that, individually or
in the aggregate, could not have a Material Adverse Effect on the Acquired
Subsidiaries.
4.17 Labor Matters. Section 4.17 of the Xxxxxxx Disclosure
Schedule lists and describes each collective bargaining agreement covering
employees of any Acquired Subsidiary. Except as disclosed in Section 4.17 of
the Xxxxxxx Disclosure Schedule, (i) no Acquired Subsidiary is a party to or
bound by any collective bargaining or similar agreement with any labor
organization applicable to employees of any Acquired Subsidiary, (ii) there is
no labor strike, dispute, slowdown, work stoppage, unresolved material labor
union grievance or labor arbitration proceedings pending or, to the knowledge
of the Xxxxxxx Sellers, threatened against any Acquired Subsidiary, and (iii)
to the knowledge of the Xxxxxxx Sellers, there are no current union organizing
activities among employees of any Acquired Subsidiary.
Since the enactment of the WARN Act, no Acquired Subsidiary has
effectuated (i) a "plant closing" (as defined in the WARN Act) affecting any
site of employment
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or one or more facilities or operating units within any site of any employment
or facility of an Acquired Subsidiary. No Acquired Subsidiary has been
affected by any transaction or engaged in layoffs or employment terminations
sufficient in number to trigger application of any similar Canadian federal,
state, provincial or local Law. Except as set forth in Section 4.17 of the
Xxxxxxx Disclosure Schedule, no employees of any Acquired Subsidiary have
suffered an "employment loss" (as defined in the WARN Act) since December 31,
1995.
4.18 Employee Benefit Plans. Section 4.18 of the Xxxxxxx
Disclosure Schedule sets forth each retirement, pension, bonus, stock purchase,
profit sharing, stock option, deferred compensation, severance or termination
pay, insurance, medical, hospital, dental, vision care, drug, sick leave,
disability, salary continuation, legal benefits, unemployment benefits,
vacation, incentive or other compensation plan or arrangement or other employee
benefit which is maintained, or otherwise contributed to or required to be
contributed to, by any of the Acquired Subsidiaries, any member of the Xxxxxxx
Group or any ERISA Affiliate of Xxxxxxx for the benefit of employees or former
employees and directors or former directors of any of the Acquired Subsidiaries
and their spouses, dependents or beneficiaries (the "Xxxxxxx Employee Plans").
True and correct copies of each of the Xxxxxxx Employee Plans have been made
available to the Purchaser, along with the most recent annual report for the
Plan, any trust agreement relating to the Plan and the most recent summary plan
description, actuarial report and determination letter for the Plan. Each of
the Acquired Subsidiaries has complied, and currently is in compliance, both as
to form and operation, in all material respects, with the applicable provisions
of ERISA and each other Law or regulation imposed or administered by any
Governmental Entity with respect to each of the Xxxxxxx Employee Plans. Except
as set forth in Section 4.18 of the Xxxxxxx Disclosure Schedule, none of the
Acquired Subsidiaries has at any time maintained, adopted, established,
contributed to or been required to contribute to, otherwise participated in or
been required to participate in, or had any liability with respect to, any
"employee benefit plan" within the meaning of section 3(3) of ERISA. All
Xxxxxxx Employee Plans providing pension or retirement benefits or obligations
to current or former employees or their spouses, dependents and beneficiaries
are referred to collectively as "Xxxxxxx Pension Plan" and identified on the
Xxxxxxx Disclosure Schedule. Except as set forth in Section 4.18 of the
Xxxxxxx Disclosure Schedule, no provision concerning the Xxxxxxx Pension Plan
is contained in any collective bargaining agreement affecting any current or
former employees of any Acquired Subsidiary. Each Xxxxxxx Pension Plan that is
required to be qualified under Section 401(a) and Section 501(a) of the Code
has received a determination letter to such effect and no event has occurred
which is reasonably likely to result in the disqualification of any such
Xxxxxxx Pension Plan. The Xxxxxxx Pension Plan is registered under, and is in
material compliance with, applicable Law. All contributions to, and payments
from, each Xxxxxxx Employee Plan which may have been required to be made in
accordance with the terms of any such Xxxxxxx Employee Plan and, where
applicable, the Laws which
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govern such Xxxxxxx Employee Plan, have been made in a timely manner, and each
Xxxxxxx Employee Plan has otherwise at all times been administered in
accordance with its terms and applicable Law in all material respects. All
material reports, Tax Returns and similar documents with respect to any Xxxxxxx
Employee Plan required to be filed with any Governmental Entity or distributed
to any Xxxxxxx Employee Plan participant have been duly filed on a timely basis
or distributed. There are no pending investigations by any Governmental Entity
involving or relating to an Xxxxxxx Employee Plan, no threatened or pending
claims (except for claims for benefits payable in the normal operation of the
Xxxxxxx Employee Plans), suits or proceedings against any Xxxxxxx Employee Plan
or asserting any rights or claims to benefits under any Xxxxxxx Employee Plan
which could give rise to a liability nor, to the knowledge of the Xxxxxxx
Sellers, are there any facts that could give rise to any liability in the event
of any such investigation, claim, suit or proceeding. No notice has been
received by either of the Xxxxxxx Sellers or any of the Acquired Subsidiaries
of any complaints or other proceedings of any kind involving any of the
Acquired Subsidiaries or any of the employees of any of the Acquired
Subsidiaries or other potential claimants before any Governmental Entity
relating to any Xxxxxxx Employee Plan or to any of the Acquired Subsidiaries
and to the knowledge of the Xxxxxxx Sellers, there is no basis for any such
claims. Except as set forth in Section 4.18 of the Xxxxxxx Disclosure
Schedule, the assets of each Xxxxxxx Employee Plan are at least equal to the
liabilities, contingent or otherwise, of such Xxxxxxx Employee Plan on a plan
termination basis, and each Xxxxxxx Pension Plan is fully funded on a going
concern and solvency basis in accordance with its terms, applicable actuarial
recommendations and applicable Law. Neither Xxxxxxx nor any of the Acquired
Subsidiaries contribute to or have an obligation to contribute to, and, to the
knowledge of Xxxxxxx, have not within 6 years prior to the date of this
Agreement contributed to or had an obligation to contribute to, a
multi-employer plan within the meaning of Section 3(37) of ERISA. No event has
occurred and, to the knowledge of the Xxxxxxx Sellers, there exists no
condition or set of circumstances in connection with which Allied, any of its
affiliates or the Acquired Subsidiaries could be subject to any liability under
the terms of each Xxxxxxx Employee Plan or under any applicable law of any
Governmental Entity, other than any condition or set of circumstances that
could not have a Material Adverse Effect on the Acquired Subsidiaries. In
connection with the consummation of the transactions contemplated by this
Agreement, no payments have or will be made under a Xxxxxxx Employee Plan
which, in the aggregate, would be nondeductible under Section 280G of the Code.
The beneficiaries under all Xxxxxxx Employee Plans shall consist only
of employees or former employees and directors or former directors of any of
the acquired subsidiaries and their spouses, dependents or beneficiaries. No
acquired subsidiary shall have any liability under the Xxxxxxx Employee Stock
Option Plan. The amount to fund the Supplemental Executive Retirement Plan
shall not exceed $300,000.00
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4.19 Material Contracts. Section 4.19 of the Xxxxxxx Disclosure
Schedule lists all of the following written or oral contracts, agreements and
commitments (collectively, the "SWM Group Contracts"):
(i) all employment, consulting or personal services
agreements or contracts with any present or former officer, director
or employee of any Acquired Subsidiary who has an annual salary of
$125,000 or more (determined by using the currency in which they are
paid;
(ii) all solid waste management agreements and contracts
(including those relating to the receipt, transport, disposal or other
management of waste) between any Acquired Subsidiary and any
municipality or other Governmental Entity or Person which call for
annual payments to or by any Acquired Subsidiary of $1,000,000 or
more, which list includes the term of such agreements or contracts;
(iii) all contracts, agreements, agreements in principle,
letters of intent and memoranda of understanding which call for or
contemplate the future disposition (including restrictions on transfer
and rights of first offer or refusal) or acquisition of (or right to
acquire) any interest in any business enterprise, and all contracts,
agreements and commitments relating to the future disposition of a
material portion of the assets and properties of any Acquired
Subsidiary other than in the ordinary course of business;
(iv) all contracts, agreements with, or commitments to,
any Person containing any provision or covenant relating to the
indemnification or holding harmless by any Acquired Subsidiary of any
Person which could result in a liability to an Acquired Subsidiary of
$500,000 or more;
(v) all leases or subleases of real property used in the
conduct of business of any Acquired Subsidiary providing for annual
rental payments to be paid by or on behalf of an Acquired Subsidiary
of more than $500,000 in each case;
(vi) all contracts or agreements committing any Acquired
Subsidiary to make a capital expenditure in excess of $500,000;
(vii) all guaranties or other commitments or undertakings
under which any Acquired Subsidiary may be primarily, secondarily,
contingently or conditionally liable for or in respect of (or which
creates, constitutes or evidences a Lien on any of the assets or
properties of any Acquired Subsidiary which secures the payment or
performance of) any present or future liability or
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obligation of or to any member of the Xxxxxxx Group or any officer or
director of the Xxxxxxx Group;
(viii) all Xxxxxxx Guaranties;
(ix) all contracts, agreements and undertakings with any
Governmental Entity or other Person which contain any provision or
covenant limiting (x) the ability of any Acquired Subsidiary to engage
in any line of business, to compete with any Person, to do business
with any Person or in any location or to employ any Person or (y) the
ability of any Person to compete with or obtain products or services
from any Acquired Subsidiary;
(x) all outstanding proxies, powers of attorney or
similar delegations of authority granted by any Acquired Subsidiary to
any member of the Xxxxxxx Group or any other Person; and
(xi) all Intercompany Agreements.
The Xxxxxxx Parties shall deliver to the Allied Parties within 15 days
of the Closing a true and correct copy of each SWM Group Contract. Each of the
SWM Group Contracts is in full force and effect and constitutes a legal, valid
and binding obligation of the Acquired Subsidiary which is a party to it, and,
to the knowledge of the Xxxxxxx Sellers, of each other Person that is a party
to it. Except as set forth in Section 4.19 of the Xxxxxxx Disclosure Schedule,
no Acquired Subsidiary is, and, to the knowledge of the Xxxxxxx Sellers, no
other party to any SWM Group Contract is, in violation, breach or default of
such SWM Group Contract or, with or without notice or lapse of time or both,
would be in violation, breach or default of any such SWM Group Contract, except
for any violation, breach or default which, individually or in the aggregate,
could not result in a Material Adverse Effect on the Acquired Subsidiaries.
Except as set forth in Section 4.19 of the Xxxxxxx Disclosure Schedule, no SWM
Group Contract provides that any party thereto other than an Acquired
Subsidiary may terminate such SWM Group Contract by reason of the execution of
this Agreement or the consummation of the Acquisitions.
4.20 Bank Accounts. Section 4.20 of the Xxxxxxx Disclosure
Schedule lists each bank, trust company or similar institution with which any
Acquired Subsidiary maintains an account or safe deposit box, and accurately
identifies each such account or safe deposit box by its number or other
identification and the names of all individuals authorized to draw thereon or
have access thereto.
4.21 Officers and Directors. Section 4.5 of the Xxxxxxx Disclosure
Schedule accurately lists by name and title all officers and directors of each
Acquired Subsidiary.
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4.22 Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission from any Allied Party or
any Acquired Subsidiary in connection with this Agreement or the Acquisitions
based upon arrangements made by or on behalf of any Xxxxxxx Party.
4.23 Aggregation. The imperfections, defects, orders, actions,
defaults, liabilities, inaccuracies and other items omitted from disclosure in
connection with the representations and warranties made in Sections 4.1 through
4.22 on grounds of immateriality, lack of knowledge or failure to have a
Material Adverse Effect do not and could not, taken as a whole, constitute a
Material Adverse Effect on the Xxxxxxx Sellers or the Acquired Subsidiaries.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF
ALLIED PARTIES
The Allied Parties jointly and severally represent and warrant to the
Xxxxxxx Sellers that:
5.1 Organization of Allied Parties. Each Allied Party is a
corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware, or, in the case of Allied Canada, the Laws of
Canada. Each Allied Party has full authority and corporate power to conduct
its business as it is currently being conducted and as to be conducted
following consummation of the Acquisitions. Each Allied Party is duly
qualified to do business, and in good standing, in each jurisdiction where the
nature of its properties or business requires such qualification.
5.2 Authority Relative to this Agreement. Each Allied Party has
the requisite corporate power and authority to enter into and perform its
obligations under this Agreement and each Ancillary Agreement to which it will
be a party, and, in the case of Allied, the Allied Warrant, and in the case of
Allied Canada, the Allied Canada Debentures. The execution and delivery of
this Agreement and each Ancillary Agreement to which the respective Allied
Parties will be parties, the consummation of the Acquisitions, the issuance or
delivery of Allied Securities, and the other transactions contemplated in
Articles II and III have been duly authorized by the respective Boards of
Directors of the Allied Parties, and except for the approval by Allied's
stockholders of the issuance by Allied of the Allied Common Shares in
connection with the U.S. Acquisition, the issuance of Allied Warrant Shares
upon any exercises of Allied Warrant in accordance with its terms and the
issuance of the Additional Allied Common Shares, no other corporate proceedings
on the part of any Allied Party are necessary to
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authorize this Agreement, any Ancillary Agreement to which any Allied Party
will be a party, the issuance and delivery of the Allied Securities, the
consummation of the Acquisitions, or the other transactions contemplated in
Articles II and III. This Agreement has been duly executed and delivered by
each Allied Party. The Allied Debentures, the Allied Warrant and each
Ancillary Agreement required to be executed and delivered by an Allied Party at
the Closing will be, upon its or their execution and delivery as provided in
Section 3.3, duly executed and delivered by such Allied Party. Assuming the
valid authorization, execution and delivery of this Agreement (and each
Ancillary Agreement to which a Xxxxxxx Party will be a party) by each Xxxxxxx
Party, this Agreement is, and upon their issuance and delivery at the Closing,
the Allied Debentures and the Allied Warrant will be, and upon its execution
and delivery by an Allied Party, each Ancillary Agreement to which an Allied
Party is a party will be, valid and binding obligations of each Allied Party
(or Allied in the case of the Allied Warrant or Allied Canada in the case of
the Allied Canada Debentures), enforceable in accordance with their terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other law relating to or affecting creditors'
rights generally or by equitable principles.
5.3 Status of Allied Common Shares. Upon their issuance as
provided in Sections 2.2 and 2.3, the Allied Common Shares will be, and upon
any issuance thereof by the Company in accordance with the Allied Warrant or
the Xxxxxxx Subscription Agreement, the Additional Allied Common Shares will
be, duly authorized, validly issued, fully paid and nonassessable.
5.4 No Violations. The execution, delivery and performance of
this Agreement and the applicable Ancillary Agreements by the respective Allied
Parties, the issuance and delivery by Allied of the Allied Securities, and the
consummation of the Acquisitions and the other transactions contemplated in
Articles II and III will not:
(i) constitute a breach or violation of or default under
the charter or bylaws (or similar organizational documents) or
internal rules or regulations governing the conduct of corporate
actions of any Allied Party or any of their respective Subsidiaries or
any Law applicable to any Allied Party or any of their respective
Subsidiaries; or
(ii) except as accurately reflected in Section 5.4 of the
Allied Disclosure Schedule, violate or conflict with or result in a
breach of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under or result in
the termination of, or accelerate the performance by, or result in a
right of termination under, or result in the creation of any Lien upon
the assets or properties of Allied or any of its Subsidiaries under,
any contract, indenture, loan document, license, permit, order, decree
or
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instrument to which any Allied or any of its Subsidiaries is a party
or by which any of them or their assets or properties are bound.
5.5 Consents and Approval. No consent, order, approval, waiver,
authorization of, or registration, application, declaration or filing with, any
Person is required with respect to any Allied Party or any Subsidiary of Allied
in connection with the execution and delivery of this Agreement, the issuance
of the Allied Securities, the consummation of the Acquisitions, and the other
transactions contemplated in Articles II and III, except for:
(i) the HSR Act, Competition Act, and Investment Canada
Act filings and approvals contemplated in this Agreement;
(ii) the consents and approvals described on Section 5.5
of the Allied Disclosure Schedule;
(iii) the approval by Allied's stockholders, as
contemplated in Section 7.5; and
(iv) other cases, considered individually and in the
aggregate, in which any failure to make such registration,
application, declaration or filing or to obtain any such consent,
order, approval, waiver or other authorization could not have a
Material Adverse Effect on Allied and its Subsidiaries.
5.6 Allied Capitalization. The authorized capital stock of Allied
consists of (i) 100 million shares of Allied Common Stock, and (ii) 10 million
shares of Preferred Stock, $.10 par value, of Allied ("Allied Preferred
Stock"). At September 10, 1996, 58,859,811 shares of Allied Common Stock, and
14,943 shares of Allied Preferred Stock, were issued and outstanding, all of
which were duly and validly issued, fully paid and nonassessable. Except as
set forth in the Allied SEC Filings or Section 5.6 of the Allied Disclosure
Schedule, no subscription, warrant, option, convertible security, stock
appreciation or other right (contingent or other) to purchase or acquire any
shares of any class of capital stock of Allied or any of its Subsidiaries is
authorized or outstanding and there is not outstanding any commitment of Allied
or any of its Subsidiaries to issue any shares, warrants, options or other such
rights or to distribute to holders of any class of its capital stock any
evidences of indebtedness or assets. Except as set forth in the Allied SEC
Filings, neither Allied nor any of its Subsidiaries has any contingent or other
obligation to purchase, redeem or otherwise acquire any shares of its capital
stock or any interest therein or to pay any dividend or make any other
distribution in respect thereof. Except as set forth in the Allied SEC
Filings, Allied is not a party to any voting agreement, voting trust or similar
agreement or arrangement relating to its capital stock or any agreement or
arrangement relating to or providing for registration rights with respect to
its capital stock.
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5.7 Allied Subsidiaries. Each Subsidiary of Allied is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has full authority and corporate
power to conduct its business as it is presently being conducted. Each
Subsidiary of Allied is duly qualified to do business, and in good standing, in
each jurisdiction where the nature of its properties or business requires such
qualification, except for failures to be so qualified which could not,
individually or in the aggregate, have Material Adverse Effect on Allied and
its Subsidiaries. Except as accurately disclosed in the Allied SEC Filings,
all of the outstanding shares of capital stock of each Subsidiary of Allied are
validly issued, fully paid and nonassessable and are owned of record and
beneficially by Allied or a wholly owned direct or indirect Subsidiary of
Allied. Except as set forth in the Allied SEC Filings, there are no
outstanding subscriptions, options, warrants, calls, rights, convertible
securities, obligation to make capital contributions or advances, voting trust
arrangements, shareholder's agreements or other agreements, commitments or
understandings relating to the issued and outstanding capital stock of any
Subsidiary of Allied. Except as described in Section 5.7 of the Allied
Disclosure Schedule, Allied does not, directly or indirectly, have any equity
investment in any corporation, partnership or joint venture or other business
entity.
5.8 SEC Filings. Allied has filed all forms, reports and
documents required to be filed with the SEC since May 15, 1996, the date on
which Allied's registration statement on Form S-4 (No. 333-5585) (the "Allied
Registration Statement") became effective, and Allied has made available to the
Xxxxxxx Sellers true and complete copies of (i) the Allied Registration
Statement, (ii) Allied's Annual Report on Form 10-K for the year ended December
31, 1995, and (iii) all other reports, statements and registration statements
(including Current Reports on Form 8-K) filed by Allied with the SEC since
December 31, 1995 (collectively, the "Allied SEC Filings"). The Allied SEC
Filings (including all financial statements or schedules included in them) (i)
were prepared in compliance in all material respects with the requirements of
the Securities Act or the Exchange Act, as the case may be, and (ii) did not at
the time of filing (or if amended, supplemented or superseded by a later
filing, on the date of the later filing) contain any 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.
5.9 Allied Financial Statements. The consolidated balance sheets
and consolidated statements of operations, stockholder's equity and cash flows
of Allied and its Subsidiaries included in the Allied SEC Filings fairly
present in all material respects the consolidated financial position of Allied
and its Subsidiaries at their respective dates and the consolidated results of
operations of Allied and its Subsidiaries for the respective periods then
ended, in accordance with U.S. GAAP, subject, in the case of unaudited interim
financial statements, to year-end adjustments (which consist of normal
recurring accruals) and the absence of explanatory footnote disclosures
required by U.S.
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GAAP. Allied's unaudited consolidated balance sheet at June 30, 1996 included
in the Allied SEC Filings is herein called the "Latest Allied Balance Sheet."
5.10 Absence of Certain Changes. Except as set forth in Section
5.10 of the Allied Disclosure Schedule, since June 30, 1996, Allied and its
Subsidiaries have conducted their businesses only in the ordinary course,
consistent with past practice, and there has not occurred a Material Adverse
Effect with respect to Allied and its Subsidiaries or any event that could
result in a Material Adverse Effect on Allied and its Subsidiaries.
5.11 No Undisclosed Liabilities. Except as disclosed in the Latest
Allied Balance Sheet or in Sections 5.11 and 5.14 of the Allied Disclosure
Schedule, Allied and its Subsidiaries have no liabilities or obligations, known
or unknown, fixed or contingent, other than (i) those arising since June 30,
1996 in the ordinary course of business and consistent with past practice, (ii)
liabilities and obligations arising after the date of this Agreement without
violation of Sections 7.1 and 7.2, or (iii) liabilities and obligations that,
individually or in the aggregate, could not result in a Material Adverse Effect
on Allied and its Subsidiaries.
5.12 Allied Properties. Allied and its Subsidiaries have good and
marketable title to the properties and assets used in the conduct of their
business including those reflected in the Latest Allied Balance Sheet (other
than properties and assets disposed of in the ordinary course of business since
June 30, 1996, which, in the aggregate, are not material), free of all Liens
except Permitted Liens and Liens disclosed in Section 5.12 of the Allied
Disclosure Schedule. Section 5.12 of the Allied Disclosure Schedule lists each
landfill owned or operated by Allied and its Subsidiaries and accurately
describes each such landfill by its city or county and state or province of
location, total acreage, permitted acreage, estimated remaining permitted
capacity in tons, estimated or mandated closure date, and estimated closure,
post-closure and reclamation liability at its projected or mandated closure
date (computed at the closure date with and without discount to present value).
Section 5.12 of the Allied Disclosure Schedule also lists each solid waste
landfill not owned or operated by Allied and its Subsidiaries, but to which
Allied and its Subsidiaries hauls solid waste.
5.13 Taxes and Tax Returns. Except as described in Section 5.13 of
the Allied Disclosure Schedule:
(i) all Tax Returns required to be filed with any Taxing
Authority with respect to any Pre-Closing Tax Period by or on behalf
of Allied and its Subsidiaries have been or will be duly filed on a
timely basis in accordance with all applicable laws;
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(ii) at the time of their filings all such Tax Returns
were or will be complete and correct;
(iii) the reserves for Taxes reflected in the Latest Allied
Balance Sheet are adequate to cover all Taxes that have not been paid,
but which under U.S. GAAP were accruable, through the date of the
Latest Allied Balance Sheet.
(iv) there are no Liens for Taxes upon any assets of
Allied or any of its Subsidiaries, except Liens for Taxes not yet due
for current Tax periods ending with or after the Closing Date;
(v) there are no outstanding deficiencies, assessments or
written proposals for the assessment of Taxes proposed, asserted or
assessed against Allied or any Subsidiary of Allied and there is no
basis for any additional assessments or reassessments for any Taxes
for which adequate provision has not been made in the books and
records of Allied or its Subsidiaries, as the case may be; and
(vi) no extension of the statute of limitations or waiver
of normal reassessment periods on the assessment of any Taxes has been
granted to Allied or any Subsidiary of Allied.
5.14 Litigation. Except as disclosed in the Allied SEC Filings or
in Section 5.14 of the Allied Disclosure Schedule, there is no suit, action,
investigation or proceeding pending or, to the knowledge of the Allied Parties,
threatened against Allied or any of its Subsidiaries at law or in equity before
or by any Governmental Entity or before any arbitrator or mediator of any kind,
that could have a Material Adverse Effect on Allied and its Subsidiaries, and
there is no judgment, decree, injunction, rule or order of any Governmental
Entity, arbitrator or mediator to which Allied or any Allied Subsidiary is
subject that could have a Material Adverse Effect on Allied and its
Subsidiaries. No Allied Party has knowledge of any grounds on which any suit,
action, investigation or proceeding of the nature referred to in this Section
5.14 might be commenced with any reasonable likelihood of success.
5.15 Environmental Matters. Except as reflected in the Allied SEC
Filings or as described in Section 5.15 of the Allied Disclosure Schedule (as
may be updated on or before 5 Business Days before the Closing), and except to
the extent that the inaccuracy of any of the following, individually or in the
aggregate, could not have a Material Adverse Effect on Allied and its
Subsidiaries:
(i) Allied and its Subsidiaries hold, and are in
compliance with and have been in compliance, all Environmental
Permits, and are otherwise in compliance and have been in compliance
with, all applicable Environmental
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Laws, and there is no condition that could prevent or interfere with
compliance by the Allied or any of its Subsidiaries with any
Environmental Law;
(ii) no modification, revocation, reissuance, alteration,
transfer or amendment of any Environmental Permit, or any review by,
or approval of, any Governmental Entity or other third party of any
Environmental Permit is required in connection with the execution or
delivery of this Agreement or any Ancillary Agreement, the
consummation of the Acquisitions or the operation of the business of
Allied and its Subsidiaries on the Closing Date;
(iii) neither Allied nor any of its Subsidiaries has
received any Environmental Claim, nor has any Environmental Claim been
threatened against Allied or any of its Subsidiaries;
(iv) neither Allied nor any of its Subsidiaries has
entered into, agreed to or is subject to any outstanding judgment,
decree, order or other directive issued by, or consent arrangement
with, any Governmental Entity under any Environmental Law, including
any such judgment, decree, order or other directive relating to
compliance with any Environmental Law or to the investigation,
cleanup, remediation or removal of Hazardous Substances;
(v) to the knowledge of the Allied Parties, there are no
circumstances that could give rise to liability under any agreements
with any Person under which Allied or any of its Subsidiaries would be
required to defend, indemnify, hold harmless, or otherwise be
responsible for any violation by or other liability or expense of such
Person, or alleged violation by or other liability or expense of such
Person, arising under any Environmental Law;
(vi) to the knowledge of the Allied Parties, there are no
other circumstances or conditions that could give rise to liability or
obligation of Allied or any of its Subsidiaries under any
Environmental Law; and
(vii) the liabilities and reserves for closure,
post-closure monitoring and maintenance and environmental remediation
reflected on the Latest Allied Balance Sheet adequately provide for,
in accordance with U.S. GAAP, all future claims and costs for closure,
post-closure monitoring, investigation and maintenance, reclamation,
remediation, restoration and cleanup of all landfills now or
previously owned, occupied or leased or operated by Allied or any of
its Subsidiaries (or now or previously under the management or control
of Allied or any of its Subsidiaries) and all Environmental Claims
against Allied or any of its Subsidiaries.
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5.16 Governmental Licenses and Permits; Compliance with Laws.
Except as described in the Allied SEC Filings or Section 5.16 of the Allied
Disclosure Schedule, neither Allied nor any of its Subsidiaries has received
notice of any revocation or modification of any license, certification, tariff,
permit, registration, exemption, approval or other authorization by any
Governmental Entity, the revocation or modification of which could have a
Material Adverse Effect on Allied and its Subsidiaries. The conduct of the
business of Allied and its Subsidiaries complies and has been conducted in
compliance with all applicable Laws, except for violations or failures to
comply, if any, that, individually or aggregate, could not have a Material
Adverse Effect on Allied and its Subsidiaries.
5.17 Labor Matters. There is no labor strike, dispute, slowdown,
work stoppage, unresolved material labor union grievance or labor arbitration
proceedings pending or, to the knowledge of Allied, threatened against Allied
or any of its Subsidiaries, and no material current union organizing activities
among employees of Allied or its Subsidiaries. Since the enactment of the WARN
Act, neither Allied nor any of its Subsidiaries has effectuated (i) a "plant
closing" (as defined in the WARN Act) affecting any site of employment or one
or more facilities or operating units within any site of any employment
facility or (ii) a "mass layoff" (as defined in the WARN Act) affecting any
site of employment or facility of Allied or any of its Subsidiaries. Neither
Allied nor any of its Subsidiaries has been affected by any transaction or
engaged in any layoffs or employment terminations sufficient in number to
trigger application of any similar state, provincial or local law. No
employees of Allied or any of its Subsidiaries have suffered an "employment
loss" (as defined in the WARN Act) since December 1, 1995.
5.18 Opinion of Financial Advisor. On the date of this Agreement,
Allied has received the opinion of Xxxxxxx, Xxxxx & Co. to the effect that on
the basis of the assumptions referred to therein, the consideration payable by
the Allied Parties in connection with the Acquisitions, taken as a whole, is
fair to Allied.
5.19 Financing. The Allied Parties have delivered to the Xxxxxxx
Sellers copies of the Commitment Letter and the Highly Confident Letter. The
Commitment Letter and the Highly Confident Letter remain in effect at the date
of this Agreement. The funds committed to be made available to the Allied
Parties under the Commitment Letter and the funds to be sought by Allied
through the sale of the securities described in the Highly Confident Letter,
together with Allied's funds and funds otherwise available to Allied, are
sufficient to consummate the Acquisitions.
5.20 Letter from Stockholders. On or before the date of this
Agreement, Allied has received, and has delivered to the Xxxxxxx Parties copies
of, a letter from Xxxxx X. Xxxxxx and Xxxxxx X. Xxx Xxxxxxx, expressing their
agreement to vote all shares of Allied Common Stock held by them for approval
of the matters to be
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submitted to Allied's stockholders for approval pursuant to Section 7.5 of this
Agreement.
5.21 Brokers. Except for Xxxxxxx, Sachs & Co., which has acted as
financial advisor to Allied in connection with the Acquisitions, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with this Agreement or the Acquisitions based upon
arrangements made by or on behalf of any Allied Party.
5.22 Aggregation. The imperfections, defects, orders, actions,
defaults, liabilities, inaccuracies and other items omitted from disclosure in
connection with the representations and warranties made in Sections 5.1 through
5.21 on grounds of immateriality, lack of knowledge or failure to have a
Material Adverse Effect do not and could not, taken as a whole, constitute a
Material Adverse Effect on the Allied Parties.
ARTICLE VI
XXXXXXX AGREEMENTS PENDING CLOSING
The Xxxxxxx Sellers jointly and severally agree that pending the
Closing, without the prior written consent of Allied:
6.1 Conduct of Business. Each Acquired Subsidiary shall conduct
its operations according to its ordinary and usual course of business, comply
with applicable Laws, comply with the terms of Xxxxxxx Employee Plans
(including by making all contributions required by the terms of the Xxxxxxx
Pension Plan, applicable actuarial recommendations and applicable Law), and use
its best efforts to preserve intact its business organization, keep available
the services of its officers and employees and maintain normal business
relationships with customers, suppliers and others having business
relationships with it. The Xxxxxxx Parties shall confer on a regular and
frequent basis with one or more designated representatives of Allied to report
on operational matters of materiality and to report the general status of
on-going operations of the Acquired Subsidiaries. The Xxxxxxx Parties shall
notify Allied of:
(i) any unexpected material emergency or other material
change in the normal course of business or in the operation of the
properties of the Acquired Subsidiaries;
(ii) the instigation of or any significant development in
any regulatory proceedings, governmental complaints, investigations or
hearings (or communications indicating that any may be contemplated)
involving either
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Xxxxxxx Seller, or any Acquired Subsidiary, which instigation or
development could have a Material Adverse Effect on the Acquired
Subsidiaries or the Xxxxxxx Sellers;
(iii) proposed budgets, capital expenditures, acquisitions
and dispositions of assets and other decisions involving material
properties of the Acquired Subsidiaries; and
(iv) any matter or event which comes to the knowledge of
the Xxxxxxx Sellers and which makes or could make any representation
and warranty made by the Xxxxxxx Sellers in Article IV untrue or
inaccurate.
The Xxxxxxx Parties shall keep Allied fully informed of such events
and permit Allied's representatives access to all materials prepared in
connection with such events.
The Xxxxxxx Sellers agree to advance to the Acquired Subsidiaries
during the period from the date of this Agreement through the Closing Date
funds sufficient to allow the Acquired Subsidiaries to maintain their working
capital at levels sufficient to support their continued operations in the
ordinary course of their business and consistent with past practices. The
Xxxxxxx Sellers further agree, without limiting the generality of the preceding
sentence, to (i) maintain and continue their customer billing, receivable
collection and payables payment practices in a manner consistent with past
practices and in the ordinary course of business, and (ii) make the capital
expenditures at the times and in the amounts included in the schedule of
capital expenditures included in Section 6.2 to the Xxxxxxx Disclosure
Schedule.
6.2 Forbearance by the Acquired Subsidiaries. The Xxxxxxx Parties
shall not cause or permit any Acquired Subsidiary to, and no Xxxxxxx Party
which is an Acquired Subsidiary shall:
(i) amend its charter or bylaws (or other similar
organizational documents);
(ii) issue, sell, pledge, dispose of or encumber any
shares of its capital stock or securities convertible into any such
shares, or enter into any agreement or commitment with respect to the
issuance or purchase of any such shares or securities;
(iii) in the case of LWSI, LWSC and LMS only, pay any
dividend or other distribution in respect of the LWSI Shares, the LWSC
Shares or the LMS Shares, or redeem purchase or acquire any LWSI
Shares, the LWSC Shares or the LMS Shares, except that LWSI and LWSC
may make the distributions required to be made by them under Section
3.2;
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(iv) incur any indebtedness for borrowed money other than
Intercompany Indebtedness;
(v) make or commit to make any capital investment,
capital expenditure, capital addition or capital improvement, except
to the extent that any single capital expenditure made or committed to
be made by any Acquired Subsidiary and all capital expenditures made
or committed to be made by all Acquired Subsidiaries do not exceed the
amounts set forth in the budget of capital expenditures included in
Section 6.2 of the Xxxxxxx Disclosure Schedule.
(vi) except in the ordinary course of business, and except
for settlements made by insurers, enter into any compromise or
settlement of any litigation, proceeding or governmental investigation
relating to such Acquired Subsidiary or its respective properties
which requires such Acquired Subsidiary to make a payment in excess of
$1.5 million or which would result in the imposition of any
restriction upon the operations of such Acquired Subsidiary, or the
disposition of any of its properties, except for restrictions or
dispositions which could have a Material Adverse Effect on the
Acquired Subsidiaries;
(vii) sell real property or any interest in or improvement
upon real property (other than the real property, interests in and
improvements upon real property described in Section 6.2 of the
Xxxxxxx Disclosure Schedule) or any other capital asset the book value
or sales price of which is more than $500,000;
(viii) amend the Xxxxxxx Pension Plan or Xxxxxxx Employee
Plans or make any statement relating to any anticipated or proposed
increase in benefits under the Xxxxxxx Pension Plan or Xxxxxxx
Employee Plans for current, future or former employees of any of the
Acquired Subsidiaries other than strictly in accordance with the terms
of the Xxxxxxx Pension Plan or Xxxxxxx Employee Plans as currently
constituted;
(ix) transfer, license, lease, sell, dispose, mortgage or
encumber any assets or properties other than in the ordinary course of
business; or
(x) increase compensation, benefits or severance for
employees of any Acquired Subsidiary except as required by any
collective bargaining agreements entered into by the Acquired
Subsidiaries as in effect on the date of this Agreement, and except as
set forth in Section 6.2 of the Xxxxxxx Disclosure Schedule.
6.3 Access and Information. The Xxxxxxx Parties shall give to
Allied and its representatives (including its lenders and their
representatives) full access during normal business hours to all the
properties, books, contracts, commitments, records, Tax
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Returns, personnel and advisors of Xxxxxxx and the Acquired Subsidiaries so
that Allied may have full opportunity to make such investigation of the
Acquired Subsidiaries as it shall reasonably request in advance. The Xxxxxxx
Parties will cause Coopers & Xxxxxxx to permit Xxxxxx Xxxxxxxx L.L.P. to review
and examine the work papers of Coopers & Xxxxxxx relating to Xxxxxxx and the
Acquired Subsidiaries. The Xxxxxxx Parties will promptly furnish to Allied all
information with respect to the Acquired Subsidiaries which Allied may
reasonably request. Additionally, the Xxxxxxx Parties will furnish Allied all
information concerning the Acquired Subsidiaries required for inclusion in any
application, filing statement or notice to be made by any Allied Party to, or
filed or joined in by any Allied Party with, any Governmental Entity in
connection with this Agreement or the Acquisitions, including the Allied Proxy
Statement, and none of such information shall, at the date furnished, contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Xxxxxxx Parties
shall prior to the Mailing Date promptly inform Allied on becoming aware that
any information concerning any of the Acquired Subsidiaries furnished to Allied
pursuant to this Section 6.3 contains any such material misstatement or
omission.
6.4 Supplemental Information. (a) As soon as practicable after
the date of this Agreement and in no event later than October 1, 1996, the
Xxxxxxx Sellers shall furnish to Allied an unaudited separate balance sheet
(prepared on a company only basis) of each Acquired Subsidiary at August 31,
1995, and the related unaudited separate statements of operations and
stockholder's equity (similarly prepared) for each Acquired Subsidiary for the
year then ended (the "SWM Group Separate Company Financial Statements"). The
SWM Group Separate Company Financial Statements will be prepared in accordance
with U.S. GAAP, except for compliance with SFAS 109 and the omission of
explanatory footnote disclosures.
(b) The Xxxxxxx Parties shall furnish to Allied copies of interim
monthly financial statements for the Acquired Subsidiaries (prepared using the
format customarily used by Xxxxxxx for such internal reports and, no less
frequently than each fiscal quarter, prepared for the Acquired Subsidiaries for
such fiscal quarter on a combined basis) as soon as practicable but in any
event within 35 days after the end of each month or quarter, as the case may
be, together with any information ordinarily prepared in connection with such
financial statements. All such interim financial statements shall fairly
present in all material respects in accordance with such accounting principles
the separate company, combined or consolidated, as the case may be, financial
position of the respective Acquired Subsidiaries or groups of Acquired
Subsidiaries covered thereby at the respective dates thereof, and the results
of their separate company or consolidated, as the case may be, operations,
stockholders' equity and cash flows for the respective Acquired Subsidiaries or
groups of Acquired Subsidiaries covered thereby for the respective periods
covered thereby, subject to year-
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end adjustments (consisting of normal recurring accruals) and the omission of
explanatory footnote materials required by U.S. GAAP and Canadian GAAP.
6.5 Audit of Financial Statements. The Xxxxxxx Parties shall
cause Coopers & Xxxxxxx to conduct an audit of the Acquired Subsidiaries on a
combined basis and to issue their unqualified report thereon, which audit will
include combined balance sheets at August 31, 1995 and August 31, 1996, and the
related combined statements of operations, stockholder's equity and cash flows
for the years ended August 31, 1994, 1995 and 1996 ("SWM Group Audited Combined
Financial Statements"). The Xxxxxxx Parties shall deliver the SWM Group
Audited Combined Financial Statements, together with the unqualified report
thereon by Coopers & Xxxxxxx, to the Allied Parties as soon as practicable
after the date of this Agreement and in no event later than October 1, 1996.
The SWM Group Audited Combined Financial Statements shall be prepared in
accordance with U.S. GAAP and the rules of the SEC relating to the preparation
of financial statements. The Xxxxxxx Parties shall cause Coopers & Xxxxxxx to
consent to the inclusion of the SWM Group udited Combined Financial statements
in any proxy statement, registration statement or other SEC filings of Allied
or any subsidiary of Allied.
6.6 Access for Environmental Report. The Xxxxxxx Parties shall
cause the Acquired Subsidiaries to give to Emcon Environmental Services, Inc.
("Emcon"), independent environmental consultants engaged by and at the expense
of the Allied Parties, full access to the facilities, personnel and records of
the Acquired Subsidiaries as such consultants shall reasonably request
(including for physical inspection of sites and the drilling of xxxxx and the
conducting of soil borings and other Phase II investigatory techniques) in
order to conduct Phase I and II environmental assessments of each parcel of
real property owned, or under the management or control of, or operated, leased
or occupied by, an Acquired Subsidiary, and to prepare a report reflecting the
findings and recommendations of such consultants concerning such Phase I and
Phase II environmental assessments (the "Emcon Environmental Report"). The
Xxxxxxx Parties shall use their best efforts to ensure that all information
provided to Emcon in the course of its conduct of such environmental
assessments is accurate, complete and not misleading (including by omissions).
The Xxxxxxx Parties will provide, and will cause the Acquired Subsidiaries to
provide, upon written request therefor, all consents, approvals and directions
(and waivers of privacy, freedom of information and similar Laws) so as to
permit such consultants to have prompt and unrestricted access to all relevant
information in the possession or under the control of Governmental Entities.
6.7 Confidentiality. All information and data furnished by the
Allied Parties to the Xxxxxxx Sellers under Section 7.3 or any other provision
of this Agreement shall be received, held, treated and, if applicable, returned
to the Allied Parties, in accordance and compliance with the Confidentiality
Agreement.
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6.8 Consummation of Acquisitions. The Xxxxxxx Parties shall use
their best efforts to perform and fulfill, and shall use their best efforts to
cause the Xxxxxxx Sellers and the Acquired Subsidiaries to perform and fulfill,
all conditions and obligations on their part to be performed and fulfilled
under this agreement, to the end that the Acquisitions shall be consummated.
ARTICLE VII
ALLIED COVENANTS PENDING CLOSING
The Allied Parties agree that pending the Closing, without the prior
written consent of Xxxxxxx:
7.1 Conduct of Allied's Business. Allied and its Subsidiaries
shall conduct their operations according to their ordinary and usual course of
business, and shall use their best efforts to preserve intact their business
organization, keep available the services of their officers and employees and
maintain normal business relationships with customers, suppliers and others
having business relationships with it. The Allied Parties shall confer on a
regular and frequent basis with one or more designated representatives of
Xxxxxxx to report on operational matters of materiality and to report the
general status of on-going operations of Allied. The Allied Parties shall
notify Xxxxxxx of:
(i) any unexpected material emergency or other material
change in the normal course of business or in the operation of the
properties of Allied and its Subsidiaries;
(ii) the instigation of or any significant development in
any regulatory proceedings, governmental complaints, investigations or
hearings (or communication indicating that any may be contemplated)
involving Allied and its Subsidiaries, which instigation or
development could have a Material Adverse Effect on Allied and its
Subsidiaries;
(iii) material acquisitions and dispositions of assets; and
(iv) any matter or event which comes to the knowledge of
the Allied Parties and which makes or could make any representation
and warranty made by the Allied Parties in Article V untrue or
inaccurate.
The Allied Parties shall keep Xxxxxxx fully informed of such events
and permit Xxxxxxx'x representatives access to all materials prepared in
connection with such events.
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7.2 Forbearance by Allied. Allied shall not:
(i) amend or propose to amend its Certificate of
Incorporation (except to increase the number of shares of Allied
Common Stock it is authorized to issue) or bylaws;
(ii) issue any shares of Allied Common Stock or securities
convertible into or exchangeable for shares of Allied Common Stock, or
enter into any agreement or commitment with respect to the issuance or
purchase of any such shares or securities, except that Allied may (x)
issue shares of Allied Common Stock upon any exercise of any presently
outstanding warrants or any conversion of any presently outstanding
shares of convertible Allied Preferred Stock or any presently
outstanding convertible indebtedness of Allied which are, in each such
case, described in the Allied SEC Filings, (y) issue employee and
director stock options under presently existing director and employee
stock option plans and shares of Allied Common Stock issuable upon any
exercise of any options granted under any such plan, and (z) issuances
of not more than an aggregate of five million shares of Allied Common
Stock in connection with future acquisitions of other business
enterprises inclusive of those acquisitions set forth on Section 5.10
of the Allied Disclosure Schedule;
(iii) split, combine or reclassify any outstanding shares
of Allied Common Stock; or
(iv) declare, pay or set aside for payment any dividend or
other distribution in respect of any outstanding shares of Allied
Common Stock.
7.3 Access and Information. Allied shall give the Xxxxxxx Sellers
and their representatives full access during normal business hours to all the
properties, books, contracts, commitments and records of Allied and its
Subsidiaries so that the Xxxxxxx Sellers may have full opportunity to make such
investigation of Allied and its Subsidiaries as they shall reasonably request
in advance. Allied will furnish each Xxxxxxx Seller all information concerning
Allied and its Subsidiaries required for inclusion in any application, filing,
statement or notice made by any Xxxxxxx Party to, or filed or joined in by any
Xxxxxxx Party with, any Governmental Entity in connection with this Agreement
or the Acquisitions, and none of such information shall, at the date furnished,
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
7.4 Supplemental Information. Allied shall, within five days
following each such filing, furnish Xxxxxxx with a copy of each Current Report
on Form 8-K, each Quarterly Report on Form 10-Q and each Annual Report on Form
10-K filed by Allied
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with the SEC. Allied shall also furnish Xxxxxxx copies of Allied's interim
monthly consolidated financial statements as soon as practicable but in any
event within 35 days after the end of each month, together with any information
ordinarily prepared in connection with such financial statements. All
financial statements included in each such Quarterly Report on Form 10-Q and
Annual Report on Form 10-K shall be prepared in conformity with U.S. GAAP,
shall present fairly in all material respects, in accordance with U.S. GAAP,
the consolidated financial position of Allied and its Subsidiaries at the end
of the periods covered thereby and the results of their consolidated operations
for the periods covered thereby, subject, in the case of unaudited interim
financial statements, to year-end adjustments (consisting of normal recurring
accruals) and the omission of explanatory footnote materials required by U.S.
GAAP.
7.5 Allied Stockholders' Meeting. Allied shall call a special
meeting of the holders of Allied Common Stock to be held to vote to approve the
issuance of the Allied Common Shares, the Additional Allied Common Shares, the
Allied Warrant, and the Warrant Shares, and to approve the authorization of
additional shares of authorized Allied Common Stock. Allied will use its best
efforts to hold the Allied Stockholders' Meeting no later than 40 days
following the date of mailing of the definitive proxy statement to be furnished
to its stockholders in connection with such meeting (the "Allied Proxy
Statement"). Subject to fiduciary duties under applicable Law, Allied will
recommend approval of the matters referred to above, and agrees to use its best
efforts to obtain a favorable vote thereon. In connection with the Allied
Stockholders' Meeting, Allied shall prepare and file with the SEC, as soon as
practicable following the delivery to Allied of the SWM Group Audited
Consolidated Financial Statements, a preliminary copy of the Allied Proxy
Statement. As soon as practicable thereafter, Allied will cause to be mailed
to each holder of Allied Common Stock a copy of the Allied Proxy Statement
complying in all material respects with the Exchange Act. All information
concerning Allied or any of its Subsidiaries included in the Allied Proxy
Statement will be, on the date of commencement of the mailing of the Allied
Proxy Statement (the "Mailing Date"), true and correct in all material respects
without omission of any material fact required to be stated to make the
information set forth therein not misleading.
7.6 Emcon Environmental Report. The Allied Parties shall use
their best efforts to cause the Emcon Environmental Report to be prepared as
soon as practicable after the date of this Agreement, and the Allied Parties,
promptly upon their receipt of such Report, shall deliver a copy of the Report
to the Xxxxxxx Parties.
7.7 Confidentiality. All information and data furnished by the
Xxxxxxx Sellers to the Allied Parties under Section 6.3 or any other provision
of this Agreement shall be received, held, treated and, if applicable, returned
to the Xxxxxxx Sellers, in accordance and compliance with the Confidentiality
Agreement.
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7.8 Consummation of Acquisitions. The Allied Parties shall use
their best efforts to perform and fulfill, and shall use its best efforts to
cause the Allied Parties to perform and fulfill, all conditions and obligations
on their part to be performed and fulfilled under this Agreement, to the end
that the Acquisitions shall be consummated.
ARTICLE VIII
MUTUAL CONDITIONS
The respective obligations of all Parties to consummate the
Acquisitions and to take the other actions called for under Articles II and III
are subject to the fulfillment of each of the following conditions on or before
the Closing Date:
8.1 No Adverse Proceedings. No order entered or Law promulgated
or enacted by any Governmental Entity shall be in effect which would prevent
consummation of the Acquisitions, and no proceeding brought by a Governmental
Entity or any other Person shall have been commenced and be pending which seeks
to restrain, enjoin, prevent or materially delay or restructure any
Acquisition.
8.2 HSR Waiting Period. The waiting period under the HSR Act
shall have expired or otherwise been terminated.
8.3 Allied Stockholder Approval. The matters to be submitted to
the stockholders as set forth in Section 7.5 of this Agreement shall have been
approved by the requisite vote of the holders of Allied Common Stock.
8.4 Competition Act Matters. Either (i) the Competition Act
Director shall have issued an Advance Ruling Certificate in respect of the
Acquisitions and shall not have subsequently withdrawn the Advance Ruling
Certificate or indicated that he has obtained new information as result of
which the Competition Act Director is no longer satisfied that he would not
have sufficient grounds on which to make an application under Section 92 of the
Competition Act with respect to the Acquisitions, or (ii) the applicable time
period under Section 123 of the Competition Act shall have expired.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF ALLIED PARTIES
The respective obligations of the Allied Parties to consummate the
Acquisitions and to take the other actions called for under Articles II and III
are subject to the fulfillment of each of the following conditions on or before
the Closing Date:
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9.1 Representations True at Closing. (a) The Xxxxxxx Parties
shall have performed and complied in all material respects with all obligations
and agreements required to be performed or complied with by them under this
Agreement at or prior to the Closing, and the representations and warranties of
the Xxxxxxx Sellers contained in this Agreement (other than those set forth in
Section 4.15) shall be true and correct when made and at and as of the Closing
as if made at and as of such date and time, except to the extent that any
breaches of such representations and warranties (such breaches being determined
individually or in the aggregate and as if references to "Material Adverse
Effect", "in all material respects" and "knowledge of the Xxxxxxx Sellers" were
deleted in their entirety and the effect of any such references were eliminated
altogether) could not result in Damages in excess of $25,000,000; and the
Allied Parties shall have received certificates, each dated the Closing Date,
of the President or a Vice President of each of the Xxxxxxx Sellers, to the
effect set forth in this Section 9.1(a).
(b) The representations and warranties of the Xxxxxxx Sellers
contained in Section 4.15 hereof shall be true and correct as of the Closing,
except to the extent that any breaches of such representations and warranties
(such breaches being determined individually or in the aggregate and as if
references to "Material Adverse Effect", "in all material respects", and
"Knowledge of the Xxxxxxx Sellers" were deleted in their entirety and the
effect of any such references were eliminated altogether), in the judgment of
the Allied Parties, acting reasonably in accordance with Section 11.10, could
not result in Damages (y) in the aggregate in excess of $6,000,000 or (z)
during the first two years following the Closing Date in excess of the amounts
to be expended during those years as calculated in determining the liabilities
and reserves referred to in Section 4.15(vii); and the Allied Parties shall
have received certificates, each dated the Closing Date, of the President or a
Vice President of each of the Xxxxxxx Sellers, to the effect of this Section
9.1(b); provided, however, that if the Xxxxxxx Sellers shall have timely made
the election to pay or provide an acceptable undertaking as provided for in
Section 11.10 and performed their obligations in compliance with Section 11.10,
then the condition stated in this Section 9.1(b) shall be deemed to be
satisfied. For the purposes of this Section 9.1(b), calculation of Damages
with respect to periods after the first two years after the Closing Date shall
be made on a discounted basis calculated on the same basis as amounts are
discounted in connection with the calculation of the liabilities and reserves
referred to in Section 4.15(vii).
9.2 No Adverse Changes. Since the date of this Agreement, no
event or series of events taken in the aggregate shall have occurred which
could have a Material Adverse Effect on the Acquired Subsidiaries or the
Xxxxxxx Sellers.
9.3 Opinion of Xxxxxxx U.S. Counsel. The Allied Parties shall
have received an opinion, dated the Closing Date, of Xxxxxx Xxxxxx & Xxxxx,
U.S. counsel to the Xxxxxxx Sellers, in the form attached as Exhibit I to this
Agreement.
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9.4 Opinion of Xxxxxxx Canadian Counsel. The Allied Parties shall
have received an opinion, dated the Closing Date, of Xxxx Xxxxxx, Senior Vice
President and General Counsel of Xxxxxxx, to the effect set forth in Exhibit J
attached to this Agreement.
9.5 Investment Canada Act. The Allied Parties shall have received
from the ICA Minister a notice, satisfactory in form and substance to the
Allied Parties, under subsection 21(1) of the Investment Canada Act, stating
that the Acquisitions are likely to be of net benefit to Canada, or the ICA
Minister shall have been deemed, under Section 21(2) of the Investment Canada
Act, to be satisfied that the Acquisitions are likely to be of net benefit to
Canada and the Allied Parties shall have received a notice from the ICA
Minister to that effect.
9.6 Competition Act Matters. Either (i) the Competition Act
Director shall have issued an Advance Ruling Certificate in respect of the
Acquisitions and shall not have subsequently withdrawn the Advance Ruling
Certificate or indicated that he has obtained new information as a result of
which the Competition Act Director is no longer satisfied that he would not
have sufficient grounds on which to make an application under Section 92 of the
Competition Act in respect of the Acquisitions, or (ii) the Competition Act
Director or his representative shall have advised the Allied Parties (on terms
and in form satisfactory to them) that the Competition Act Director does not
currently intend to make an application under Section 92 of the Competition Act
in respect of the Acquisitions, and such advice shall not have been amended or
rescinded.
9.7 Audited Financial Statements. The Allied Parties shall have
received the SWM Group Audited Combined Financial Statements (and related
footnotes) and the report thereon by Coopers & Xxxxxxx, which report shall have
been unqualified.
9.8 Emcon Environmental Report. The Allied Parties shall have
received the Emcon Environmental Report.
9.9 Acquisitions Financing. The Allied Parties shall have
received the proceeds of the financings contemplated in the Commitment Letter
and the Highly Confident Letter, or proceeds from other financing with respect
to the Acquisitions which are satisfactory to the Allied Parties, in an
aggregate amount of at least $1,700,000,000.
9.10 Outstanding Indebtedness. The Indebtedness of the Acquired
Subsidiaries, in the aggregate, will not exceed $4,900,000, excluding the
Xxxxxxx Guaranties and guaranties of purchase money indebtedness of owner
operators not to exceed C$8,600,000.
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ARTICLE X
CONDITIONS TO XXXXXXX'X OBLIGATIONS
The respective obligations of the Xxxxxxx Parties to consummate the
Acquisitions and to take the other actions called for under Articles II and III
are subject to the fulfillment of each of the following conditions on or before
the Closing Date:
10.1 Representations True at Closing. The Allied Parties shall have
performed and complied in all material respects with all obligations and
agreements required to be performed or complied with by them under this
Agreement at or prior to the Closing and the representations and warranties of
the Allied Parties contained in this Agreement shall be true and correct when
made and at and as of the Closing as if made at and as of such date and time,
except to the extent that any breaches of such representations and warranties
(such breaches being determined individually or in the aggregate, and as if
references to "Material Adverse Effect", and "knowledge of the Allied Parties"
were deleted in their entirety and the effect of any such references were
eliminated altogether) could not result in Damages in excess of $25,000,000 and
the Xxxxxxx Sellers shall have received certificates, each dated the Closing
Date, of the President or Vice President of each of the Allied Parties, to the
effects set forth in this Section 10.1.
10.2 No Adverse Changes. Since the date of this Agreement, no
event or series of events taken in the aggregate shall have occurred which
could have a Material Adverse Effect on Allied and its Subsidiaries.
10.3 Opinion of Allied's U.S. Counsel. The Xxxxxxx Sellers shall
have received an opinion, dated the Closing Date, of Xxxxxx & Xxxxxx, L.L.P.,
U.S. counsel to the Allied Parties, in the form attached as Exhibit K to this
Agreement.
10.4 Opinion of Allied's Canadian Counsel. The Xxxxxxx Parties
shall have received an opinion, dated the Closing Date, of Xxxxxx, Xxxx & Xxxx,
Canadian solicitors for the Allied Parties, to the effects set forth in Exhibit
L attached to this Agreement.
ARTICLE XI
ADDITIONAL AGREEMENTS
11.1 HSR Act Filings. Within 10 Business Days after the date of
this Agreement, Xxxxxxx and Allied shall file notification and report forms
under the HSR Act with the FTC and the Antitrust Division, and shall use their
best efforts to respond
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as promptly as practicable to all requests received from the FTC or the
Antitrust Division for additional information or documentation.
11.2 Competition Act Filings. The Allied Parties and the Xxxxxxx
Sellers agree to file with the Competition Act Director, within 10 Business
Days after the date of this Agreement, the information set out in Section 121
of the Competition Act, certified in accordance with Section 118 of the
Competition Act. If the Competition Act Director, before the expiration of
seven days after the date of filing of such information, requires the
information set out in Section 122 of the Competition Act, the Allied Parties
and the Xxxxxxx Sellers shall file the required information with the
Competition Act Director within 10 Business Days after the date the information
is required by him. The Allied Parties shall prepare and file with the
Competition Act Director, and the Xxxxxxx Sellers shall cooperate with the
Allied Parties in their preparation and filing of, an Advance Ruling
Certificate in respect to the Acquisitions, and all Parties will provide to the
Competition Act Director all information requested by him in connection with
the Advance Ruling Certificate application.
11.3 Investment Canada Act Filings. The Allied Parties agree to
prepare and file with the ICA Minister, within 10 Business Days after the date
of this Agreement, an application for review under the Investment Canada Act in
connection with the Acquisitions, and the Xxxxxxx Sellers agree to cooperate
with the Allied Parties in connection with such application.
11.4 Other Consents and Approvals. All Parties shall use their
best efforts to obtain before the Closing, in addition to the approvals and
consents referred to in Section 8.2, 8.3, 8.4, 9.5, and 9.6, and all other
consents and approvals listed and disclosed in Section 4.4 of the Xxxxxxx
Disclosure Schedule, Section 4.19 of the Xxxxxxx Disclosure Schedule or Section
5.5 of the Allied Disclosure Schedule; provided, however, that nothing in this
Section 11.4 or Sections 11.1, 11.2, or 11.3 shall require any Allied Party or
any Acquired Subsidiary to (i) dispose of or to hold separately all or any
material portion of the assets, properties or businesses of the Acquired
Subsidiaries or the assets, properties or business of Allied and its
Subsidiaries or agree to the imposition of any material limitation on the
ability of Allied and its Subsidiaries after the Closing (including the
Acquired Subsidiaries) to conduct their business and own their assets and
properties after the Closing in substantially the same manner as before the
Closing, or (ii) in the case of Section 11.3 and the application referred to
therein, make any undertaking relating to any Acquired Canadian Subsidiary or
its assets, properties, business, operations, employees or practices, which in
the reasonable judgment of the Allied Parties, would or could have, after the
Closing, a Material Adverse Effect on the Acquired Subsidiaries.
11.5 Publicity. No Party other than Allied or Xxxxxxx shall issue
any press release or public announcement pertaining to the Acquisitions.
Allied and Xxxxxxx shall
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consult with each other concerning any such press release or public
announcement and shall use their best efforts to agree on its text before its
public dissemination and before making any filings with any Governmental Entity
or national securities exchange with respect to any such press release or
public announcement. In cases where Allied and Xxxxxxx are unable to agree on
a press release or public announcement, the Party proposing it will not issue
or make it unless the proposing Party is required to do so by Law, in which
case the Party so obligated shall use its reasonable efforts to provide a copy
of the press release or public announcement to the other Party before its
filing or public dissemination.
11.6 Expenses. Except as otherwise provided in Section 2.4 or
Article XII, each Party shall pay its own costs and expenses incurred in
connection with the Acquisitions, whether or not the Acquisitions are
consummated. No such costs or expenses shall be paid by or charged to any
Acquired Subsidiary.
11.7 Securities Law Matters. The Xxxxxxx Parties represent and
warrant to the Allied Parties that the Allied Securities to be issued to the
Xxxxxxx Parties under this Agreement are being acquired, and any Allied Warrant
Shares issued upon any exercise of the Allied Warrant, Allied Common Stock
issued pursuant to the Xxxxxxx Subscription Agreement or Additional Allied
Common Shares will be acquired, by the Xxxxxxx Parties for investment, for
their own account and not with a view to, or for resale in connection with, any
distribution of Allied Securities within the meaning of the Securities Act. No
Allied Securities may be sold, transferred, or otherwise disposed of without
registration under the Securities Act and any applicable state or provincial
securities laws, rules, regulations or policies. Notwithstanding such
representations, and subject to the provisions of this Agreement and the terms
of such securities, the Allied Parties agree to permit a sale or transfer of
such securities if Allied obtains satisfactory assurances that the sale or
transfer may be made without registration under the Securities Act and related
rules and regulations (and all applicable state or provincial securities laws,
rules, regulations or policies) including, without limitation receipt by the
Allied of an opinion to such effect from counsel reasonably satisfactory to
Allied, or compliance by the Xxxxxxx Parties with the requirements Rule 144(k)
or Rule 144A under the Securities Act.
Xxxxxxx agrees that all Allied Canada Debentures and all Allied
Finance Debentures may be inscribed with the respective legends set forth on
the respective forms thereof attached as Exhibits to this Agreement, that the
Allied Warrant may be inscribed with the legend set forth on the form of Allied
Warrant attached as an Exhibit to this Agreement, and that all certificates
evidencing Additional Allied Common Shares, Allied Common Shares and all Allied
Warrant Shares, but only if required under the Securities Act and applicable
state or provincial securities laws at the time of their issuance, will be
inscribed with the following restrictive legend:
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"The shares represented by this certificate
have not been registered (or qualified by
prospectus) under the United States Securities Act
of 1933, as amended, or the securities laws of any
state of the United States or any province of
Canada. 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 or prospectus
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."
11.8 Rule 144 Reports. For as long as the Xxxxxxx Parties or any
Affiliate of Xxxxxxx owns shares of Allied Common Stock or the Allied Warrant
representing at least 10% of total number of shares of Allied Common Stock
issued and outstanding from time to time, Allied will
(i) make and keep "current public information"
"available" (as both those terms are defined in Rule 144) at all
times;
(ii) timely file with the SEC in accordance with all
applicable rules and regulations, all reports and other documents (x)
required of Allied for Rule 144, as it may be amended from time to
time (or any rule, regulation, or statute replacing Rule 144) to be
available and (y) required to be filed under Section 15d of the
Exchange Act even if Allied's duty to file those reports or documents
is suspended or otherwise terminated under the terms of Section 15d;
and
(iii) furnish the Xxxxxxx Parties a written statement by
Allied that it has complied with the reporting requirements of the
Exchange Act and Rule 144, together with a copy of the most recent
annual or quarterly report of Allied and such reports and documents
filed by Allied with the SEC as may reasonably be requested by the
Xxxxxxx Parties.
11.9 Use of Xxxxxxx Name. As soon as practicable, and in any event
within 90 days after the Closing Date, the Allied Parties shall cause to be
amended the Articles or Certificate of Incorporation or Organization (or
comparable document) of each Acquired Subsidiary which has the name "Xxxxxxx"
in its corporate name, to remove the name "Xxxxxxx" from its corporate name.
As soon as practicable, and in any event within two years after the Closing
Date, the Allied Parties shall cause the name
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"Xxxxxxx" to be removed from (i) all advertising and marketing materials used
by the Acquired Subsidiaries, (ii) all stationery, purchase orders and other
business forms used by the Acquired Subsidiaries, (iii) all motor vehicles
owned or operated by the Acquired Subsidiaries, (iv) all signs at any location
owned or operated by any Acquired Subsidiary, and (iv) all bank accounts
maintained by any Acquired Subsidiary. From and after the second anniversary
of the Closing Date, no Allied Party will, or will cause or permit any Acquired
Subsidiary or any other Subsidiary or Affiliate of any Allied Party to, use or
employ any name, trade name, assumed name, slogan, logo, trademark or
advertising or marketing materials which contain the name "Xxxxxxx;" provided
however, that nothing in this Section 11.09 shall require any amendment to or
reissuance of any contract or agreement to which any Acquired Subsidiary is a
party or any permit, license, franchise or other authorization issued to any
Acquired Subsidiary, before the expiration of its current term. For as long
during the respective 90-day and two-year periods specified above in this
Section 11.09 as the Allied Parties are diligently pursuing their obligations
under this Section 11.09, the Xxxxxxx Parties grant (i) to those Acquired
Subsidiaries which now have in their corporate names the "Xxxxxxx" the right to
continue using their corporate names, logos and trademarks, and (ii) to all
Acquired Subsidiaries the right to use the name "Xxxxxxx" in all of the other
applications described above in this Section 11.09.
11.10 Environmental Remediation. Within twenty Business Days after
their receipt of the Emcon Environmental Report, the Allied Parties shall
deliver to the Xxxxxxx Parties a written notice (the "Environmental Notice")
stating whether in the judgment of the Allied Parties, acting reasonably, one
or more conditions described in the Emcon Environmental Report (each an
"Environmental Defect") constitutes a breach of the representations and
warranties made by the Xxxxxxx Parties in Section 4.15 to the extent that the
condition to the obligations of Allied to close set forth in Section 9.1(b)
will not be met. If the Environmental Notice states that such condition in
Section 9.1(b) will not be met, then Xxxxxxx may elect at the Closing pay to
Allied an amount (which is based on the Emcon Environmental Report and is
reasonably acceptable to Allied) sufficient to cure the Environmental Defect,
or provide Allied with an undertaking satisfactory to Allied that Xxxxxxx will
assume and pay as it becomes due all amounts relating to the Environmental
Defect, in which event the condition in Section 9.1(b) will be met.
11.11 Xxxxxxx Guaranties. The Allied Parties and those Acquired
Subsidiaries which are Xxxxxxx Parties agree to use all commercially reasonable
efforts, and to cause all other Acquired Subsidiaries to use all commercially
reasonable efforts, to cause each member of the Xxxxxxx Group to be fully and
finally released and discharged from all further liability or obligation in
respect of all Xxxxxxx Guaranties in respect of which such member of the
Xxxxxxx Group is an obligated party, within six months following the Closing
Date. To that end, the Allied Parties and those Acquired Subsidiaries which
are Xxxxxxx Parties agree to use all commercially reasonable efforts to:
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(i) cause all liabilities and obligations of each
Acquired Subsidiary which are guaranteed or secured by a Xxxxxxx
Guaranty to be fully and faithfully performed on a timely basis and in
accordance with their terms;
(ii) secure the surrender of and the return to each
Xxxxxxx Issuer Bank of each letter of credit which is a Xxxxxxx
Guaranty which is outstanding at the Closing Date, without draw
thereon by any beneficiary thereof;
(iii) secure the cancellation and return to Xxxxxxx or to
the issuer thereof, as appropriate, without payment thereunder, of all
Xxxxxxx Guaranties which are performance, suretyship or other bonds;
and
(iv) cause to be delivered to the respective members of
the Xxxxxxx Group written releases, duly executed by all necessary
releasing parties, evidencing the full and final release of each
member of the Xxxxxxx Group liable thereon or thereunder, from all
liabilities and obligations under each Xxxxxxx Guaranty which is a
guaranty or other direct undertaking or commitment on the part of such
member of the Xxxxxxx Group.
For purposes of this Section 11.12, "all commercially reasonable
efforts" on the part of any Allied Party includes:
(i) the offering of a substitution of a like guaranty of
Allied for any Xxxxxxx Guaranty which is a guaranty of Xxxxxxx; and
(ii) the offering to the beneficiary or beneficiaries of
any letter of credit which is a Xxxxxxx Guaranty a substitute letter
of credit having an expiry date no earlier than the expiry date of
such Xxxxxxx Guaranty and issued by a bank having credit ratings by
each of Standard & Poors Rating Group and Xxxxx'x Investor Service,
Inc. which are at least as high as the credit ratings given by such
credit rating organizations for the Xxxxxxx Issuer Bank which is the
issuer of such Xxxxxxx Guaranty.
If at the end of six months following the Closing Date any Xxxxxxx
Guaranty remains outstanding, then no later than the fifth Business Day
following the expiration of such six-month period, the Allied Parties shall
cause to be delivered to Xxxxxxx a letter of credit which shall:
(i) name Xxxxxxx as the beneficiary thereof;
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(ii) be in an amount at least equal to the aggregate
outstanding and undrawn balances of all such outstanding Xxxxxxx
Guaranties;
(iii) be issued by a bank having credit ratings by each of
Standard & Poors Rating Group and Xxxxx'x Investor Service, Inc. which
are at least as high as the credit ratings given by such credit rating
organizations for the Xxxxxxx Issuer Banks;
(iv) have an expiry date no earlier than the expiry date
of the last to expire of the Xxxxxxx Guaranties; provided, however,
that if the letter of credit to be obtained by the Allied Parties for
the benefit of Xxxxxxx pursuant hereto is to be issued with respect to
more than one Xxxxxxx Guaranty, the amount of such letter of credit
will reduce automatically and without any action by any party upon the
expiring date of each Xxxxxxx Guaranty by the amount thereof or upon
the acceptance by the beneficiary of such Xxxxxxx Guaranty of a
substitute letter of credit provided by the Allied Parties; and
(v) be payable at sight to Xxxxxxx upon presentation of a
written, sworn affidavit of an officer of Xxxxxxx stating that the
Xxxxxxx Reclamation Credit issued by such Xxxxxxx Issuer Bank has been
drawn upon by the beneficiary thereof in an amount not less than the
draw being made by Xxxxxxx on such letter of credit.
11.12 Xxxxxxx Board Representation. Promptly after the Closing,
Allied shall increase the size of its Board of Directors to enable Xxxxx X.
Xxxxxxx and Xxxx Xxxxxx, or two other individuals who are officers of Xxxxxxx
designated by Xxxxxxx and reasonably acceptable to Allied, to be appointed to
Allied's Board of Directors. Until the earliest to occur of (i) the fifth
anniversary of the Closing Date or (ii) the first date when the number of
Allied Common Shares held by the Xxxxxxx Parties and all other Affiliates of
Xxxxxxx represents less than ten percent of the number of shares of Allied
voting securities then issued and outstanding, Allied shall, subject to
fiduciary obligations under applicable Law, use its best efforts to cause such
two designees of Xxxxxxx to be nominated for election to Allied's Board of
Directors by the stockholders of Allied. Upon the occurrence of either event
specified in clauses (i) and (ii) set forth in the preceding sentence, the
designees of Xxxxxxx to Allied's Board of Directors shall immediately resign
from the Board of Directors.
11.13 Attendance at Stockholder Meetings. Until the earlier to
occur of the fifth anniversary of the Closing Date or the date on which the
Xxxxxxx Sellers and all of their Affiliates collectively beneficially own a
number of shares of Allied voting securities which would represent less than
ten percent of the then issued and outstanding voting securities of Allied
voting securities, the Xxxxxxx Sellers agree to cause all shares of Allied
voting securities from time to time owned of record or
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beneficially by either of them or any of their Affiliates to be present at all
stockholders meetings of Allied at which the vote of Allied's stockholders is
sought so that they may be counted for the purpose of determining the presence
of a quorum at such meetings.
11.14 Xxxxxxx Standstill. Until the earlier to occur of the fifth
anniversary of the Closing Date or the date on which the Xxxxxxx Sellers and
all of their Affiliates collectively own a number of shares of Allied Common
Stock which would represent less than five percent of the then issued and
outstanding voting securities of Allied, neither Xxxxxxx Seller will, and the
Xxxxxxx Sellers will cause each of its Affiliates not to:
(i) acquire, offer to acquire, or agree to acquire,
directly or indirectly, by purchase or otherwise, any voting
securities or voting rights or direct or indirect rights or options to
acquire any voting securities of Allied or any of its Affiliates other
than as a result of a stock split, stock dividend or similar
recapitalization except the Allied Securities;
(ii) make or cause to be made any proposal for an Allied
Reorganization Transaction, except (x) as expressly contemplated in
this Agreement, or (y) proposals pursuant to customary business
transactions in the ordinary course of Allied's business;
(iii) form, join or in any way participate in a "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) with
respect to any securities of Allied or its Affiliates;
(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 Allied 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 Allied 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 Allied or its
Affiliates;
(v) initiate, propose or otherwise solicit stockholders
for the approval of one or more stockholder proposals with respect to
Allied 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 Allied or
its Affiliates or seek the removal of any member of the Board of
Directors of Allied or its Affiliates;
(vi) in any manner, agree, attempt, seek or propose (or
make any request for permission with respect thereto) to deposit any
securities of Allied
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or its Affiliates, directly or indirectly, in any voting trust or
similar arrangement or to subject any securities of Allied or its
Affiliates to any other voting or proxy agreement, arrangement or
understanding;
(vii) directly or indirectly offer, sell or transfer any
Allied Common Stock or rights to receive Allied Common Stock
(including without limitation the Allied Common Shares, the Allied
Warrant Shares, Additional Allied Common Shares and any Allied Common
Stock, or rights to receive Allied Common Stock, pursuant to the
Xxxxxxx Subscription Agreement) except for (v) sales made in
compliance with the Stock Registration Agreement, (w) sales made in
compliance with Rule 144 under the Securities Act as in effect on the
Closing Date, (x) distributions or dividends of Allied Common Stock to
the shareholders of Xxxxxxx on a pro rata basis to all shares of all
classes of Xxxxxxx'x then outstanding capital stock, (y) sales to a
Person in a private transaction if, following such sale, such Person
and its Affiliates will beneficially own (used herein as defined in
Rule 13d-3 under the Exchange Act) 9% or less of the total number of
shares of Allied Common Stock then outstanding, and (z) sales to a
Person who makes an Allied Reorganization Transaction on the terms and
conditions of such Reorganization Transaction;
(viii) directly or indirectly offer, sell or transfer the
Allied Warrant except in compliance with the terms of Section 3.1 of
the Allied Warrant;
(ix) disclose any intention, plan or arrangement, or make
any public announcement (or request permission to make any such
announcement), or induce any other Person to take any action,
inconsistent with the foregoing;
(x) enter into any negotiations, arrangements or
understandings with any third party with respect to any of the
foregoing;
(xi) advise, assist or encourage or finance (or assist or
arrange financing to or for) any other Person in connection with any
of the foregoing; or
(xii) otherwise act in concert with others, to seek to
control or influence the management, Board of Directors or policies of
Allied or its Affiliates;
provided, that this Section 11.14 shall not restrict or inhibit the rights of
LTI or Xxxxxxx to exercise its voting rights as a stockholder of Allied
(subject to Section 11.13 hereof); provided further that, the provisions of
paragraphs (i) through (xii), above, shall not apply to any Allied
Reorganization Transaction proposed by Xxxxxxx within 30 days
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of the proposal of an Allied Reorganization Transaction by a Person that is not
cooperating or acting in collusion with or an Affiliate of Xxxxxxx.
11.15 Transition Agreement. Prior to the Closing, Xxxxxxx and
Allied agree to use their best efforts to enter into a transition agreement
(the "Transition Agreement") that will provide that each of them will, on
mutually agreeable terms, assist the other in providing for an orderly
transition regarding the ownership and operation of the business conducted by
the Acquired Subsidiaries at the Closing. The Transition Agreement will
provide that each of them will make available to the other management services
including information processing, billing, payroll and payables management,
cash management and leases or subleases of office space, all of which will be
for a term of no more than one year. The Transition Agreement will further
provide that effective on the time of the Closing, Xxxxxxx will terminate all
insurance coverage of any type relating to the Acquired Subsidiaries and Allied
will obtain insurance coverage regarding the Acquired Subsidiaries effective on
the time of the Closing. Allied shall have the right to amend, modify or
terminate any and all Xxxxxxx Employee Plans (including the Xxxxxxx Pension
Plans) to the extent allowed by law and relevant collective bargaining
agreements.
ARTICLE XII
TAX MATTERS
12.1 Section 338 Election.
(i) Allied U.S. and LTI shall join in an election to have
the provisions of Section 338(h)(10) of the Code and similar
provisions of federal, state, local or foreign law (where
permissible) ("Section 338(h)(10)Election") apply to the acquisition
of the stock of each Acquired U.S. Subsidiary described herein
whereby (i) each Acquired U.S. Subsidiary will be treated as having
sold all of its assets in a single transaction as of the close of
business on the Closing Date while a member of the LTI U.S.
Consolidated Tax Group and (ii) no gain or loss will be recognized by
LTI or any Acquired U.S. Subsidiary with respect to the sale of its
shares of any Acquired U.S. Subsidiary. The election will include the
execution and subsequent filing of Internal Revenue Service Form
8023-A pursuant to the requirements stated therein. Allied U.S.
shall, within 120 days of the Closing Date, provide to LTI an
allocation of the deemed purchase price among the assets of the
Acquired U.S. Subsidiaries in accordance with Code Sections 338 and
1060 and any comparable provisions of state, local or foreign law, as
appropriate (including copies of detailed workpapers and proposed
attachments to Form 8023-A). Such allocation shall be deemed
acceptable to LTI unless it notifies Allied U.S. of any objections
within 60 days
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of receipt of such allocation. If LTI and Allied are unable to agree
on such allocation within 210 days of the Closing Date, then Xxxxxx
Xxxxxxxx L.L.P. or some other independent accounting firm mutually
acceptable to the parties hereto shall make a binding determination
with respect to such allocation, the fees and expenses of which shall
be paid equally by LTI and Allied U.S.
(ii) The Allied Parties may, at their election, make
elections under Section 338(g) of the Code with respect to one or more
of the Acquired Canadian Subsidiaries.
(iii) For purposes of the Section 338(h)(10) Election,
value equal to 7,225,000 shares of Allied Common Stock shall be
allocated to the LWSI Group Subsidiaries which are Acquired Canadian
Subsidiaries, and the remainder to the Acquired U.S. Subsidiaries.
(iv) Within 60 days of delivery to LTI of the allocation
schedule described in Section 12.1(i) above, Xxxxxxx and LTI shall
properly execute and deliver to Allied IRS Form 8023-A (together with
attachments) and other forms that are required to be submitted to any
federal, state, county, or local taxing authority in connection with
the Section 338(h)(10) Election for each Acquired U.S. Subsidiary, and
in connection with the Section 338(g) election for each Acquired
Canadian Subsidiary. In the event the parties have not yet agreed on
the allocation described in Section 12.1(i), the Section 338 Forms
shall still be delivered to Allied, and all Tax Returns filed on a
basis consistent with the binding determination of an accounting firm
described in Section 12.1(i).
(v) After the date of this Agreement, none of the Allied
Parties, any Acquired Subsidiary, nor the Xxxxxxx Sellers shall take,
or fail to take, any action which may cause the acquisition of the
Acquired Subsidiaries to not be eligible for the Sections 338(g) and
338(h)(10) elections set forth herein.
12.2 Future Tax Returns.
(i) LTI shall prepare and file in a timely fashion, its
federal, state and local corporate income Tax Returns of the Acquired
U.S. Subsidiaries for the periods ended August 31, 1996 and August 31,
1997 (which shall include the income of the Acquired U.S. Subsidiaries
for the periods ended August 31, 1996 and the Closing Date). The Tax
Return for the period ended August 31, 1997 shall include the results
of operations of the Acquired U.S. Subsidiaries for the Pre-Closing
Tax Period beginning September 1, 1996, and ending on the Closing
Date, and all income recognized as a result of all election(s) under
Code Sections 338(h)(10) and 338(g). LTI shall pay or discharge any
and all U.S. Tax reflected on such Tax Returns, including the tax
liability of any member or
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former member of the Xxxxxxx Sellers, however measured, for which any
Acquired Subsidiary is or may be held liable. Each such payment shall
be made on or before the date any such payment is due. LTI shall
receive any tax refunds reflected on such returns. The Acquired
Subsidiaries will promptly provide the information to LTI to prepare
such returns.
(ii) Xxxxxxx shall prepare and file in a timely fashion,
all corporate federal and provincial income Tax Returns of the
Acquired Canadian Subsidiaries for the periods ended August 31, 1996
and the day preceding the Closing Date. Such returns shall include
the results of operations of Acquired Canadian Subsidiaries for the
period ending on the close of business on the day preceding the
Closing Date. Xxxxxxx shall directly pay or discharge any and all
Taxes reflected on such Tax Returns, including the tax liability of
each Acquired Canadian Subsidiary and any member or former member of
the Xxxxxxx Sellers, however measured, for which any Acquired
Subsidiary is or may be held liable. Each such payment shall be made
on or before the date any such payment is due. Xxxxxxx shall receive
any tax refunds reflected on such returns. The Acquired Subsidiaries
will promptly provide the information to Xxxxxxx to prepare such
returns.
(iii) (A) Allied shall timely prepare and file, or cause
the Acquired Subsidiaries to timely prepare and file, all other
applicable Tax Returns for SWM Group Income Taxes for taxable periods
ending subsequent to the Closing Date, including any such returns
which relate to periods which commenced on or prior to the Closing
Date.
(B) The Acquired Subsidiaries shall pay or cause to be
paid any and all Taxes (and applicable penalties and interest, if any)
due as a result of the Tax Returns required to be filed pursuant to
the preceding clause (A).
(C) Prior to filing the Tax Returns referred to in
Section 12.2(iii)(A), the Xxxxxxx Sellers shall reimburse the Acquired
Subsidiaries or the Allied Parties for any SWM Group Income Taxes to
be paid in connection with Tax Returns filed pursuant to this Section
12.2(iii)(A) attributable to SWM Group Income Taxes accrued or
recognized prior to or including the Closing Date, including the
deemed sale of the assets of the Acquired Subsidiaries on the Closing
Date pursuant to the Section 338(h)(10) Election for the Acquired U.S.
Subsidiaries, any Section 338(g) election for the Acquired Canadian
Subsidiaries, and any liability that arises because one or more of the
Acquired Subsidiaries ceased on the Closing Date to be an Affiliate of
the Xxxxxxx Sellers. Allied or the Acquired Subsidiaries shall
reimburse LTI for any payment made in excess of Xxxxxxx' pro rata
share of tax computed based on the income in (iv) below.
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(D) Allied shall provide the Xxxxxxx Sellers or their
representatives a copy of the Tax Returns prepared pursuant to this
Section 12.2(iii), and the documentation related thereto, prior to
filing such Tax Returns.
(E) State, provincial and local Tax Returns shall be
prepared on a basis reasonably consistent with prior Tax Returns of
the Acquired Subsidiaries and the Code Section 338 allocations set
forth herein.
(iv) With respect to all taxable periods including any
Pre-Closing Tax Period, the Xxxxxxx Sellers, Allied, and the Acquired
U.S. Subsidiaries will make all computations, allocations,
determinations and elections affecting the Xxxxxxx Sellers, the
Acquired U.S. Subsidiaries and Acquired Canadian Subsidiaries in
accordance with the provisions of the Treasury regulations promulgated
under Section 338 and 1502 of the Code, the provisions of the Income
Tax Act and state, provincial and local income tax rules.
12.3 Tax Covenants.
(i) Without the prior written consent of Allied, neither
of the Xxxxxxx Sellers nor any Affiliate of the Xxxxxxx Sellers shall,
to the extent it may affect or relate to any of the Acquired
Subsidiaries, make or change any tax election, change any annual tax
accounting period, adopt or change any method of tax accounting, file
any amended Tax Return, enter into any closing agreement, settle any
Tax claim, assessment or proposed assessment, surrender any right to
claim a Tax refund, consent to any extension or waiver of the
limitation period applicable to any Tax claim or assessment or take or
omit to take any other action, if any such action or omission would
have the effect of increasing any post-closing Tax liability of any
Acquired Subsidiary, Allied or any Affiliate of Allied.
(ii) Without the prior written consent of Xxxxxxx, neither
Allied nor its Affiliates shall, to the extent it may affect or relate
to any of the Acquired Subsidiaries, make or change any tax election,
file any amended Tax Return, enter into any Closing Agreement, settle
any Tax claim, assessment or proposed assessment, surrender any right
to claim a Tax refund, consent to any extension or waiver of the
limitation period applicable to any Tax claim or assessment or take or
omit to take any other action, if any such action or omission would
affect a Pre-Closing Tax Period.
(iii) Allied and the Xxxxxxx Sellers agree that so long as
any books, records and files retained by the Xxxxxxx Sellers and their
Affiliates relating to the business of the Acquired Subsidiaries, or
the books, records and files delivered to the control of Allied
pursuant to this Agreement to the extent they
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relate to the operations of the Acquired Subsidiaries prior to the
Closing Date, remain in existence and available, each party (at its
own expense) shall have the right upon prior notice to inspect and to
make copies of the same at any time during business hours for any
proper purpose. Allied and the Xxxxxxx Sellers and their Affiliates
shall use reasonable efforts not to destroy or allow the destruction
of any such books, records and files without first providing 60 days'
written notice of intention to destroy to the other, and allowing such
other party to take possession of such records.
(iv) Allied will make its personnel or that of the
Acquired Subsidiaries available to answer requests related to Tax
Proceedings as defined in Section 12.5(ii). Allied will either
provide documents needed to respond to federal, state and provincial
information requests or queries for such proceedings within 30 days or
allow Xxxxxxx to take possession of records necessary to answer such
requests. Unless one of the preceding provisions requires otherwise,
the Xxxxxxx Seller's share of income to be reported on such Acquired
Subsidiaries' return will be computed as of the Closing Date.
12.4 Other Tax Matters, Post-Closing Cooperation.
(i) If the Allied Parties receive any Tax Refund
(including interest and penalties refunded) for a Pre-Closing Tax
Period of an Acquired Subsidiary, other than any such Tax Refund
arising from the application of a loss or Tax credit arising in a
Post-Closing Tax Period, then such persons shall pay to the Xxxxxxx
Sellers the actual amount of such Tax Refund as and when received, on
an after-tax basis.
(ii) If the Allied Parties realize any Tax Benefit in a
Post-Closing Tax Period arising from the application of a loss
incurred or Tax credit earned by an Acquired Subsidiary in a
Pre-Closing Tax Period, then such persons shall pay to the Xxxxxxx
Sellers the actual amount of such Tax Benefit realized 183 days
following the end of the particular Post-Closing Tax Period during
which such Tax Benefit was realized, on an after-tax basis.
(iii) All transfer, documentary, sales, use, stamp,
registration, goods and services, value added and other such Taxes and
fees (including any penalties and interest) incurred in connection
with the sale of the stock of LWSI, LMS, LWSC or any of their
subsidiaries, or otherwise in connection with the transactions
effected pursuant to this Agreement (collectively, the "Transfer
Taxes") shall be borne and paid by the Xxxxxxx Sellers. To the extent
permissible under Tax law or regulations, the Xxxxxxx Sellers shall
undertake all actions and file such Tax Returns or other forms or
instruments as may be
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necessary to make payment of any Transfer Taxes due prior to or on the
Closing Date, and present evidence of such payment at the Closing Date
to Allied.
(iv) Any payment to be made to any party under Section 12
shall be made within 15 days of demand (or receipt in the event of a
refund of any overpayment). Payment after that time shall bear
interest (y) if for the U.S. at the rate of interest prescribed by IRC
Sec 6621(a)(1) and (z) if for Canada as prescribed by Income Tax
Regulation 4301(b).
12.5 Tax Controversies.
(i) Allied and Xxxxxxx shall each use reasonable efforts
to keep the other advised as to the status of Tax audits and
litigation involving any direct, indirect or contingent Taxes which
could give rise to a liability of the Xxxxxxx Sellers to Allied under
this Agreement for any pre-closing period (a "Tax Liability Issue").
Such efforts shall include attorney comfort letters provided to
Allied's independent auditors and discussions with the Laidlaw
attorneys representing the Allied Subsidiaries as requested by Allied.
Xxxxxxx agrees to timely notify Allied regarding any proposed written
communication (i.e., communications not relating to inquiries or
requests for information) by Xxxxxxx to any such Taxing Authority with
respect to a Tax Liability Issue to the extent that the issue would
impact a post-closing period of Allied or the Acquired Subsidiaries.
Allied shall have the right to consult with Xxxxxxx regarding any
response to such communications.
(ii) Xxxxxxx shall have full responsibility for and
discretion in handling any Tax Controversy including, without
limitation, an audit, a protest to the appeals division of the IRS, or
similar state or local appellate division, an objection to Revenue
Canada or any provincial tax authority and litigation in the U.S. Tax
Court, the Tax Court of Canada or any other court of competent
jurisdiction (a "Tax Proceeding") for any pre-closing period. Allied
or the Acquired Subsidiaries shall give the Xxxxxxx Sellers the
ability to handle any Tax Controversy whether by power of attorney or
as otherwise required by the Taxing Authority. Unless the Xxxxxxx
Sellers tender payment of any tax owed, with penalty and interest, to
Allied or the Tax Authority, final settlement of any Tax Controversy
will require Allied approval. However, upon request by Allied and
with the consent of Xxxxxxx, Allied at its own expense shall have full
responsibility and discretion in handling any Tax Proceeding for any
Pre-closing tax period.
(iii) In the event that any one of the Acquired
Subsidiaries is required or elects to pay any Tax, file any bond or
deposit any amount in connection with a Tax Proceeding (or pay any
Canadian Tax it may decide to object to or
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otherwise contest), Xxxxxxx shall loan to Allied no later than three
(3) Business Days before such payment is required to be made, without
interest and until a final determination with respect to such Tax has
occurred, one hundred percent of the amount to be paid or deposited by
Allied. Within three (3) Business Days of the receipt by Allied of a
refund of any amount loaned to it by Xxxxxxx (including any interest
received by Allied), Allied shall pay such refunded amount to Xxxxxxx
net of any Tax cost incurred by Allied and its Affiliates as a result
of such refund.
(iv) If the completion or settlement of any Tax Proceeding
relating to a Pre-Closing Tax Period, tax controversy or amended Tax
Return gives rise to a tax benefit for any Post-Closing Tax Period to
the Allied Parties, the Acquired Subsidiaries and any Affiliates, then
such persons shall pay to Xxxxxxx the actual amount of such tax
benefit realized by such persons as it relates to such Pre-Closing Tax
Period as and when received on an after tax basis. No payment will be
made under this paragraph for less than $50,000 per period or for a
period of more than ten years.
(v) If the completion or settlement of any Tax Proceeding
relating to a Pre-Closing Tax Period, tax controversy or amended Tax
Return gives rise to a tax liability for any Post-Closing Tax Period
to the Allied Parties, the Acquired Subsidiaries and any Affiliates,
then Xxxxxxx shall pay to such persons the actual amount of such tax
liability on an after-tax basis as and when paid. No payment will be
made under this paragraph for less than $50,000 per period or for a
period of more than ten years.
(vi) By written notice to Xxxxxxx, Allied shall have the
right to instruct Xxxxxxx to forego proceedings with respect to one or
more items for which Xxxxxxx may be liable to indemnify Allied. Such
notice shall constitute a waiver of the right of Allied to
indemnification for any Taxes arising out of such item for the period
or periods involved, but shall not otherwise waive any rights of
Xxxxxxx to any refund of a deposit under Section 12.5(iii).
12.6 Certain Pending Tax Controversies.
(i) C$27,421,816 is on deposit with Revenue Canada and
the Provincial tax authorities with respect to the Canlea controversy.
Such deposit shall be treated as a loan from Xxxxxxx to PWSL made
pursuant to Section 12.5(iii) and returned to Xxxxxxx in accordance
with that provision.
(ii) Allied and its Subsidiaries shall not cause the debt
payable by PWSL to 635952 Ontario Ltd. (a wholly owned subsidiary of
PWSL, and an Acquired Canadian Subsidiary) in the amount of
C$37,847,056, to be settled or
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extinguished by way of payment in whole or in part, canceled, settled
by way of corporate reorganization, converted or exchanged for some
other property, or do any such thing (or fail to do any such thing)
which would cause the debt to be unenforceable in law, without the
written consent of Xxxxxxx.
ARTICLE XIII
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
13.1 Nature of Statements. All, but only those, statements
contained in this Agreement or any Disclosure Schedule or certificate delivered
or by on behalf of a Party under this Agreement shall be deemed representations
and warranties made by that Party in connection with the transactions
contemplated by this Agreement.
13.2 Survival of Representations and Warranties. Regardless of any
investigation made at any time by or on behalf of any Party or of any
information any Party may have as a result of any such investigation, all
representations and warranties made in or pursuant to this Agreement (including
in any Disclosure Schedule or certificate delivered under this Agreement)
shall, except as otherwise provided in this Section 13.2, survive the Closing
and shall continue in effect indefinitely thereafter unless and until
terminated as provided in this Section 13.2. The representations and
warranties made by the Xxxxxxx Sellers in Article IV (other than in Sections
4.2, 4.3, 4.4, 4.5, 4.11, 4.13 and 4.15 of Article IV) and the representations
and warranties made by the Allied Parties in Article V (other than in Sections
5.2, 5.3, 5.4, 5.5, the first sentence of Section 5.12, 5.13 and 5.15 of
Article V) shall terminate on the date which is 18 months following the Closing
Date. The representations and warranties made by the Xxxxxxx Sellers in
Sections 4.2, 4.3, 4.4, 4.5 and 4.11, and the representations and warranties
made by Allied in Sections 5.2, 5.3, 5.4, 5.5 and the first sentence of Section
5.12 shall survive the Closing indefinitely. The representations and
warranties made by the Xxxxxxx Sellers in Section 4.13, the representations and
warranties made by the Allied Parties in Section 5.13, and the covenants,
obligations and agreements set forth in Article XII shall terminate on the date
the statute of limitations and times for assessment (giving effect to any
waiver, mitigation or extension thereof) with respect to any Tax liability in
question has run in favor of all Acquired Subsidiaries and the LTI-US
Consolidated Tax Group, or Allied and its Subsidiaries, as the case may be,
against the U.S. federal, Canadian federal, state provincial, or local
government, as the case may be. The representations and warranties by the
Xxxxxxx Sellers in Section 4.15 shall (i) terminate on the Closing Date as to
all matters that are disclosed in writing to the Allied Parties at least 5
Business Days prior to the Closing pursuant to Section 4.15 of this Agreement
or disclosed with specificity in the Emcon Environmental Report or are
otherwise disclosed by Xxxxxxx in writing to Allied at least 5 Business Days
before the Closing, and (ii) terminate on the third anniversary of the Closing
Date as to all
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matters other than those described in the preceding clause (i) which are known
to the Xxxxxxx Sellers on the Closing Date. The representations and warranties
made by the Allied Parties in Section 5.15 shall terminate on the third
anniversary of the Closing. If a bona fide claim is asserted before the
expiration of the survival period of a representation or warranty, such
representation, warranty, covenant, obligation or agreement shall continue in
effect until the claim is settled, adjudicated or otherwise resolved. With
respect to this Section 13.2, "known" means with respect to any matter referred
to in clause (ii) above that (x) the matter is known to any Person who is or
was an officer, director, employee or agent of, or consultant to, any member of
the Xxxxxxx Group (including the Acquired Subsidiaries) on or before the
Closing Date or (y) any such Person is aware of facts which would have led a
reasonable Person to have conducted an investigation or inquiry likely to have
led to discovery of such matter.
ARTICLE XIV
INDEMNIFICATION
The respective indemnification obligations of the Xxxxxxx Sellers and
Allied are as follows:
14.1 Indemnification by the Xxxxxxx Sellers. The Xxxxxxx Sellers
jointly and severally agree to pay and to indemnify and hold harmless each
Allied Party and each Acquired Subsidiary and their respective Affiliates (but,
in the case of the Acquired Subsidiaries, only their respective Affiliates
after the Closing), successors and assigns from and against any and all Damages
suffered by the Allied Parties or the Acquired Subsidiaries which are caused
by, arising out of or in respect of:
(i) any U.S. federal income Tax liability of the LTI US
Consolidated Tax Group for all taxable periods ending before, on or
after the Closing Date;
(ii) all other SWM Group Income Taxes attributable to any
Pre-Closing Tax Period (including any transaction consummated in such
Pre-Closing Tax Period);
(iii) any Tax resulting from or attributable to the
distribution of the Retained Subsidiaries and the Retained Land;
(iv) any Tax on or attributable to the elimination,
reversal, release, satisfaction, distribution, or discharge of
Intercompany Indebtedness and Intercompany Investments of the Acquired
Subsidiaries (including any intercompany items solely between the
Acquired Subsidiaries, as well as items between Xxxxxxx and other
Xxxxxxx Affiliates), and any other reorganization
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steps or other actions taken by Xxxxxxx and its Affiliates in placing
the Acquired Subsidiaries in the condition required for Closing
(including, without limitation, the actions set forth in Section 3.2);
(v) any obligation of Allied or the Acquired Subsidiaries
to contribute to the payment of any SWM Group Income Taxes determined
on a consolidated, combined or unitary basis allocable to any
Pre-Closing Period with respect to a group of corporations that
includes or included the Acquired Subsidiaries;
(vi) any (x) Pre-Closing Xxxxxxx Insurance Claims, and (y)
liability (including any Environmental Claim relating to any
Environmental Law) arising out of the activities, business, assets or
operations of any member of the Xxxxxxx Group other than the Acquired
Subsidiaries (excluding the Option Assets), including their
predecessors, affiliates, successors and assigns;
(vii) any claim by any member of the Xxxxxxx Group against
any Acquired Subsidiary based on any event occurring or condition
existing on or before the Closing Date;
(viii) any breach or default in the performance by either
Xxxxxxx Seller of any covenant or agreement made by such Xxxxxxx
Seller in this Agreement or in any Ancillary Agreement to which either
Xxxxxxx Seller is a party;
(ix) any breach of warranty or inaccurate or erroneous
representation made by either Xxxxxxx Seller in Article IV of this
Agreement (other than the representations and warranties set forth in
Sections 4.2, 4.3, 4.4, 4.5, 4.11, 4.13 and 4.15 of this Agreement) or
in the Xxxxxxx Disclosure Schedule or in any certificate delivered by
or on behalf of the Xxxxxxx Sellers under, or concerning the
representations and warranties made in Article IV of this Agreement
(other than the representations and warranties set forth in Sections
4.2, 4.3, 4.4, 4.5, 4.11, 4.13 and 4.15);
(x) any breach of warranty or inaccurate or erroneous
representation made by either Xxxxxxx Seller in Sections 4.2, 4.3,
4.4, 4.5, 4.11 and 4.13 of this Agreement or the Xxxxxxx Disclosure
Schedule related to such representations and warranties or the
certificate delivered by or on behalf of the Xxxxxxx Sellers under, or
concerning such representations and warranties; and
(xi) any breach of warranty or inaccurate or erroneous
representation made by either Xxxxxxx Seller in Section 4.15 of this
Agreement or the Xxxxxxx Disclosure Schedule related to such
representation or warranties or the certificate delivered by or on
behalf of the Xxxxxxx Seller under, or concerning such
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representations and warranties, but only to the extent any such
warranty or representation survives the Closing pursuant to Section
13.2 of this Agreement.
provided, however, that the amount of any Damages in respect of which the
Xxxxxxx Parties shall be required to indemnify the Allied Parties under clauses
(viii) and (ix) above (but not under clauses (i) through (vii), clause (viii)
(to the extent such clause relates to performance by the Xxxxxxx Parties of the
covenants and agreements contained in clause (ii) of the final paragraph of
Section 6.1) inclusive, and clauses (x) and (xi) of this Section 14.1) shall be
limited to the amount by which the aggregate of all such Damages exceeds
$25,000,000; and provided further that no claim for Damages against either
Xxxxxxx Seller made under clauses (i) through (vii), inclusive, and clauses (x)
and (xi) of this Section 14.1 shall be reduced, modified or impaired by virtue
of the fact that any representation and warranty made by the Xxxxxxx Sellers in
Sections 4.2, 4.3, 4.4, 4.5, 4.11, 4.13 and 4.15 shall have been breached or
inaccurate or erroneous in any respect. The amount of any Damages in respect
of which the Xxxxxxx Parties shall be required to indemnify the Allied Parties
under clause (xi) above will be limited to the amount by which the aggregate of
all such Damages exceeds $1,000,000. For purposes of this Section 14.1, the
representations and warranties shall be read as if references therein to the
materiality to the Xxxxxxx Sellers and the Acquired Subsidiaries or any of them
of any condition, fact, statement, event or act (including all references to
"Material Adverse Effects" and "in all material respects") were deleted and the
effect of any such references were deleted altogether. Thus, for example: (i)
any representation that a statement is true and correct in all material
respects shall be read as a representation that the statement is true and
correct; (ii) any representation that a condition exists except to the extent
that its failure to exist would not have a Material Adverse Effect on the
Xxxxxxx Sellers or the Acquired Subsidiaries, as the case may be, shall be read
as a representation that such condition exists; and (iii) any representation
that no incidents of a specific nature have occurred that would have a Material
Adverse Effect on the Xxxxxxx Sellers or the Acquired Subsidiaries, as the case
may be, shall be read as a representation that no incidents of such nature have
occurred. For purposes of this Section 14.1, the representations and
warranties shall be read as if references therein to the "knowledge of the
Xxxxxxx Sellers" were deleted in their entirety.
14.2 Indemnification by Allied. Allied agrees to pay and to
indemnify and hold harmless and defend each Xxxxxxx Seller and its Affiliates
(but not any Acquired Subsidiary after the Closing), and their respective
successors and assigns from and against any and all Damages suffered by the
Xxxxxxx Parties which are caused by or arising out of or in respect of:
(i) the Xxxxxxx Guaranties which are listed and
identified in Section 4.19 of the Xxxxxxx Disclosure Schedule;
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(ii) any breach or default in the performance by any
Allied Party of any covenant or agreement of such Allied Party
contained in this Agreement or any Ancillary Agreement to which any
Allied Party is a party;
(iii) any breach of warranty or inaccurate or erroneous
representation made by such Allied Party in Article V of this
Agreement (other than the representations and warranties set forth in
Sections 5.2, 5.3, 5.4, 5.5 and the first sentence of 5.12; and
(iv) any breach of warranty or inaccurate or erroneous
representation made by such Allied Party in Sections 5.2, 5.3, 5.4,
5.5 and the first sentence of 5.12 of this Agreement;
provided, however, that the amount of any Damages in respect of which Allied
shall be required to indemnify the Xxxxxxx Sellers under clauses (ii) and (iii)
of this Section 14.2 shall (but not clauses (i) and (iv) of this Section 14.2)
be limited to the amount by which the aggregate of all such Damages exceeds
$25,000,000. For purposes of this Section 14.2, the representations and
warranties shall be read as if references therein to materiality to the Allied
Parties or any of them of any condition, fact, statement, event or act
(including all references to "Material Adverse Effects" and "in all material
respects") were deleted and the effect of any such references were deleted
altogether. Thus, for example: (i) any representation that a statement is true
and correct in all material respects shall be read as a representation that the
statement is true and correct; (ii) any representation that a condition exists
except to the extent that its failure to exist would not have a Material
Adverse Effect on the Allied Parties shall be read as a representation that
such condition exists; and (iii) any representation that no incidents of a
specific nature have occurred that would have a Material Adverse Effect on the
Allied Parties shall be read as a representation that no incidents of such
nature have occurred. For purposes of this Section 14.2, the representations
and warranties shall be read as if references therein to the "knowledge of the
Allied Parties" were deleted in their entirety.
The obligations of Allied under this Section 14.2 (other than the
obligation to indemnify and hold harmless the Xxxxxxx Sellers with respect to
the Xxxxxxx Guarantees referred to in clause (i) above) shall be subordinated
to the obligations of Allied and its subsidiaries under the Credit Facility (as
defined in the Guaranties) and the Senior Subordinated Debentures to the same
extent and with the same extent as the obligations of Allied under the
Guaranties are subordinated to Senior Indebtedness (as such term is defined in
the Guaranties). If so requested by Allied or by any holder of any
Indebtedness incurred pursuant to the Credit Facility or by any holder of any
of the Senior Subordinated Debentures, the Xxxxxxx Sellers shall execute such
additional documents and agreements as may be requested from time to time to
evidence the subordination contemplated hereby. Nothing contained in this
Section 14.2 will be
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deemed to subordinate the obligation of the Allied Parties or the Acquired
Subsidiaries to pay to the Xxxxxxx Seller any amounts received by them as a
refund of taxes pursuant to Section 12.6. Allied shall not make any payments
under this Section 14.2 to the Xxxxxxx Sellers (other than payments pursuant to
the obligation to indemnify and hold harmless the Xxxxxxx Sellers with respect
to the Xxxxxxx Guaranties referred to in clause (i) above) as long as the
Credit Facility (as defined in the Guaranties) and the Senior Subordinated
Debentures are in place and in effect, provided that any payment that would
have been required to be paid pursuant to this Section 14.2 but for this
paragraph will accrue interest at 7% from the date such amount would have been
paid, and such amount together with accrued interest shall become due 91 days
following the termination of the Credit Facility and after the Indebtedness
incurred pursuant to the Credit Facility referred to in the Commitment Letter
and the Indebtedness evidenced by the Senior Subordinated Debentures have been
indefeasibly paid in full in cash.
14.3 Third Party Claims. If any Party (for purposes of this Section
14.3, an "Indemnified Party") becomes aware of a fact, circumstance, claim,
situation, demand or other matter for which it or any other Indemnified Party
has been indemnified under this Article XIV and which has resulted or could
result in a liability owed by the Indemnified Party to a third party or a claim
otherwise advanced by a third party against the Indemnified Party (any such
item being herein called a "Third Party Claim"), the Indemnified Party, shall
give prompt written notice of the Third Party Claim to the Party obligated to
provide indemnity with respect to such Third Party Claim (for purposes of this
Section 14.3, the "Indemnifying Party"), requesting indemnification therefor,
specifying the nature of and specific basis for the Third Party Claim and the
amount or estimated amount thereof to the extent then feasible; provided,
however, a failure to give such notice will not waive any rights of the
Indemnified Party except to the extent the rights of the Indemnifying Party are
actually materially prejudiced by such failure. The Indemnifying Party shall
have the right to assume the defense or investigation of such Third Party Claim
and to retain counsel and other experts to represent the Indemnified Party and
shall pay the fees and disbursements of such counsel and other experts. If
within 30 days after receipt of the request (or five days if litigation is
pending) the Indemnifying Party fails to give notice to the Indemnified Party
that the Indemnifying Party assumes the defense or investigation of the Third
Party Claim, an Indemnified Party may retain counsel and other experts (whose
fees and disbursements shall be at the expense of the Indemnifying Party) to
file any motion, answer or other pleading and take such other action which the
Indemnified Party reasonably deems necessary to protect its interests or those
of the Indemnifying Party until the date on which the Indemnified Party
receives such notice from the Indemnifying Party. If an Indemnifying Party
assumes the defense or investigation and retains such counsel and other
experts, any Indemnified Party shall have the right to retain its own counsel
and other experts, but the fees and expenses of such counsel and other experts
shall be at the expense of the Indemnified Party unless (i) the Indemnifying
Party and the Indemnified Party mutually agree to the retention of such
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counsel and other experts or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnifying Party and the
Indemnified Party and representation of both parties by the same counsel would,
in the opinion of counsel retained by the Indemnifying Party, be inappropriate
due to actual or potential differing interests between them.
If requested by the Indemnifying Party, the Indemnified Party agrees
to cooperate with the Indemnifying Party and its counsel in contesting any
Third Party Claim which the Indemnifying Party defends, or, if appropriate and
related to the Third Party Claim in question, in making any counterclaim
against the person asserting the Third Party Claim, or any cross-complaint
against any person. No Third Party Claim may be settled by the Indemnified
Party without the consent of the Indemnifying Party, which consent will not be
unreasonably withheld. Unless the Indemnifying Party agrees in writing that
the Damages to the Indemnified Party resulting from such settlement are fully
covered by the indemnities provided herein and that such Damages are fully
compensable in money, no Third Party Claim may be settled without the consent
of the Indemnified Party, which consent will not be unreasonably withheld.
Except with respect to settlements entered without the Indemnified Party's
consent pursuant to the immediately preceding sentence, to the extent it is
determined that the Indemnified Party has no right under this Article XIV to be
indemnified by the Indemnifying Party, the Indemnified Party shall promptly pay
to the Indemnifying Party any amounts previously paid or advanced by the
Indemnifying Party with respect to such matters pursuant to this Article XIV.
After the delivery of a notice of a Third Party Claim hereunder, at
the reasonable request of the Indemnifying Party the Indemnified Party shall
grant the Indemnifying Party and its representatives full and complete access
to the books, records and properties of the Indemnified Party to the extent
reasonably related to the matters to which the notice relates. The
Indemnifying Party will not disclose to any third person (except its
representatives) any information obtained pursuant to the preceding sentence
which is designated as confidential by the Indemnified Party and which is not
otherwise generally available to the public, except as may be required by
applicable law. The Indemnifying Party shall request its representatives not
to disclose any such information (except as may be required by applicable law).
All such access shall be subject to the normal safety regulations of the
Indemnified Party, and shall be granted under conditions which will not
unreasonably interfere with the business and operations of the Indemnified
Party.
14.4 Claims Between the Parties. If any Party (for purposes of
this Section 14.4, an "Indemnified Party") becomes aware of a fact,
circumstance, claim, situation, demand or other matter (other than an Third
Party Claim) for which it or any other Indemnified Party has been indemnified
under this Article XIV and which has resulted or could result in a liability
(any such items being herein called a "Claim") being owed
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to the Indemnified Party by another Party (the "Indemnifying Party"), the
Indemnified Party shall give prompt written notice to the Indemnifying Party of
the Claim, stating the nature and basis of the Claim and the amount claimed
thereunder, together with supporting information to the Claim, if any. If the
Indemnifying Party does not notify the Indemnified Party within 30 days from
the date such Claim notice is given that it disputes the Claim, the amount of
the Claim shall conclusively be deemed to be a liability of the Indemnifying
Party hereunder.
14.5 Arbitration. If an Indemnified Party and an Indemnifying
Party cannot reach agreement with respect to the validity or amount of any
Third Party Claim or a Claim within 60 days after notice thereof is first
given, the validity and amount thereof, as the case may be, shall be finally
settled by arbitration in Chicago, Illinois in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (or any organization
successor thereto) then in effect (to the extent such rules do not conflict
with the terms hereof), by a panel consisting of three arbitrators, each being
qualified to make evaluations of the kind under dispute. Each of the two
parties to such arbitration shall appoint one arbitrator and the two
arbitrators so appointed shall select the third neutral arbitrator within 30
days after their appointment. If the arbitrators appointed by the parties are
unable or fail to agree upon the third arbitrator, the third arbitrator shall
be selected by the American Arbitration Association. Each arbitrator shall be
unaffiliated with each of the parties hereto. The parties hereto agree to be
bound by whatever procedural and evidentiary rules are established by the panel
of arbitrators. The arbitrators shall render their written decision and award,
upon the concurrence of at least two of their members, within 90 days of the
appointment of the third arbitrator. The decision of the arbitrators shall be
binding on the parties, final and nonappealable. Any arbitration award may be
enforced in any court having jurisdiction over the party against which
enforcement is sought. The party designated by the arbitrators as the
unsuccessful party shall pay the fees and expenses (including attorneys' fees)
incurred in connection with the arbitration by all parties thereto; provided
that if the arbitrators do not designate either party as the unsuccessful
party, Allied shall bear 50% and Xxxxxxx shall bear 50% of such fees and
expenses.
14.6 Payment. Payments of all amounts owing hereunder with respect
to any Third Party Claim shall be made within 30 days after (i) the settlement
of the Third Party Claim, or (ii) if arbitration has been commenced pursuant to
Section 14.5, the final resolution of such arbitration. Payments of all
amounts owing hereunder with respect to any Claim shall be made within ten days
after (i) the expiration of the 60-day Claim notice period without delivery of
a notice of dispute, or (ii) if arbitration has been commenced pursuant to
Section 14.5, the final resolution of such arbitration.
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ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment. This Agreement may be amended by the Parties, by
or pursuant to action taken by their respective Boards of Directors, at any
time before or after approval by Allied's stockholders of the matters specified
in Section 7.5, but after such approval, no amendment shall be made which
materially increases the amount or materially alters terms of the Allied
Securities without the further approval of Allied's stockholders. This
Agreement may be amended only by a written instrument executed by all of the
Parties.
15.2 Waiver. At any time on or before the Closing Date, each of
the Parties may (i) extend the time for the performance of any of the
obligations or other act of any of the other Party or Parties, (ii) waive any
inaccuracies in the representations and warranties made in this Agreement or in
a Disclosure Schedule of a Party, (iii) waive compliance with any of the
agreements or conditions of this Agreement which may be legally waived, and
(iv) grant consents under this Agreement. Any such extension, waiver or grant
shall be valid only if evidenced by a written instrument executed by the Party
giving it.
15.3 Termination. This Agreement may be terminated at any time
before the Closing by:
(i) the mutual consent of the Boards of Directors of
Xxxxxxx and Allied;
(ii) by either Allied or Xxxxxxx if the Acquisitions have
not been consummated on or before the later to occur of December 31,
1996 or the 61st day after the SEC has approved the Allied Proxy
Statement (or any later date which may be agreed to by the mutual
written consent of Allied and Xxxxxxx); provided, however, that such
right to terminate this Agreement shall not be available to any Party
that has breached in any material respect its obligations under this
Agreement in any manner that has proximately contributed to the
failure of the Acquisitions to occur on or before such date; or
(iii) by either the Xxxxxxx Parties or the Allied Parties
if the stockholders of Allied shall have failed to approve at the
Allied Stockholders' Meeting the matters specified in Section 7.5.
15.4 Substitute Financing. Between the date hereof and the
Closing, the Allied Parties shall, from time to time, advise Xxxxxxx as to the
status of the private placement
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or public offering of the Senior Subordinated Debentures. In the event the
Allied Parties determine that all conditions contained in Articles VIII and IX
to the Allied Parties obligation to consummate the Acquisitions and to take the
other actions called for under Articles II and III can be satisfied at the
Closing except that some or all of the Senior Subordinated Debentures cannot be
sold on terms acceptable to Allied, the Allied Parties shall give notice to
Xxxxxxx thereof (the "High Yield Event Notice"). The High Yield Event Notice
shall specify the amount of such Senior Subordinated Debentures (the "Remainder
Senior Subordinated Debentures") which cannot be sold to third party purchasers
on terms acceptable to Allied. If the aggregate principal amount of the
Remainder Senior Subordinated Debentures is $150,000,000 or less, on or before
noon on the first Business Day following Xxxxxxx'x receipt of the High Yield
Event Notice, Xxxxxxx may give notice (the "Substitute Financing Notice") to
the Allied Parties of Xxxxxxx'x election and agreement (the "Substitute
Financing Election") to purchase the Remainder Senior Subordinated Debentures
on the same price and terms as are applicable to purchases of Senior
Subordinated Debentures by third party purchasers (net of the discount
otherwise payable to Xxxxxxx, Sachs & Co.) (the price payable pursuant to
clauses (i) or (ii) above) the "Substitute Financing Purchase Price"). Upon
giving the Substitute Financing Notice, Xxxxxxx will be obligated to purchase
the Remainder Senior Subordinated Debentures on the Closing Date for the
Substitute Financing Purchase Price, and upon Xxxxxxx'x payment of the
Substitute Financing Purchase Price at the Closing, the condition contained in
Section 9.9 to the effect that the Allied Parties shall have received the
proceeds of the financing contemplated by the Highly Confident Letter will be
deemed satisfied to the extent of the funding provided by Xxxxxxx. Any Senior
Subordinated Debentures purchased by Xxxxxxx may not be sold, transferred or
assigned to any Person for a period of 180 days after the purchase, unless
waived by Xxxxxxx, Xxxxx & Co. Upon the giving of the High Yield Event Notice,
the Allied Parties will be obligated to pay $10,000,000 to Xxxxxxx on the
Closing Date or (if the Closing does not occur because the aggregate principal
amount of the Remainder Senior Subordinated Debentures exceeds $150,000,000 or
Xxxxxxx decides not to make the Substitute Financing Election) within ten
Business Days after the date the High Yield Event Notice is given. Such amount
will be payable even if the Acquisitions are consummated on the Closing Date as
a result of Xxxxxxx'x purchase of the Remainder Senior Subordinated Debentures.
15.5 Consequences of Termination. If this Agreement is terminated
as provided in Section 15.3, it shall forthwith become void and, except as
otherwise provided in Sections 5.14 and 15.5, there shall be no liability or
obligation on the part of any Party or their respective officers or directors.
Notwithstanding the foregoing, the Confidentiality Agreement shall also survive
such a termination. Nothing in this Section 15.5 shall, however, relieve any
Party from any liability for any breach of this Agreement.
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If this Agreement is terminated solely because the stockholders of
Allied fail to approve the matters referred to in Section 7.5 hereof, and the
failure to receive such stockholder approval directly results from the
existence of a third party offer to acquire at least 51% of Allied's stock or
assets (whether in the form of a tender offer, merger proposal, asset purchase
or otherwise) then Allied will pay to Xxxxxxx within 10 days of such
termination of this Agreement an amount equal to the product obtained by
multiplying 5,000,000 times the difference between (i) the price per share of
the third party offer (as in effect at the time of such stockholders' meeting)
and (ii) $8.25.
ARTICLE XVI
GENERAL PROVISIONS
16.1 Non-Business Days. If the date on which any action (including
the delivery of notices) to be taken under this Agreement is to occur falls on
a day which is not a Business Day, such action will be deemed timely taken if
taken on the first Business Day following.
16.2 Notices. All notices or other communications which are
required or may be given under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered in person or transmitted by
telecopier (with receipt confirmed) to a Party at the address or telecopy
number, as applicable, set forth below (as any such address or telecopier
number may be changed from time to time by notice similarly given):
(1) if to any Xxxxxxx Party, to:
Xxxxxxx Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(2) if to any Allied Party, to:
Allied Waste Industries, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
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with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
16.3 Entire Agreement. This Agreement, its Exhibits, the
Disclosure Schedules, all documents delivered under this Agreement, the
Confidentiality Agreement and the letter agreement dated the date hereof
relating to the option to purchase the Option Assets of Xxxxxxx granted to
Allied constitute, and together with the Ancillary Agreements upon their
execution and delivery as herein provided will constitute, the entire
agreement, and supersede all of the prior agreements and undertakings, both
written and oral, among the Parties, or any of them, with respect to the
subject matter of this Agreement.
16.4 Assignment; Binding Effect. This Agreement may not be
assigned by any of its Parties. Subject to the preceding sentence, this
Agreement shall be binding upon the Parties and their respective successors and
assigns.
16.5 Counterparts. This Agreement may be executed in counterparts
which together shall constitute a single agreement.
16.6 Governing Law; Jurisdiction. This Agreement and the rights
and obligations of the parties created hereby shall be governed by the internal
Laws of the State of Delaware without regard to its conflict of law rules. The
Parties irrevocably consent to the non-exclusive jurisdiction of the courts of
the State of Delaware in connection with any dispute between or among them
arising under this Agreement or any Ancillary Agreement.
16.7 Severability of Provisions. If a provision of this Agreement
or its application to any Person or circumstance, is held invalid or
unenforceable in any jurisdiction, to the extent permitted by law, such
provision or the application of such provision to Persons or circumstances
other than those as to which it is held invalid or unenforceable and in other
jurisdictions, and the remaining provisions of this Agreement, shall not be
affected.
16.8 Specific Performance. Each Party agrees that one or more
other Parties would be irreparably damaged if any provision of this Agreement
were not performed in accordance with its specific terms or was otherwise
breached. Therefore, the Parties agrees that each Party shall be entitled to
an injunction or injunctions to prevent breaches of this Agreement or any of
its provisions and to specifically enforce this
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Agreement its terms and provisions in any action instituted in any court of the
United States or Canada or any state or province thereof having subject matter
jurisdiction, in addition to any other remedy to which a Party may be entitled,
at law or in equity.
16.9 Joint Drafting. This Agreement and its Exhibits have been
jointly drafted by the Parties and their counsel. Neither this Agreement nor
any of its Exhibits shall be construed against any Party based on its
authorship.
16.10 Captions. The article and section headings in this Agreement
are for convenience only, and shall not affect the meaning or interpretation of
this Agreement.
16.11 No Third-Party Beneficiaries. There are no third-party
beneficiaries of this Agreement, except that the respective Affiliates of the
Parties are entitled to the benefits of the respective indemnification
obligations of the Parties under Section 11.10 and Article XIV.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement, all
as of the date first written above.
XXXXXXX INC.
By: /s/ XXXX X. XXXXXX
------------------------------------
Title: Senior Vice President
---------------------------------
XXXXXXX TRANSPORTATION, INC.
By: XXXX X. XXXXXX
------------------------------------
Title: Senior Vice President
---------------------------------
XXXXXXX WASTE SYSTEMS, INC.
By: XXXX X. XXXXXX
------------------------------------
Title: Authorized Officer
---------------------------------
XXXXXXX WASTE SYSTEMS (CANADA) LTD.
By: XXXX X. XXXXXX
------------------------------------
Title: Authorized Officer
---------------------------------
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XXXXXXX MEDICAL SERVICES LTD.
By: XXXX X. XXXXXX
------------------------------------
Title: Authorized Officer
---------------------------------
ALLIED WASTE INDUSTRIES, INC.
By: /s/ XXXXX X. XXXXXX
------------------------------------
Title: Chairman
---------------------------------
ALLIED HOLDINGS (UNITED STATES), INC.
By: /s/ XXXXX X. XXXXXX
------------------------------------
Title: President
---------------------------------
3294862 (CANADA), INC.
By: /s/ XXXXX X. XXXXXX
------------------------------------
Title: President
---------------------------------
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EXHIBIT A-1
THIS DEBENTURE HAS NOT BEEN REGISTERED (OR QUALIFIED BY PROSPECTUS) UNDER THE
SECURITIES ACT (DEFINED BELOW), THE CANADIAN SECURITIES LEGISLATION (DEFINED
BELOW), OR THE LAWS OF ANY STATE OF THE UNITED STATES OF AMERICA, AND THIS
DEBENTURE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS HEREOF AND THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT, THE
CANADIAN SECURITIES LEGISLATION AND SUCH STATE LAWS OTHER THAN PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS AND UPON
DELIVERY TO ALLIED CANADA OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
ALLIED CANADA TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION AND
THE PROSPECTUS DELIVERY REQUIREMENTS UNDER THOSE LAWS.
THIS DEBENTURE WILL BE ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID"). THE HOLDER
OF THIS DEBENTURE SHOULD BE AWARE THAT SUCH HOLDER WILL BE REQUIRED TO INCLUDE
OID IN SUCH HOLDER'S GROSS INCOME FOR INCOME TAX PURPOSES IN ADVANCE OF THE
RECEIPT OF CASH ATTRIBUTABLE TO SUCH INCOME. WITH RESPECT TO OID, THE ISSUE
DATE OF THIS DEBENTURE IS _________________, 199_, THE ISSUE PRICE IS
[$_________], THE AMOUNT OF OID IS [$_________], AND THE YIELD TO MATURITY IS
[______]%.
7% JUNIOR SUBORDINATED DEBENTURE DUE 200_(1)
$150,000,000 _________________, 199_
FOR VALUE RECEIVED, 3294862 CANADA INC., a Canadian corporation ("Allied
Canada"), promises to pay to Xxxxxxx Inc., a Canadian corporation ("Xxxxxxx"),
or its registered assigns, the principal amount of $150,000,000 on the
Maturity Date, with interest on the principal balance outstanding from time to
time at the rate and payable at the times and in the manner hereinafter set
forth.
-------------------------
(1) The due date will be 12 years after the date of issuance.
93
1. Definitions.
(a) For all purposes of this Debenture:
"Affiliate" means, with respect to any Person, another Person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such Person
with the term "control," including the terms "controlling" and
"controlled," meaning for purposes of this definition, the power to
direct the management and policies of a Person, directly or indirectly,
whether through the ownership of voting securities or partnership or
other ownership interests, or by contract or otherwise.
"Allied" means Allied Waste Industries, Inc., a Delaware
corporation, and its successors and assigns.
"Allied Canada" means 3294862 Canada Inc., a Canadian
corporation, and its successors and assigns.
"Allied Common Stock" means the Common Stock, $.01 par value per
share, of Allied.
"Allied U.S." means Allied Holdings (United States), Inc., a
Delaware corporation, and its successors and assigns.
"Allied Warrant" means the warrant for the purchase of shares of
Allied Common Stock to be issued by Allied to Xxxxxxx under Section 2.3
of the Stock Purchase Agreement.
"Bankruptcy or Insolvency Proceeding" is defined in Subsection
5(b) of this Debenture.
"Blockage Period" means any period when a default or an event of
default or an event which, with the giving of notice or the lapse of
time or both, would constitute a default or an event of default has
occurred and is continuing under the terms of the Credit Facility or the
Senior Subordinated Debentures or under the terms of any agreement or
instrument pursuant to which any other Designated Senior Indebtedness is
created, issued, evidenced, secured or guaranteed.
"Business Day" means a day other than Saturday, Sunday or any day
on which banks located in Toronto, Ontario or New York, New York are
authorized or obligated to close.
"Canadian Securities Legislation" means the Securities Act of the
Province of Ontario (R.S.O. 1990, c. S.5, as amended) and similar
provincial legislation, and the regulations and rules promulgated
thereunder.
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"Change of Control" means a change resulting when any Unrelated
Person or any Unrelated Persons acting together that would constitute a
Group together with any Affiliates thereof (in each case also
constituting Unrelated Persons) shall at any time Beneficially Own more
than 50% of the aggregate voting power of all classes of Voting Stock of
Allied; provided, however, that if at the date any "Change of Control"
would otherwise have occurred but for the fact that a Person was not an
Unrelated Person because such Person or an Affiliate of such Person
acquired shares of Allied Common Stock or all or any portion of the
Allied Warrant from Xxxxxxx or from any Affiliate of Xxxxxxx within nine
months prior to such date, such shares of Allied Common Stock acquired
from Xxxxxxx or any Affiliate of Xxxxxxx, or any shares of Allied Common
Stock issued upon exercise of the Allied Warrant or any portion thereof,
shall at all times thereafter be excluded when calculating whether a
Change of Control has occurred. As used in this definition of Change of
Control (a) "Beneficially Own" means "beneficially own" as defined in
Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor provisions thereto; provided, however,
that, for purposes of this definition, a Person shall not be deemed to
Beneficially Own securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates until such tendered securities are accepted for purchase or
exchange; (b) "Group" means a "group" for purposes of Section 13(d) of
the Exchange Act; (c) "Affiliate" means, with respect to any Person,
another Person which would be an "affiliate" of such Person for purposes
of Section 13(d) of the Exchange Act; (d) "Unrelated Person" means at
any time any Person other than Xxxxxxx, any Person to whom Xxxxxxx or
any of its Affiliates transfers, within nine months prior to such time,
any shares of Allied Common Stock or all or any portion of the Allied
Warrant or any Affiliate of Xxxxxxx or any such Person; provided,
however, that Persons (other than Xxxxxxx or its Affiliates) to whom
Xxxxxxx or any of its Affiliates transfers any shares of Allied Common
Stock or all or any portion of the Allied Warrant after five years from
the date hereof shall not be deemed Unrelated Persons; and (e) "Voting
Stock" of any Person shall mean capital stock of such Person which
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.
"Credit Facility" means the Credit Agreement dated as of
_____________, 199_, among Allied U.S., as borrower, Allied, Xxxxxxx
Sachs Credit Partners L.P., as syndication agent, Citibank, N.A., as
documentation agent, Credit Suisse, as administrative agent, Xxxxxxx
Sachs Credit Partners L.P., Citicorp USA, Inc. and Credit Suisse, as
initial lenders, and the other financial institutions now or hereafter
parties thereto (as the same may be renewed, amended, modified,
increased, extended, refinanced, or otherwise supplemented from time to
time).
"Debenture" means this 7% Junior Subordinated Debenture due
200__.
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95
"Default" is defined in Section 8.
"Default Rate" means an annual interest rate equal to 9% per
annum.
"Deferral Period" is defined in Subsection 3(b).
"Designated Senior Indebtedness" means (i) the Senior
Indebtedness incurred with respect to the Credit Facility, (ii) the
Senior Indebtedness evidenced by the Senior Subordinated Debentures and
(iii) any other Senior Indebtedness which is incurred pursuant to an
agreement (or series of related agreements simultaneously entered into)
providing for Indebtedness, or commitments to lend, of at least
$10,000,000 at the time of determination and is specifically designated
in the instrument evidencing such Senior Indebtedness or the agreement
under which such Senior Indebtedness arises as "Designated Senior
Indebtedness."
"$" means U.S. dollars, the lawful currency of the United States
of America.
"Financing Lease" means any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with generally accepted accounting principles to be
capitalized on a balance sheet of the lessee.
"Governmental Entity" means any U.S. or Canadian, territorial,
federal, state, provincial or local court, executive office,
legislature, governmental agency, department, ministry, commission, or
administrative, regulatory or self-regulatory authority or
instrumentality.
"Guarantee" means with respect to any Person any obligation,
contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of such Person, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment
of ) such Indebtedness or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Indebtedness, (b)
to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness of the payment of such
Indebtedness or (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; provided,
however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business.
"Indebtedness" means with respect to any Person at any date, (a)
all indebtedness of such Person for borrowed money or for the deferred
purchase
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96
price of property or services (other than current trade liabilities
incurred in the ordinary course of business and payable in accordance
with customary practices), (b) any other indebtedness of such Person
which is evidenced by a note, bond, debenture, letter of credit or
similar instrument, (c) all obligations of such Persons with respect to
Guarantees, (d) all obligations of such Person under Financing Leases,
(e) all obligations of such Person in respect of acceptances issued or
created for the account of such Person (other than endorsements in the
ordinary course of business), (f) all obligations in respect of
interest rate swaps or other interest rate hedging products or foreign
currency exchange agreements or exchange rate hedging arrangements, (g)
all obligations in respect of reimbursement obligations under letters of
credit, and (h) all liabilities of the type referred to in clauses (a)
through (g) above that are secured by any lien, charge, security
interest or encumbrance on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment
thereof.
"Indenture" means the Indenture dated _____________, 199_,
between Allied U.S. and the Trustee pursuant to which the Senior
Subordinated Debentures are issued.
"Xxxxxxx" means Xxxxxxx Inc., a Canadian corporation.
"LTI" means Xxxxxxx Transportation, Inc., a Delaware corporation.
"Maturity Date" means _______________ ___, 200_ [12 years after
the date hereof].
"Offset Letter Agreement" means the letter agreement dated the
Closing Date among Allied, 3294854 Canada Inc., Xxxxxxx and LTI, in
substantially the form of Exhibit N attached to this Agreement, to be
executed and delivered pursuant to Section 3.3.
"Person" means an individual, corporation, partnership,
association, joint stock company, limited liability company,
Governmental Entity, business trust, unincorporated organization, or
other legal entity.
"Representative" means at any date, with respect to the Credit
Facility, the Person or Persons then acting as the administrative agent
under the Credit Facility, with respect to the Senior Subordinated
Debentures, the Trustee, and with respect to any other Designated Senior
Indebtedness, the holders of such Designated Senior Indebtedness or any
Person acting as agent of such holders at such date.
"Section 4(b) Prepayment Date" is defined in Subsection 4(b) of
this Debenture.
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97
"Section 4(b) Prepayment Fraction" means, with respect to any
prepayment pursuant to Section 4(b) of this Debenture, the fraction
obtained by dividing the principal amount of the Debenture to be prepaid
by $150 million.
"Section 4(b) Prepayment Notice" is defined in Subsection 4(b) of
this Debenture.
"Section 4(b) Prepayment Option" is defined in Subsection 4(b) of
this Debenture.
"Section 4(b) Prepayment Price" means (i) at any date set forth in
the table below (the "Section 4(b) Value Date"), the amount set forth
opposite such Section 4(b) Value Date, and (ii) at any other date (the
"Section 4(b) Determination Date"), the amount equal to the sum of (y)
the Section 4(b) Prepayment Price as of the Section 4(b) Value Date
immediately preceding such Section 4(b) Determination Date plus (z) an
amount equal to the product of (A) the difference between the Section
4(b) Prepayment Price as of the Section 4(b) Value Date immediately
following such Section 4(b) Determination Date minus the Section 4(b)
Prepayment Price as of the Section 4(b) Value Date immediately preceding
such Section 4(b) Determination Date multiplied by (B) a fraction, the
numerator of which is the number of days elapsed from (and including)
such preceding Section 4(b) Value Date to (but excluding) such Section
4(b) Determination Date and the denominator of which is the number of
days from (and including) such preceding Section 4(b) Value Date to (but
excluding) the immediately following Section 4(b) Value Date.
Section 4(b) Section 4(b)
Value Date (2) Prepayment Price
---------- ----------------
___________, ____ $126,700,000
___________, ____ $130,400,000
___________, ____ $134,600,000
___________, ____ $139,400,000
___________, ____ $144,700,000
___________, ____ $150,000,000
___________, ____ $150,000,000
___________, ____ $150,000,000
---------------------------
(2) The initial Section 4(b) Value Date shall be the date five years after
the date of the Debenture, and succeeding Section 4(b) Value Dates shall
occur annually thereafter until the Maturity Date.
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98
"Section 9 Prepayment Date" is defined in Section 9(b) of this
Debenture.
"Section 9 Purchase Price" means (i) at any time prior to five
years from the date hereof, $126,700,000, (ii) at any date set forth in
the table below (the "Section 9 Value Date"), the amount set forth
opposite such Section 9 Value Date, and (iii) at any other date (the
"Section 9 Determination Date"), the amount equal to the sum of (y) the
Section 9 Purchase Price as of the Section 9 Value Date immediately
preceding such Section 9 Determination Date plus (z) an amount equal to
the product of (A) the difference between the Section 9 Purchase Price
as of the Section 9 Value Date immediately following such Section 9
Determination Date minus the Section 9 Purchase Price as of the Section
9 Value Date immediately preceding such Section 9 Determination Date
multiplied by (B) a fraction, the numerator of which is the number of
days elapsed from (and including) such preceding Section 9 Value Date to
(but excluding) such Section 9 Determination Date and the denominator of
which is the number of days from (and including) such preceding Section
9 Value Date to (but excluding) the immediately following Section 9
Value Date.
Section 9 Section 9
Value Date (3) Prepayment Price
---------- ----------------
___________, ____ $126,700,000
___________, ____ $130,400,000
___________, ____ $134,600,000
___________, ____ $139,400,000
___________, ____ $144,700,000
___________, ____ $150,000,000
___________, ____ $150,000,000
___________, ____ $150,000,000
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means principal of, and premium, if any,
and interest on (including interest that, but for the filing of a
petition initiating any Bankruptcy or Insolvency Proceeding, would
accrue on such obligations at the rate provided in the agreements or
instruments creating or evidencing the respective obligations, whether
or not such claim is allowed or allowable in such Bankruptcy or
Insolvency Proceeding) and all other amounts of every kind or
----------------------------
(3) The initial Section 9 Value Date shall be the date five years after the
date of the Debenture, and succeeding Section 9 Value Dates shall occur
annually thereafter until the Maturity Date.
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99
nature (including, but not limited to, fees, indemnities and expenses)
due on or in connection with any Indebtedness of Allied Canada, whether
outstanding on the date of this Debenture or thereafter created,
incurred, assumed or Guaranteed by Allied Canada (including all
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing) unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant
to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to this Debenture.
Without limiting the generality of the foregoing, "Senior Indebtedness"
shall include (a) all obligations and liabilities of every kind and
nature (including, but not limited to, fees, expenses and indemnities)
under the Credit Facility, the Senior Subordinated Debentures or the
Indenture, (b) all obligations and liabilities of every kind and nature
(including, but not limited to, fees, expenses and indemnities) in
respect of any interest rate swaps or other interest rate hedging
product entered into in connection with Indebtedness incurred or to be
incurred pursuant to the Credit Facility, and (c) any renewal,
extension, refinancing or rearrangement of any Indebtedness incurred or
to be incurred pursuant to the Credit Facility, the Senior Subordinated
Debentures or the Indenture. Notwithstanding the foregoing, Senior
Indebtedness shall not include (i) amounts owed (except to banks,
insurance companies and other financing institutions and except for
obligations under Financing Leases) for goods, materials, services or
operating lease rental payments in the ordinary course of business or
for compensation to employees of Allied Canada, (ii) any liability for
federal, state, provincial, local or other taxes owed or owing by Allied
Canada and (iii) Indebtedness with respect to Allied Canada's Zero
Coupon Junior Subordinated Debenture due 200_ dated the date hereof.
"Senior Subordinated Debentures" means the ___% Senior
Subordinated Debentures due 200__(4) in the aggregate original principal
amount of at least $475,000,000 issued by Allied U.S. pursuant to the
Indenture.
"Stock Purchase Agreement" means the Stock Purchase Agreement
dated as of September 17, 1996, among Allied, Allied Canada, Xxxxxxx and
certain other parties named therein.
"Subordinated Obligations" is defined in Subsection 5(a).
"Subsidiary" of a Person means an Affiliate of that Person more
than 50% of the aggregate voting power (or of any other form of voting
equity interest in the case of a Person that is not a corporation) of
which is beneficially owned by that Person directly or indirectly
through one or more other Subsidiaries.
--------------------------
(4) The due date of the Senior Subordinated Debentures will be 10 years
after the date of issuance.
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100
"Trustee" means ________________________________, a national
banking association, in its capacity as trustee under the Indenture, and
its successors in such capacity.
(b) Capitalized terms defined in this Debenture are equally
applicable to both their singular and plural forms. References to a
designated "Section" or "Subsections" refer to a Section or Subsection of this
Debenture, unless otherwise specifically indicated. In this Debenture,
"including" is used only to indicate examples, without limitation to the
indicated examples, and without limiting any generality which precedes it.
2. Interest Rate; Default Rate. From (and including) the date of
this Debenture through (but not including) the earlier of the Maturity Date or
the date the maturity of this Debenture is accelerated pursuant to Section
8(a), interest shall accrue on the unpaid principal balance of this Debenture
at an annual fixed rate equal to 7% per annum. All past due principal and
interest shall accrue interest at the Default Rate from (and including) the day
after the date such principal or interest is payable hereunder through (but not
including) the date of payment. Interest will be calculated on the basis of
the actual number of days elapsed over a year composed of 365 days (or 366
days, as the case may be).
3. Payment Terms. Subject to Section 5:
(a) The outstanding principal balance of this Debenture and
all accrued and unpaid interest thereon shall be due and payable on the
Maturity Date.
(b) During the period beginning on the date hereof and ending
three years thereafter (the "Deferral Period"), interest on the
outstanding principal balance of this Debenture will accrue but will be
deferred. During the Deferral Period, interest will be compounded
semi-annually. After the Deferral Period, at the election of Allied
Canada, the deferred interest may be paid at any time, and (i) the
aggregate unpaid amount, if any, of interest deferred during the
Deferral Period, together with interest thereon at the rate of 7% per
annum, will be payable in eighteen equal (or as nearly equal as
possible) installments on the ___ day of each _______ and _______ of
each year (beginning __________, __), and on the Maturity Date and (ii)
interest on the outstanding principal balance of this Debenture will be
due and payable in arrears on the _____ day of each ___________ and
_____________ of each year (beginning ___________, ____), and on the
Maturity Date for the period commencing on (and including) the later of
the date following the last day of the Deferral Period
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101
or the date to which interest hereon has been paid, as the case may be,
and ending on (but excluding) the date of payment. (5)
(c) Each payment or prepayment hereunder shall be made in cash
by wire transfer to an account located in Canada designated by Xxxxxxx.
(d) Any payment or action that is due hereunder on a day which
is not a Business Day shall be deferred until the next succeeding
Business Day (but interest shall continue to accrue on any applicable
payment until such payment is made).
4. Optional Redemption.
(a) Except to the extent provided in Section 9, this Debenture
may not be redeemed or prepaid, in whole or in part, on or before the
date which is five years after the date hereof.
(b) Thereafter, except as otherwise provided in Section 5,
Allied Canada shall have the right and option (the "Section 4(b)
Prepayment Option") to redeem and prepay this Debenture, in whole or in
part, at a discount, on the terms and subject to the conditions of this
Section 4(b). Allied Canada may exercise the Section 4(b) Prepayment
Option at any time by giving the holder of this Debenture written notice
(the "Section 4(b) Prepayment Notice") of its election to exercise the
Section 4(b) Prepayment Option and by specifying in the Section 4(b)
Prepayment Notice the date on which Allied Canada will prepay this
Debenture pursuant to this Section 4(b) (the "Section 4(b) Prepayment
Date") and the principal amount of this Debenture to be prepaid. The
Section 4(b) Prepayment Date shall be at least 10 Business Days, and not
more than 20 Business Days, after the date of the Section 4(b)
Prepayment Notice. Upon the Section 4(b) Prepayment Date, Allied Canada
shall prepay this Debenture to the extent specified in the Section 4(b)
Prepayment Notice, by payment of an amount equal to the product obtained
by multiplying the Section 4(b) Prepayment Price as of the Section 4(b)
Prepayment Date times the Section 4(b) Prepayment Fraction.
5. Subordination.
(a) The indebtedness evidenced by, and all obligations in
respect of, this Debenture (including the obligations under Section 9)
and the payment of principal of, premium and interest, if any, on and
all other obligations in respect of, this Debenture (collectively, the
"Subordinated Obligations") are expressly subordinate to all Senior
Indebtedness to the extent and in the manner set forth
------------------------------
(5) Installments of interest will be payable on a semi-annual basis
commencing six months after the last day of the Deferral Period.
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102
herein. For purposes hereof, the term "subordinate" means that, unless
and until the Senior Indebtedness has been indefeasibly paid in full in
cash, Xxxxxxx will not have the right under any circumstances to, and
will not, take, demand, commence any suit or any other proceeding for
collection, pursue any other judicial or non-judicial remedy or receive
from Allied Canada or any of its Subsidiaries or Affiliates, and Allied
Canada will not and will not permit any of its Subsidiaries or
Affiliates to, make, give, or permit, directly or indirectly, by set-
off, redemption, purchase or in any other manner, any payment of or on
account of the Subordinated Obligations; provided, however, that at any
time, except during a Blockage Period, Allied Canada shall make, and
Xxxxxxx may receive, and Xxxxxxx may commence any suit or other
proceeding for collection of, scheduled payments of principal or
interest on this Debenture in accordance with the terms hereof and,
provided, further, that at any time, except during a Blockage Period,
Allied Canada may prepay this Debenture so long as such prepayment would
not cause the occurrence of a Blockage Period. Upon the termination of
any Blockage Period, the right of Xxxxxxx to receive payments (including
payments not made during the Blockage Period) shall be reinstated, and
Allied Canada shall resume making such payments to Xxxxxxx in accordance
with the terms hereof. In no event shall Allied Canada be obligated to
make, and Allied Canada shall not make, and shall not permit any of its
Subsidiaries or Affiliates to make, directly or indirectly, by set-off,
redemption, purchase or in any other manner, any payments or prepayments
of, or on account of, any of the Subordinated Obligations during any
Blockage Period or if such payment or prepayment would cause the
occurrence of a Blockage Period.
(b) Upon any payment or distribution of any kind or character
to creditors of Allied Canada (whether in cash, property or securities)
in (x) a total or partial liquidation, winding up or dissolution of
Allied Canada (whether voluntarily or involuntarily) or (y) in a
bankruptcy, reorganization, insolvency, receivership or similar
proceeding (including a proceeding under the Canadian Companies'
Creditors Arrangement Act) relating to Allied Canada or its property, or
in an assignment for the benefit of creditors or any marshaling of
Allied Canada's assets and liabilities (any of the foregoing in clauses
(x) and (y) being referred to herein as a "Bankruptcy or Insolvency
Proceeding"), the holders of Senior Indebtedness will be entitled to
receive payment in full in cash of all the principal of and interest on
and other amounts payable in respect of such Senior Indebtedness
(including interest accruing after the commencement of any such
proceeding at the rate specified in the agreements or instruments
creating or evidencing the applicable Senior Indebtedness and whether
or not such interest is an allowed or allowable claim under applicable
law) before Xxxxxxx will be entitled to receive any payment with respect
to this Debenture (whether in cash, property or securities); and until
all obligations with respect to Senior Indebtedness are indefeasibly
paid in full in cash, any distribution received by Xxxxxxx or to which
Xxxxxxx would be entitled shall be paid over or made to the holders of
Senior Indebtedness. Upon the occurrence of any Bankruptcy or
Insolvency Proceeding relating to Allied Canada, the holders of
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the Senior Indebtedness are authorized and empowered to (i) demand, xxx
for, collect and receive every payment or distribution on account of the
Subordinated Obligations payable or deliverable in connection with such
event or proceeding and give acquittance therefor, and (ii) file claims
and proofs of claim in any statutory or non- statutory proceeding and
take such other actions as may be necessary or desirable for the
enforcement of the subordination provisions of this Debenture. Promptly
after taking any action provided in clauses (i) or (ii) above, Allied
Canada shall give written notice thereof to the holder of this
Debenture; provided, however, that failure to give such notice shall in
no event affect the validity of any action so taken.
(c) In the event that, notwithstanding the occurrence of any
of the events described in Subsections 5(a) and (b), any such payment or
distribution of assets of Allied Canada of any kind or character,
whether in cash, property or securities, shall be received by the holder
of this Debenture which is not permitted hereby such payment or
distribution shall be held in trust for the ratable benefit of, and
shall be paid over or delivered to, the holders of the Senior
Indebtedness.
(d) The holders of the Senior Indebtedness shall have no duty
or obligation to the holder of this Debenture in any manner whatsoever
and may, at any time and from time to time, in their sole discretion,
without the consent of or notice to the holder of this Debenture and
without impairing or releasing any rights of the holders of the Senior
Indebtedness or any of the obligations of the holder of this Debenture
hereunder, take any or all of the following actions:
(i) change the amount, manner, place, terms of payment
or interest rate, change or extend the time of payment of, or
renew or alter, any of the Senior Indebtedness, or amend or
supplement or waive any of the terms of any instrument or
agreement now or hereafter executed pursuant to which any of the
Senior Indebtedness is issued or incurred;
(ii) sell, exchange, release, surrender, relend, realize
upon or otherwise deal with in any manner and in any order, any
property (or the income, revenues, profits or proceeds therefrom)
by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, any Senior Indebtedness;
(iii) release any person liable in any manner for the
payment or collection of the Senior Indebtedness;
(iv) exercise or refrain from exercising any rights and
remedies against Allied Canada or others, or otherwise act or
refrain from acting or, for any reason, fail to file, record or
otherwise perfect any security interest in or lien on any
property of Allied Canada or any other Person; and
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(v) apply any sums received by the holders of the
Senior Indebtedness, by whomsoever paid and however realized, to
payment of the Senior Indebtedness in such manner as the holders
of the Senior Indebtedness, in their sole discretion, may deem
appropriate.
(e) Xxxxxxx and any future holder of this Debenture, by
acceptance of this Debenture, agree to provide to any holder of Senior
Indebtedness, at any time and from time to time, upon the written
request of Allied Canada or such holder of Senior Indebtedness an
agreement signed by Xxxxxxx or such future holder of this Debenture
addressed to the holder of such Senior Indebtedness in substantially the
form of, and on substantially the terms set out in, Exhibit A attached
hereto to the effect that such holder is a holder of Senior
Indebtedness, that the holder or holders of such Senior Indebtedness are
entitled to the benefits of Sections 5, 6 and 13 of this Debenture and
that the holder or holders of such Senior Indebtedness may enforce the
terms and provisions thereof to the same extent Allied Canada would be
able to do so, provided, however, that prior to furnishing such
agreement, Xxxxxxx has received from Allied Canada or such holder such
information as Xxxxxxx may reasonably request demonstrating to Xxxxxxx'x
reasonable satisfaction that such holder is a holder of Senior
Indebtedness. Xxxxxxx, and each subsequent holder of this Debenture, by
acceptance of this Debenture, irrevocably appoint Allied Canada (with
full power of substitution) as its agent and attorney in fact (which
appointment is coupled with an interest and shall be irrevocable so long
as any Senior Indebtedness is outstanding) to execute and deliver on
behalf and in the name of Xxxxxxx or such holder, as the case may be, an
agreement in substantially the form of, and on substantially the terms
set out in, Exhibit A hereto in favor of each such holder of Senior
Indebtedness and to take such further action as may be necessary or
appropriate to effectuate the subordination as provided herein.
Promptly after exercise of any such power, Allied Canada will give
written notice thereof to the holder of the Debenture; provided,
however, that failure to give such notice shall in no event affect the
validity of any power so exercised.
(f) If a Default shall have occurred and be continuing (other
than a Default pursuant to Subsection 7(b) or (c)) and the holder of
this Debenture elects to accelerate this Debenture pursuant to Section
8, Xxxxxxx shall give the Representative under the Credit Facility 30
days' prior written notice before accelerating this Debenture, which
notice shall state that it is a "Notice of Intent to Accelerate";
provided, however, that Xxxxxxx shall not be required to give such
notice if at such time payment of any Indebtedness incurred pursuant to
the Credit Facility shall have been accelerated. If payment of this
Debenture is accelerated because of a Default, the holder shall promptly
notify the Representatives under the Designated Senior Indebtedness and
the holders of all other Senior Indebtedness of the acceleration.
(g) Until all Senior Indebtedness has been indefeasibly paid
in full in cash, the holders of this Debenture shall not be entitled to
assert, enforce or
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105
otherwise exercise any right of subrogation against Allied Canada or any
other Person obligated on the Subordinated Obligations. After all
Senior Indebtedness has been indefeasibly paid in full in cash, and
until the Subordinated Obligations have been so paid in full, the holder
of this Debenture shall be subrogated to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness.
A distribution made under this Section 5 to holders of Senior
Indebtedness which otherwise would have been made to the holder of this
Debenture is not, as between Allied Canada and the holder of this
Debenture, a payment by Allied Canada on Senior Indebtedness.
(h) This Section 5 defines the relative rights of the holder
of this Debenture and holders of Senior Indebtedness. Nothing in this
Debenture shall:
(i) impair, as between Allied Canada and such holder,
the obligation of Allied Canada, which is absolute and
unconditional, to pay principal of and, premium and interest, if
any, on this Debenture in accordance with its terms; or
(ii) except as otherwise set forth in this Section 5,
prevent the holder of this Debenture from exercising its
available remedies upon a Default, subject to the rights of
holders of Senior Indebtedness to receive distributions otherwise
payable to such holder.
6. No Impairment. Section 5, this Section 6, the proviso to
Subsection 8(a), and Section 13 (and all defined terms used in such sections)
shall constitute a continuing offer to all Persons who become holders of, or
continue to hold, Senior Indebtedness, and such provisions are made for the
benefit of the holders from time to time of Senior Indebtedness, and such
Persons are conclusively presumed to have relied upon such provisions; and such
holders are made obligees hereunder, and they or each of them may enforce such
provisions. No right of any present or future holder of any Senior
Indebtedness to enforce the subordination or other provisions referred to in
this Section 6 shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of Allied Canada or Xxxxxxx, or by any
non-compliance by Allied Canada or Xxxxxxx with the terms, provisions and
covenants of this Debenture, regardless of any knowledge thereof any such
holder may have or otherwise be charged with. Section 5, this Section 6 and
the subordination and other provisions referred to in this Section 6 may not be
amended or modified in any manner which might terminate or impair the
subordination or such other provisions except with the prior written consent of
the Representatives of all the Designated Senior Indebtedness.
7. Events of Default. "Default" means the occurrence of one or more
of the following:
(a) Payment. Allied Canada fails to pay the outstanding
principal amount of this Debenture on the Maturity Date.
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106
(b) Voluntary Bankruptcy. Allied Canada (i) files a petition
initiating a voluntary Bankruptcy or Insolvency Proceeding, (ii) seeks,
consents to, or does not contest the appointment of a receiver or
trustee for itself or for all or any substantial part of its property,
(iii) is voluntarily adjudicated a bankrupt or insolvent, (iv) makes a
general assignment for the benefit of its creditors, or (v) admits in
writing its inability to pay its debts as they mature.
(c) Involuntary Bankruptcy. A petition is filed against
Allied Canada seeking to initiate a Bankruptcy or Insolvency Proceeding
and such petition is not dismissed within 180 days after being filed, or
a court of competent jurisdiction enters an order, judgment or decree
appointing a receiver or trustee for Allied Canada, or for all or
substantially all of its property, and such order, judgment or decree is
not discharged or stayed within 180 days after its entry.
(d) Acceleration of Other Indebtedness. An event of default
occurs and is continuing under the Credit Facility and, as a result
thereof, the Indebtedness outstanding pursuant to the Credit Facility is
accelerated; provided, however, that in the event the holders of such
Indebtedness elect to waive such event of default or to otherwise
de-accelerate such Indebtedness, no Default shall subsist hereunder.
8. Remedies of Xxxxxxx. Upon the occurrence and during the
continuance of a Default, Xxxxxxx shall have the following rights:
(a) Acceleration. Subject to the provisions of Section 5
hereof, Xxxxxxx may, at its option, declare the entire principal balance
of this Debenture, together with the accrued and unpaid interest
thereon, immediately due and payable without notice of Default, notice
of intent to accelerate, notice of acceleration, or any other notice,
presentment, protest, demand or action of any kind or nature whatsoever
(each of which is hereby expressly waived by Allied Canada), whereupon
the entire Indebtedness under this Debenture shall become immediately
due and payable; provided, however, that no such acceleration (except
for an acceleration upon the occurrence of a Default specified in
Subsection 7(d)) shall be effective or of any force whatsoever and the
holder of this Debenture may not take any action against Allied Canada
with respect to a Default hereunder if made during a Blockage Period, or
if such acceleration would result in a Blockage Period; provided,
further, that in the event the Indebtedness under this Debenture is
accelerated upon the occurrence of a Default specified in Subsection
7(d) and the holders of the Indebtedness outstanding pursuant to the
Credit Facility elect to waive the event of default giving rise to the
acceleration thereunder or otherwise elect to de-accelerate such
Indebtedness, Xxxxxxx shall de-accelerate the obligations hereunder.
(b) Other Rights. Except as otherwise modified hereby,
Xxxxxxx shall have all rights and remedies available at law or equity
and the same (i) shall be cumulative and concurrent, (ii) may be pursued
separately, successively, or
15
107
concurrently against Allied Canada, (iii) may be exercised as often as
occasion therefor shall arise, it being agreed by Allied Canada that the
exercise or failure to exercise any of the same shall in no event be
construed as a waiver or release thereof or of any other right or
remedy, and (iv) are intended to be, and shall be, nonexclusive.
9. Offer of Prepayment upon Change of Control.
(a) Allied Canada will, within thirty business days after any
executive officer of Allied Canada has knowledge of the occurrence of a
Change of Control, give written notice of such Change of Control to the
holder of this Debenture. Subject to the provisions of Section 5, such
notice shall contain and constitute an offer to prepay this Debenture as
described in Subsection 9(b).
(b) The offer to prepay this Debenture contemplated by
Subsection 9(a) shall be an offer to prepay, in accordance with and
subject to this Section 9, all, but not less than all, of this Debenture
at the Section 9 Purchase Price, together with all interest accrued and
unpaid hereon, on a date specified in such offer (the "Section 9
Prepayment Date") which date shall be not less than 45 days and not more
than 60 days after the date of such offer (if the Section 9 Prepayment
Date shall not be specified in such offer, the Section 9 Prepayment Date
shall be the first business day after the 45th day after the date of
such offer).
(c) The holder of this Debenture may accept the offer to
prepay made pursuant to this Section 9 in whole but not in part by
causing a notice of such acceptance to be delivered to Allied Canada
within ten business days after receipt of the written notice to be given
pursuant to Subsection 9(a). A failure by a holder of this Debenture to
respond within such time period to an offer to prepay made pursuant to
this Section 9 shall be deemed to constitute a rejection of such offer.
(d) Prepayment of this Debenture pursuant to this Section 9
shall be at the Section 9 Purchase Price. The prepayment shall be made
on the Section 9 Prepayment Date.
(e) Notwithstanding any provision hereof to the contrary, in
no event shall Allied Canada prepay (or be obligated to prepay) this
Debenture pursuant to this Section 9 until 91 days after Allied Canada
shall have prepaid the Senior Indebtedness incurred pursuant to the
Credit Facility and the Senior Subordinated Debentures, and all other
Senior Indebtedness which is entitled to be prepaid upon the occurrence
of a Change of Control, unless the holder or holders of such Senior
Indebtedness have waived or otherwise failed to enforce their rights to
receive a prepayment of the Senior Indebtedness held by them to which
they are entitled in connection with such Change of Control.
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108
10. Captions. The captions, headings, and arrangements used in this
Debenture are for convenience only and do not affect or modify the terms of
this Debenture.
11. Notices. All notices or other communications which are required
or may be given under this Debenture shall be in writing and shall be deemed to
have been duly given when delivered in person or transmitted by telecopier
(with receipt confirmed) at the address or telecopy number set forth below (as
any such address or telecopier number may be changed from time to time by
notice similarly given):
(1) if to Xxxxxxx, to:
Xxxxxxx Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(2) if to Allied Canada, to:
3294862 CANADA INC.
c/o Allied Waste Industries, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
12. Applicable Law. This Debenture shall be governed by and
construed in accordance with the laws of the State of Delaware and the laws of
the United States of America applicable therein (without reference to the
conflicts of law principles thereof).
13. Transfer Restriction. This Debenture may not be sold, assigned,
transferred, pledged or hypothecated in any manner, directly or indirectly, by
Xxxxxxx or any other holder, unless the assignee, transferee, pledgee or
hypothecate has agreed in writing to be bound by the provisions of this
Debenture applicable to Xxxxxxx, including but not limited to the provisions of
Section 5(e) and Section 14 hereof. Any transfer of this Debenture shall be of
the entire Debenture and not of any part of the
17
109
indebtedness evidenced hereby or of at least $75,000,000 of the principal
amount thereof.
NOTICE: THE RIGHTS AND OBLIGATIONS OF ALLIED CANADA AND XXXXXXX SHALL
BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND
ANY PRIOR ORAL AGREEMENTS BETWEEN ALLIED CANADA AND XXXXXXX ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS DEBENTURE (AS AMENDED IN WRITING FROM TIME
TO TIME) REPRESENTS THE FINAL AGREEMENT BETWEEN ALLIED CANADA AND XXXXXXX AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR OR CONTEMPORANEOUS ORAL AGREEMENTS
BY ALLIED CANADA AND XXXXXXX. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
ALLIED CANADA AND XXXXXXX.
3294862 CANADA INC.
a Canadian corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Agreed and Accepted:
XXXXXXX INC.
a Canadian corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
19
110
EXHIBIT A
to the 7% Junior Subordinated
Debenture Due 200__ Issued by
3294862 Canada Inc.
in favor of Xxxxxxx Inc.
[Date]
--------------------
--------------------
--------------------
Gentlemen:
Reference is made to the 7% Junior Subordinated Debenture Due 200__
dated __________, 199_ (the "Subordinated Debenture"), in the original
principal amount of $150 million issued by 3294862 CANADA INC., a Canadian
corporation ("Allied Canada"), in favor of Xxxxxxx Inc., a Canadian
corporation, and the [describe Senior Indebtedness] (the "Subject
Indebtedness"), being issued contemporaneously herewith by Allied Canada in
favor of [identity of holder or holders of Subject Indebtedness] (whether one
or more, the "Senior Creditor"). Hereinafter, capitalized words and phrases
used herein which are defined in the Subordinated Debenture are used herein as
therein defined.
The undersigned (the "Subordinated Creditor") hereby represents and
warrants to the Senior Creditor that the Subordinated Creditor is the owner and
holder of the Subordinated Debenture and that the Subordinated Creditor is
entitled to make the agreements herein contained. The Subordinated Creditor
hereby acknowledges and agrees that the principal of, and premium, if any, and
interest on (including interest that, but for the filing of a petition
initiating any Bankruptcy or Insolvency Proceeding would accrue on such
obligations at the time provided in the agreements or instruments creating or
evidencing the respective obligations, whether or not such claim is allowed in
such Bankruptcy or Insolvency Proceeding) and all other amounts of every kind
or nature (including, but not limited to, fees, indemnities and expenses and
any interest rate swaps or other interest rate hedging products entered into in
connection with the Subject Indebtedness) due on or in connection with the
Subject Indebtedness, whether outstanding on the date hereof or hereafter
created, incurred or assumed, guaranteed or in effect guaranteed by Allied
Canada (including all renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing) are in all respects Senior
Indebtedness, that the Senior Creditor (and any other Person who from time to
time is a holder of the Subject Indebtedness) is entitled to the benefits of
Sections 5, 6 and 13 of the Subordinated Debenture and that the Senior Creditor
(and any other Person who from time to time is a holder of the Subject
Indebtedness) may enforce the
A-1
111
terms and provisions of the Subordinated Debenture to the same extent that
Allied Canada or any other holder of Senior Indebtedness would be able to do
so.
The Subordinated Creditor hereby agrees that the Subordinated Debenture
will not be sold, assigned, transferred, pledged or hypothecated in any manner,
directly or indirectly, by the Subordinated Creditor, unless the assignee,
transferee, pledgee or hypothecate has agreed in writing to be bound by the
provisions of this agreement.
The Subordinated Creditor has executed this agreement in the space
provided below in order to induce the Senior Creditor to advance funds or
extend credit to Allied Canada, and this agreement is intended by the
Subordinated Creditor to be a binding and enforceable undertaking by the
Subordinated Creditor in favor of the Senior Creditor.
The rights credited hereby of the Senior Creditor and of any subsequent
holder of the Senior Indebtedness will be assigned automatically, and without
any further act, by the Senior Creditor or such holder upon any sale,
assignment, conveyance or other transfer of all or any part of the Senior
Indebtedness to the extent of the interest sold, assigned, conveyed or
otherwise transferred, unless and to the extent the Senior Creditor or such
holder expressly provides otherwise in the instrument pursuant to which such
interest is conveyed.
Very truly yours,
[NAME OF SUBORDINATED CREDITOR]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Accepted and agreed to as of
the date first above written:
[NAME OF SENIOR CREDITOR]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
A-2
112
EXHIBIT A-2
THIS DEBENTURE HAS NOT BEEN REGISTERED (OR QUALIFIED BY PROSPECTUS) UNDER THE
SECURITIES ACT (DEFINED BELOW), THE CANADIAN SECURITIES LEGISLATION (DEFINED
BELOW), OR THE LAWS OF ANY STATE OF THE UNITED STATES OF AMERICA, AND THIS
DEBENTURE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS HEREOF AND THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT, THE
CANADIAN SECURITIES LEGISLATION AND SUCH STATE LAWS OTHER THAN PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION AND PROSPECTUS REQUIREMENTS AND UPON DELIVERY
TO ALLIED CANADA OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ALLIED
CANADA TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION AND THE
PROSPECTUS DELIVERY REQUIREMENTS UNDER THOSE LAWS.
THIS DEBENTURE WILL BE ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID"). THE HOLDER
OF THIS DEBENTURE SHOULD BE AWARE THAT SUCH HOLDER WILL BE REQUIRED TO INCLUDE
OID IN SUCH HOLDER'S GROSS INCOME FOR INCOME TAX PURPOSES IN ADVANCE OF THE
RECEIPT OF CASH ATTRIBUTABLE TO SUCH INCOME. WITH RESPECT TO OID, THE ISSUE
DATE OF THIS DEBENTURE IS _________________, 199__, THE ISSUE PRICE IS
[$_________], THE AMOUNT OF OID IS [$_________], AND THE YIELD TO MATURITY IS
[______]%.
ZERO COUPON JUNIOR SUBORDINATED DEBENTURE DUE 200__(1)
$168,300,000 _________________, 199__
FOR VALUE RECEIVED, 3294862 CANADA INC., a Canadian corporation ("Allied
Canada"), promises to pay to Xxxxxxx Inc., a Canadian corporation ("Xxxxxxx"),
or its registered assigns, the amount of $168,300,000 on the Maturity Date.
----------------------------------
(1) The due date will be 12 years after the date of issuance.
113
1. Definitions.
(a) For all purposes of this Debenture:
"Accreted Value" means (i) at any date set forth in the table
below (the "Value Date"), the amount set forth opposite such Value Date,
and (ii) at any other date (the "Determination Date"), the amount equal
to the sum of (y) the Accreted Value as of the Value Date immediately
preceding such Determination Date plus (z) an amount equal to the
product of (A) the difference between the Accreted Value as of the Value
Date immediately following such Determination Date minus the Accreted
Value as of the Value Date immediately preceding such Determination Date
multiplied by (B) a fraction, the numerator of which is the number of
days elapsed from (and including) such preceding Value Date to (but
excluding) such Determination Date and the denominator of which is the
number of days from (and including) such preceding Value Date to (but
excluding) the immediately following Value Date.
Value Date(2) Accreted Value
---------- --------------
___________, ____ $ 33,200,000
___________, ____ $ 38,000,000
___________, ____ $ 43,500,000
___________, ____ $ 49,800,000
___________, ____ $ 57,000,000
___________, ____ $ 65,300,000
___________, ____ $ 74,700,000
___________, ____ $ 85,500,000
___________, ____ $ 98,000,000
___________, ____ $112,100,000
___________, ____ $128,400,000
___________, ____ $147,000,000
___________, ____ $168,300,000
"Affiliate" means, with respect to any Person, another Person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such Person,
with the term "control," including the terms "controlling" and
"controlled," meaning for purposes of this definition, the power to
----------------------------------
(2) The initial Value Date shall be the date of the Debenture, and
succeeding Value Dates shall occur each year thereafter until the
Maturity Date.
114
direct the management and policies of a Person, directly or indirectly,
whether through the ownership of voting securities or partnership or
other ownership interests, or by contract or otherwise.
"Allied" means Allied Waste Industries, Inc., a Delaware
corporation, and its successors and assigns.
"Allied Canada" means 3294862 Canada Inc. a Canadian corporation,
and its successors and assigns.
"Allied Common Stock" means the Common Stock, $.01 par value per
share, of Allied.
"Allied U.S." means Allied Holdings (United States), Inc., a
Delaware corporation, and its successors and assigns.
"Allied Warrant" means the warrant for the purchase of shares of
Allied Common Stock to be issued by Allied to Xxxxxxx under Section 2.3
of the Stock Purchase Agreement.
"Bankruptcy or Insolvency Proceeding" is defined in Subsection
4(b) of this Debenture.
"Blockage Period" means any period when a default or an event of
default or an event which, with the giving of notice or the lapse of
time or both, would constitute a default or an event of default has
occurred and is continuing under the terms of the Credit Facility or the
Senior Subordinated Debentures or under the terms of any agreement or
instrument pursuant to which any other Designated Senior Indebtedness is
created, issued, evidenced, secured or guaranteed.
"Business Day" means a day other than Saturday, Sunday or any day
on which banks located in Toronto, Ontario or New York, New York are
authorized or obligated to close.
"Canadian Securities Legislation" means the Securities Act of the
Province of Ontario (R.S.O. 1990, c. S.5, as amended) and similar
provincial legislation, and the regulations and rules promulgated
thereunder.
"Change of Control" means a change resulting when any Unrelated
Person or any Unrelated Persons acting together that would constitute a
Group together with any Affiliates thereof (in each case also
constituting Unrelated Persons) shall at any time Beneficially Own more
than 50% of the aggregate voting power of all classes of Voting Stock of
Allied; provided, however, that if at the date any "Change of Control"
would otherwise have occurred but for the fact that a Person was not an
Unrelated Person because such Person or an Affiliate of such Person
acquired shares of Allied Common Stock or all or any portion of the
Allied Warrant from Xxxxxxx or from any Affiliate
115
of Xxxxxxx within nine months prior to such date, such shares of Allied
Common Stock acquired from Xxxxxxx or any Affiliate of Xxxxxxx, or any
shares of Allied Common Stock issued upon exercise of the Allied Warrant
or any portion thereof, shall at all times thereafter be excluded when
calculating whether a Change of Control has occurred. As used in this
definition of Change of Control (a) "Beneficially Own" means
"beneficially own" as defined in Rule 13d-3 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or any successor
provisions thereto; provided, however, that, for purposes of this
definition, a Person shall not be deemed to Beneficially Own securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates until such tendered
securities are accepted for purchase or exchange; (b) "Group" means a
"group" for purposes of Section 13(d) of the Exchange Act; (c)
"Affiliate" means, with respect to any Person, another Person which
would be an "affiliate" of such Person for purposes of Section 13(d) of
the Exchange Act; (d) "Unrelated Person" means at any time any Person
other than Xxxxxxx, any Person to whom Xxxxxxx or any of its Affiliates
transfers, within nine months prior to such time, any shares of Allied
Common Stock or all or any portion of the Allied Warrant or any
Affiliate of Polaris or any such Person; provided, however, that Persons
(other than Polaris or its Affiliates) to whom Xxxxxxx or any of its
Affiliates transfers any shares of Allied Common Stock or all or any
portion of the Allied Warrant after five years from the date hereof
shall not be deemed Unrelated Persons; and (e) "Voting Stock" of any
Person shall mean capital stock of such Person which 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.
"Credit Facility" means the Credit Agreement dated as of
___________, 199_ among Allied U.S., as borrower, Allied, Xxxxxxx Sachs
Credit Partners L.P., as syndication agent, Citibank, N.A., as
documentation agent, Credit Suisse, as administrative agent, Xxxxxxx
Sachs Credit Partners L.P., Citicorp USA, Inc. and Credit Suisse, as
initial lenders, and the other financial institutions now or hereafter
parties thereto (as the same may be renewed, amended, modified,
increased, extended, refinanced, or otherwise supplemented from time to
time).
"Debenture" means this Zero Coupon Junior Subordinated Debenture
due 200__.
"Default" is defined in Section 6.
"Default Rate" means an annual interest rate equal to 9% per
annum.
"Designated Senior Indebtedness" means (i) the Senior
Indebtedness incurred with respect to the Credit Facility, (ii) the
Senior Indebtedness evidenced by the Senior Subordinated Debentures and
(iii) any other Senior Indebtedness which is incurred pursuant to an
agreement (or series of related agreements simultaneously entered into)
providing for Indebtedness, or commitments to lend, of at least
$10,000,000 at the time
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of determination and is specifically designated in the instrument
evidencing such Senior Indebtedness or the agreement under which such
Senior Indebtedness arises as "Designated Senior Indebtedness."
"$" means U.S. dollars, the lawful currency of the United States
of America.
"Financing Lease" means any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with generally accepted accounting principles to be
capitalized on a balance sheet of the lessee.
"Governmental Entity" means any U.S. or Canadian, territorial,
federal, state, provincial or local court, executive office,
legislature, governmental agency, department, ministry, commission, or
administrative, regulatory or self-regulatory authority or
instrumentality.
"Guarantee" means with respect to any Person any obligation,
contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of such Person, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment
of ) such Indebtedness or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Indebtedness, (b)
to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness of the payment of such
Indebtedness or (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; provided,
however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business.
"Indebtedness" means with respect to any Person at any date, (a)
all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of such
Person which is evidenced by a note, bond, debenture, letter of credit
or similar instrument, (c) all obligations of such Persons with respect
to Guarantees, (d) all obligations of such Person under Financing
Leases, (e) all obligations of such Person in respect of acceptances
issued or created for the account of such Person (other than
endorsements in the ordinary course of business), (f) all obligations
in respect of interest rate swaps or other interest rate hedging
products or foreign currency exchange agreements or exchange rate
hedging arrangements, (g) all obligations in respect of reimbursement
obligations under letters of credit, and (h) all liabilities of the type
referred to in clauses (a) through (g) above that are secured by any
lien, charge, security interest or encumbrance on any property owned by
such Person even though such Person has not assumed or otherwise become
liable for the payment thereof.
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"Indenture" means the Indenture dated _____________, 199__,
between Allied U.S. and the Trustee pursuant to which the Senior
Subordinated Debentures are issued.
"Xxxxxxx" means Xxxxxxx Inc., a Canadian corporation.
"LTI" means Xxxxxxx Transportation, Inc., a Delaware corporation.
"Maturity Date" _________________, 200__ [12 years after the date
hereof].
"Offset Letter Agreement" means the letter agreement dated the
date hereof among Allied, 3294862 Canada Inc., Xxxxxxx and LTI, in
substantially the form of Exhibit N to the Stock Purchase Agreement.
"Person" means an individual, corporation, partnership,
association, joint stock company, limited liability company,
Governmental Entity, business trust, unincorporated organization, or
other legal entity.
"Representative" means at any date, with respect to the Credit
Facility, the Person or Persons then acting as the administrative agent
under the Credit Facility, with respect to the Senior Subordinated
Debentures, the Trustee, and with respect to any other Designated Senior
Indebtedness, the holders of such Designated Senior Indebtedness or any
Person acting as agent of such holders at such date.
"Section 8 Prepayment Date" is defined in Section 8(b) of this
Debenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means principal of, and premium, if any,
and interest on (including interest that, but for the filing of a
petition initiating any proceeding pursuant to any Bankruptcy or
Insolvency Proceeding, would accrue on such obligations at the rate
provided in the agreements or instruments creating or evidencing the
respective obligations, whether or not such claim is allowed or
allowable in such Bankruptcy or Insolvency Proceeding) and all other
amounts of every kind or nature (including, but not limited to, fees,
indemnities and expenses) due on or in connection with, any Indebtedness
of Allied Canada, whether outstanding on the date of this Debenture or
thereafter created, incurred, assumed or Guaranteed by Allied Canada
(including all renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing) unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the
same or pursuant to which the same is outstanding expressly provides
that such Indebtedness shall not be senior in right of payment to this
Debenture. Without limiting the generality of the foregoing, "Senior
Indebtedness" shall include (a) all obligations and liabilities of every
kind and nature (including, but not limited to, fees, expenses and
indemnities) under the Credit Facility or the Senior Subordinated
Indebtedness, (b) all obligations and liabilities of every kind and
nature (including, but not limited to, fees, expenses and indemnities)
in respect of any interest rate swaps or other interest rate hedging
product entered into in connection with Indebtedness incurred
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or to be incurred pursuant to the Credit Facility, and (c) any renewal,
extension, refinancing or rearrangement of any indebtedness incurred or
to be incurred pursuant to the Credit Facility or the Senior
Subordinated Indebtedness. Notwithstanding the foregoing, Senior
Indebtedness shall not include (i) amounts owed (except to banks,
insurance companies and other financing institutions and except for
obligations under Financing Leases) for goods, materials, services or
operating lease rental payments in the ordinary course of business or
for compensation to employees of Allied Canada, (ii) any liability for
federal, state, provincial, local or other taxes owed or owing by Allied
Canada and (iii) Indebtedness with respect to Allied Canada's 7% Junior
Subordinated Debentures due 200_ dated the date hereof and the Guaranty
thereof by the Guarantor.
"Senior Subordinated Debentures" means the ___% Senior
Subordinated Debentures due 200_(3) in the aggregate original principal
amount of at least $475,000,000 issued by Allied U.S. pursuant to the
Indenture.
"Stock Purchase Agreement" means the Stock Purchase Agreement
dated as of September 17, 1996, among Allied, Allied Canada, Xxxxxxx and
certain other parties named therein.
"Subordinated Obligations" is defined in Subsection 4(a).
"Subsidiary" of a Person means an Affiliate of that Person more
than 50% of the aggregate voting power (or of any other form of voting
equity interest in the case of a Person that is not a corporation) of
which is beneficially owned by that Person directly or indirectly
through one or more other Subsidiaries.
"Trustee" means ________________________________, a national
banking association, in its capacity as trustee under the Indenture, and
its successors in such capacity.
(b) Capitalized terms defined in this Debenture are equally
applicable to both their singular and plural forms. References to a
designated "Section" or "Subsections" refer to a Section or Subsection of this
Debenture, unless otherwise specifically indicated. In this Debenture,
"including" is used only to indicate examples, without limitation to the
indicated examples, and without limiting any generality which precedes it.
2. Interest; Default Rate. From (and including) the date of this
Debenture through (and including) the Maturity Date, no interest shall accrue
or be payable with respect to this Debenture. All past due principal of this
Debenture shall accrue interest at the Default Rate from (but not including)
the Maturity Date through (but not including) the date of payment. From and
after the Maturity Date, interest will be calculated on the basis of the actual
number of days elapsed over a year composed of 365 days (or 366 days, as the
case may be).
----------------------------------
(3) The due date of the Senior Subordinated Debentures will be 10 years
after the date of issuance.
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3. Payment Terms. Subject to Section 4:
(a) The outstanding principal balance of this Debenture and
all accrued and unpaid interest thereon shall be due and payable on the
Maturity Date.
(b) No interest is payable with respect to the principal
amount of this Debenture prior to the Maturity Date. After the
Maturity Date, interest will be payable in arrears on the ________ day
of each ___________ and ____________ of each year on the principal
balance of this Debenture outstanding from time to time.(4)
(c) Each payment or prepayment hereunder shall be made by wire
transfer to an account located in Canada designated by Xxxxxxx.
(d) Any payment or action that is due hereunder on a day which
is not a Business Day shall be deferred until the next succeeding
Business Day (but interest shall continue to accrue on any applicable
payment until such payment is made).
4. Subordination.
(a) The indebtedness evidenced by, and all obligations in
respect of, this Debenture (including the obligations under Section 8)
and the payment of principal of, premium and interest, if any, on and
all other obligations in respect of, this Debenture (collectively, the
"Subordinated Obligations") are expressly subordinate to all Senior
Indebtedness to the extent and in the manner set forth herein. For
purposes hereof, the term "subordinate" means that, unless and until the
Senior Indebtedness has been indefeasibly paid in full in cash, Xxxxxxx
will not have the right under any circumstances to, and will not, take,
demand, commence any suit or any other proceeding for collection, pursue
any other judicial or non-judicial remedy or receive from Allied Canada
or any of its Subsidiaries or Affiliates, and Allied Canada will not and
will not permit any of its Subsidiaries or Affiliates to, make, give,
or permit, directly or indirectly, by set-off, redemption, purchase or
in any other manner, any payment of or on account of the Subordinated
Obligations; provided, however, that at any time, except during a
Blockage Period, Allied Canada shall make, and Xxxxxxx may receive, and
Xxxxxxx may commence any suit or other proceeding for collection of,
scheduled payments of principal or interest on this Debenture in
accordance with the terms hereof and, provided, further, that at any
time, except during a Blockage Period, Allied Canada may prepay this
Debenture so long as such prepayment would not cause the occurrence of a
Blockage Period. Upon the termination of any Blockage Period, the right
of Xxxxxxx to receive payments shall be reinstated, and Allied Canada
shall resume making such payments to Xxxxxxx in accordance with the
terms hereof. In no event shall Allied Canada be obligated to make, and
Allied Canada shall not make, and shall not permit any of its
Subsidiaries or Affiliates to make, directly or indirectly, by set-off,
redemption, purchase or in any other manner, any payments or prepayments
of,
----------------------------------
(4) Interest will be payable each six months after the Maturity Date.
120
or on account of, any of the Subordinated Obligations during any
Blockage Period or if such payment or prepayment would cause the
occurrence of a Blockage Period.
(b) Upon any payment or distribution of any kind or character
to creditors of Allied Canada (whether in cash, property or securities)
in (x) a total or partial liquidation, winding up or dissolution of
Allied Canada (whether voluntarily or involuntarily) or (y) in a
bankruptcy, reorganization, insolvency, receivership or similar
proceeding (including a proceeding under the Canadian Companies'
Creditors Arrangement Act) relating to Allied Canada or its property, or
in an assignment for the benefit of creditors or any marshaling of
Allied Canada's assets and liabilities (any of the foregoing in clauses
(x) and (y) being referred to herein as a "Bankruptcy or Insolvency
Proceeding"), the holders of Senior Indebtedness will be entitled to
receive payment in full in cash of all the principal of and interest on
and other amounts payable in respect of such Senior Indebtedness
(including interest accruing after the commencement of any such
proceeding at the rate specified in the agreements or instruments
creating or evidencing the applicable Senior Indebtedness and whether
or not such interest is an allowed or allowable claim under applicable
law) before Xxxxxxx will be entitled to receive any payment with respect
to this Debenture (whether in cash, property or securities); and until
all obligations with respect to Senior Indebtedness are paid in full in
cash, any distribution received by Xxxxxxx or to which Xxxxxxx would be
entitled shall be paid over or made to the holders of Senior
Indebtedness. Upon the occurrence of any Bankruptcy or Insolvency
Proceeding relating to Allied Canada, the holders of the Senior
Indebtedness are authorized and empowered to (i) demand, xxx for,
collect and receive every payment or distribution on account of the
Subordinated Obligations payable or deliverable in connection with such
event or proceeding and give acquittance therefor, and (ii) file claims
and proofs of claim in any statutory or non-statutory proceeding and
take such other actions as may be necessary or desirable for the
enforcement of the subordination provisions of this Debenture. Promptly
after taking any action provided in clauses (i) or (ii) above, Allied
Canada shall give written notice thereof to the holder of this
Debenture; provided, however that failure to give such notice shall in
no event affect the validity of any action so taken.
(c) In the event that, notwithstanding the occurrence of any
of the events described in Subsections 4(a) and (b), any such payment or
distribution of assets of Allied Canada of any kind or character,
whether in cash, property or securities, shall be received by the holder
of this Debenture which is not permitted hereby such payment or
distribution shall be held in trust for the ratable benefit of, and
shall be paid over or delivered to, the holders of the Senior
Indebtedness.
(d) The holders of the Senior Indebtedness shall have no duty
or obligation to the holder of this Debenture in any manner whatsoever
and may, at any time and from time to time, in their sole discretion,
without the consent of or notice to the holder of this Debenture and
without impairing or releasing any rights of the holders of the Senior
Indebtedness or any of the obligations of the holder of this Debenture
hereunder, take any or all of the following actions:
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(i) change the amount, manner, place, terms of payment
or interest rate, change or extend the time of payment of, or
renew or alter, any of the Senior Indebtedness, or amend or
supplement or waive any of the terms of any instrument or
agreement now or hereafter executed pursuant to which any of the
Senior Indebtedness is issued or incurred;
(ii) sell, exchange, release, surrender, relend, realize
upon or otherwise deal with in any manner and in any order, any
property (or the income, revenues, profits or proceeds therefrom)
by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, any Senior Indebtedness;
(iii) release any person liable in any manner for the
payment or collection of the Senior Indebtedness;
(iv) exercise or refrain from exercising any rights and
remedies against Allied Canada or others, or otherwise act or
refrain from acting or, for any reason, fail to file, record or
otherwise perfect any security interest in or lien on any
property of Allied Canada or any other Person; and
(v) apply any sums received by the holders of the
Senior Indebtedness, by whomsoever paid and however realized, to
payment of the Senior Indebtedness in such manner as the holders
of the Senior Indebtedness, in their sole discretion, may deem
appropriate.
(e) Xxxxxxx and any future holder of this Debenture, by
acceptance of this Debenture, agree to provide to any holder of Senior
Indebtedness, at any time and from time to time, upon the written
request of Allied Canada or such holder of Senior Indebtedness, an
agreement signed by Xxxxxxx or such future holder of this Debenture
addressed to the holder of such Senior Indebtedness in substantially the
form of, and on substantially the terms set out in, Exhibit A attached
hereto to the effect that such Person is a holder of Senior
Indebtedness, that the holder or holders of such Senior Indebtedness are
entitled to the benefits of Sections 4, 5 and 12 of this Debenture and
that the holder or holders of such Senior Indebtedness may enforce the
terms and provisions thereof to the same extent Allied Canada would be
able to do so, provided, however, that prior to furnishing such
agreement, Xxxxxxx has received from Allied Canada or such holder such
information as Xxxxxxx may reasonably request demonstrating to Xxxxxxx'
reasonable satisfaction that such Person is a holder of Senior
Indebtedness. Xxxxxxx, and each subsequent holder of this Debenture, by
acceptance of this Debenture, irrevocably appoint Allied Canada (with
full power of substitution) as its agent and attorney in fact (which
appointment is coupled with an interest and shall be irrevocable so long
as any Senior Indebtedness is outstanding) to execute and deliver on
behalf and in the name of Xxxxxxx or such holder, as the case may be, an
agreement in substantially the form of, and on substantially the terms
set out in, Exhibit A hereto in favor of each such holder of Senior
Indebtedness and to take such further action as may be necessary or
appropriate to effectuate the subordination as provided herein.
Promptly after exercise of any such power, Allied Canada will give
written
122
notice thereof to the holders of the Debenture; provided, however, that
failure to give such notice shall in no event affect the validity of any
power so exercised.
(f) If a Default shall have occurred and be continuing (other
than a Default pursuant to Section 6(b) or (c)) and the holder of this
Debenture elects to accelerate this Debenture pursuant to Section 7,
Xxxxxxx shall give the Representative under the Credit Facility 30 days'
prior written notice before accelerating this Debenture, which notice
shall state that it is a "Notice of Intent to Accelerate;" provided,
however, that Xxxxxxx shall not be required to give such notice if at
such time payment of any Indebtedness incurred pursuant to the Credit
Facility shall have been accelerated. If payment of this Debenture is
accelerated because of a Default, the holder shall promptly notify the
Representatives under the Designated Senior Indebtedness and the holders
of all other Senior Indebtedness of the acceleration.
(g) Until all Senior Indebtedness has been indefeasibly paid
in full in cash, the holders of this Debenture shall not be entitled to
assert, enforce or otherwise exercise any right of subrogation against
Allied Canada or any other Person obligated on the Subordinated
Obligations. After all Senior Indebtedness has been indefeasibly paid
in full in cash, and until the Subordinated Obligations have been so
paid in full, the holder of this Debenture shall be subrogated to the
rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness. A distribution made under this
Section 4 to holders of Senior Indebtedness which otherwise would have
been made to the holder of this Debenture is not, as between Allied
Canada and the holder of this Debenture, a payment by Allied Canada on
Senior Indebtedness.
(h) This Section 4 defines the relative rights of the holder
of this Debenture and holders of Senior Indebtedness. Nothing in this
Debenture shall:
(i) impair, as between Allied Canada and the holder of
this Debenture, the obligation of Allied Canada, which is
absolute and unconditional, to pay principal of and premium and
interest, if any, on this Debenture in accordance with its terms;
or
(ii) except as otherwise set forth in this Section 4,
prevent the holder of this Debenture from exercising its
available remedies upon a Default, subject to the rights of
holders of Senior Indebtedness to receive distributions otherwise
payable to such holder.
5. No Impairment. Section 4, this Section 5, the proviso to Section
7(a), and Section 12 (and all defined terms used in such sections) shall
constitute a continuing offer to all Persons who become holders of, or continue
to hold, Senior Indebtedness, and such provisions are made for the benefit of
the holders from time to time of Senior Indebtedness, and such Persons are
conclusively presumed to have relied upon such provisions; and such holders are
made obligees hereunder, and they or each of them may enforce such provisions.
No right of any present or future holder of any Senior Indebtedness to enforce
the subordination or other provisions referred to in this Section 5 shall at
any time in any way be
123
prejudiced or impaired by any act or failure to act on the part of Allied
Canada or Xxxxxxx, or by any non-compliance by Allied Canada or Xxxxxxx with
the terms, provisions and covenants of this Debenture, regardless of any
knowledge thereof any such holder may have or otherwise be charged with.
Section 4, this Section 5 and the subordination and other provisions referred
to in this Section 5 may not be amended or modified in any manner which might
terminate or impair the subordination or such other provisions except with the
prior written consent of the Representatives of all the Designated Senior
Indebtedness.
6. Events of Default. "Default" means the occurrence of one or more
of the following:
(a) Payment. Allied Canada fails to pay the outstanding
principal amount of this Debenture on the Maturity Date.
(b) Voluntary Bankruptcy. Allied Canada (i) files a petition
initiating a voluntary Bankruptcy or Insolvency Proceeding, (ii) seeks,
consents to, or does not contest the appointment of a receiver or
trustee for itself or for all or any substantial part of its property,
(iii) is voluntarily adjudicated a bankrupt or insolvent, (iv) makes a
general assignment for the benefit of its creditors, or (v) admits in
writing its inability to pay its debts as they mature.
(c) Involuntary Bankruptcy. A petition is filed against
Allied Canada seeking to initiate a Bankruptcy or Insolvency Proceeding
and such petition is not dismissed within 180 days after being filed, or
a court of competent jurisdiction enters an order, judgment or decree
appointing a receiver or trustee for Allied Canada, or for all or
substantially all of its property, and such order, judgment or decree is
not discharged or stayed within 180 days after its entry.
(d) Acceleration of Other Indebtedness. An event of default
occurs and is continuing under the Credit Facility and, as a result
thereof, the Indebtedness outstanding pursuant to the Credit Facility is
accelerated; provided, however, that in the event the holders of such
Indebtedness elect to waive such event of default or to otherwise
de-accelerate such Indebtedness, no Default shall subsist hereunder.
7. Remedies of Xxxxxxx. Upon the occurrence and during the
continuance of a Default, Xxxxxxx shall have the following rights:
(a) Acceleration. Subject to the provisions of Section 4
hereof, Xxxxxxx may, at its option, declare the entire principal balance
of this Debenture, together with the accrued and unpaid interest
thereon, immediately due and payable without notice of Default, notice
of intent to accelerate, notice of acceleration, or any other notice,
presentment, protest, demand or action of any kind or nature whatsoever
(each of which is hereby expressly waived by Allied Canada), whereupon
the entire Indebtedness under this Debenture shall become immediately
due and payable; provided, however, that no such acceleration (except
for an acceleration upon the occurrence of a Default specified in
Subsection 7(d)) shall be effective or of any force whatsoever and the
holder of this
124
Debenture may not take any action against Allied Canada with respect to
a Default hereunder if made during a Blockage Period, or if such
acceleration would result in a Blockage Period; provided, further, that
in the event the Indebtedness under this Debenture is accelerated upon
the occurrence of a Default specified in Subsection 7(d) and the holders
of the Indebtedness outstanding pursuant to the Credit Facility elect to
waive the event of default giving rise to the acceleration thereunder or
otherwise elect to de-accelerate such Indebtedness, Xxxxxxx shall
de-accelerate the obligations hereunder.
(b) Other Rights. Except as otherwise modified hereby,
Xxxxxxx shall have all rights and remedies available at law or equity
and the same (i) shall be cumulative and concurrent, (ii) may be pursued
separately, successively, or concurrently against Allied Canada, (iii)
may be exercised as often as occasion therefor shall arise, it being
agreed by Allied Canada that the exercise or failure to exercise any of
the same shall in no event be construed as a waiver or release thereof
or of any other right or remedy, and (iv) are intended to be, and shall
be, nonexclusive.
8. Offer of Prepayment upon Change of Control.
(a) Allied Canada will, within thirty business days after any
executive officer of Allied Canada has knowledge of the occurrence of a
Change of Control, give written notice of such Change of Control to the
holder of this Debenture. Subject to the provisions of Section 5, such
notice shall contain and constitute an offer to prepay this Debenture as
described in subsection (b) of this Section 8.
(b) The offer to prepay this Debenture contemplated by
subsection (a) of this Section 8 shall be an offer to prepay, in
accordance with and subject to this Section 8, all, but not less than
all, of this Debenture on a date specified in such offer (the "Section 8
Prepayment Date") which date shall be not less than 45 days and not more
than 60 days after the date of such offer (if the Section 8 Prepayment
Date shall not be specified in such offer, the Section 8 Prepayment Date
shall be the first business day after the 45th day after the date of
such offer).
(c) The holder of this Debenture may accept the offer to
prepay made pursuant to this Section 8 in whole but not in part by
causing a notice of such acceptance to be delivered to Allied Canada
within ten business days after receipt of the written notice to be given
pursuant to subsection (a) of this Section 8. A failure by a holder of
this Debenture to respond within such time period to an offer to prepay
made pursuant to this Section 8 shall be deemed to constitute a
rejection of such offer.
(d) Prepayment of this Debenture pursuant to this Section 8
shall be at the Accreted Value of the Debenture at the Section 8
Prepayment Date. The prepayment shall be made on the Section 8
Prepayment Date.
(e) Notwithstanding any provision hereof to the contrary, in
no event shall Allied Canada prepay (or be obligated to prepay) this
Debenture pursuant to this
125
Section 8 until 91 days after Allied Canada shall have prepaid the
Senior Indebtedness incurred pursuant to the Credit Facility and the
Senior Subordinated Debentures, and all other Senior Indebtedness which
is entitled to be prepaid upon the occurrence of a Change of Control,
unless the holder or holders of such Senior Indebtedness have waived or
otherwise failed to enforce their rights to receive a prepayment of the
Senior Indebtedness held by them to which they are entitled in
connection with such Change of Control.
9. Captions. The captions, headings, and arrangements used in this
Debenture are for convenience only and do not affect or modify the terms of
this Debenture.
10. Notices. All notices or other communications which are required
or may be given under this Debenture shall be in writing and shall be deemed to
have been duly given when delivered in person or transmitted by telecopier
(with receipt confirmed) at the address or telecopy number set forth below (as
any such address or telecopier number may be changed from time to time by
notice similarly given):
(1) if to Xxxxxxx, to:
Xxxxxxx Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(2) if to Allied Canada, to:
3294862 Canada Inc.
c/o Allied Waste Industries, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
11. Applicable Law. This Debenture shall be governed by and construed
in accordance with the laws of the State of Delaware and the laws of the United
States of America applicable therein (without reference to the conflicts of law
principles thereof).
126
12. Transfer Restriction. This Debenture may not be sold, assigned,
transferred, pledged or hypothecated in any manner, directly or indirectly, by
Xxxxxxx or any other holder, unless the assignee, transferee, pledgee or
hypothecate has agreed in writing to be bound by the provisions of this
Debenture applicable to Xxxxxxx, including but not limited to the provisions of
Section 4(e) and Section 13 hereof. Any transfer of this Debenture shall be of
the entire Debenture and not of any part of the indebtedness evidenced hereby
or of at least $75,000,000 of the principal amount thereof.
NOTICE: THE RIGHTS AND OBLIGATIONS OF ALLIED CANADA AND XXXXXXX SHALL
BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND
ANY PRIOR ORAL AGREEMENTS BETWEEN ALLIED CANADA AND XXXXXXX ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS DEBENTURE (AS AMENDED IN WRITING FROM TIME
TO TIME) REPRESENTS THE FINAL AGREEMENT BETWEEN ALLIED CANADA AND XXXXXXX AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR OR CONTEMPORANEOUS ORAL AGREEMENTS
BY ALLIED CANADA AND XXXXXXX. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
ALLIED CANADA AND XXXXXXX.
3294862 CANADA INC.
a Canadian corporation
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
Agreed and Accepted:
XXXXXXX INC.
a Canadian corporation
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
127
EXHIBIT A
to the Zero Coupon Junior Subordinated
Debenture Due 200__ Issued by
3294862 Canada Inc.
in favor of Xxxxxxx Inc.
[Date]
---------------
---------------
---------------
Gentlemen:
Reference is made to the Zero Coupon Junior Subordinated Debenture Due
200__ dated __________, 199__ (the "Subordinated Debenture"), in the original
principal amount of $________________ issued by 3294862 Canada Inc., a Canadian
corporation ("Allied Canada"), in favor of Xxxxxxx Inc., a Canadian
corporation, and the [describe Senior Indebtedness] (the "Subject
Indebtedness"), being issued contemporaneously herewith by Allied Canada in
favor of [identity of holder or holders of Subject Indebtedness] (whether one
or more, the "Senior Creditor"). Hereinafter, capitalized words and phrases
used herein which are defined in the Subordinated Debenture are used herein as
therein defined.
The undersigned (the "Subordinated Creditor") hereby represents and
warrants to the Senior Creditor that (a) the Subordinated Creditor is the owner
and holder of the Subordinated Debenture and that the Subordinated Creditor is
entitled to make the agreements herein contained. The Subordinated Creditor
hereby acknowledges and agrees that the principal of, and premium, if any, and
interest on (including interest that, but for the filing of a petition
initiating any Bankruptcy or Insolvency Proceeding would accrue on such
obligations at the rate provided in the agreements or instruments creating or
evidencing the respective obligations, whether or not such Bankruptcy or
Insolvency Proceeding and all other amounts of every kind or nature (including,
but not limited to, fees, indemnities and expenses and any interest rate swaps
or other interest rate hedging products entered into in connection with the
Subject Indebtedness) due on or in connection with, the Subject Indebtedness,
whether outstanding on the date hereof or hereafter created, incurred or
assumed, guaranteed or in effect guaranteed by Allied Canada (including all
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing) are in all respects Senior Indebtedness, (b) the
Senior Creditor (and any other Person who from time to time is a holder of the
Subject Indebtedness) is entitled to the benefits of Sections 4, 5 and 12 of
the Subordinated Debenture, and (c) the Senior Creditor (and any other Person
who from time to time is a holder of the Subject Indebtedness) may enforce the
terms and provisions of the Subordinated Debenture to the same extent that
Allied Canada or any other holder of Senior Indebtedness would be able to do
so.
128
The Subordinated Creditor hereby agrees that the Subordinated
Debenture will not be sold, assigned, transferred, pledged or hypothecated in
any manner, directly or indirectly, by the Subordinated Creditor, unless the
assignee, transferee, pledgee or hypothecate has agreed in writing to be bound
by the provisions of this agreement.
The Subordinated Creditor has executed this agreement in the space
provided below in order to induce the Senior Creditor to advance funds or
extend credit to Allied Canada, and this agreement is intended by the
Subordinated Creditor to be a binding and enforceable undertaking by the
Subordinated Creditor in favor of the Senior Creditor.
The rights created hereby of the Senior Creditor and of any subsequent
holder of the Senior Indebtedness will be assigned automatically, and without
any further act, by the Senior Creditor or such holder upon any sale,
assignment, conveyance or other transfer of all or any part of the Senior
Indebtedness to the extent of the interest sold, assigned, conveyed or
otherwise transferred, unless and to the extent the Senior Creditor or such
holder expressly provides otherwise in the instrument pursuant to which such
interest is conveyed.
Very truly yours,
[NAME OF SUBORDINATED CREDITOR]
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted and agreed to as of
the date first above written:
[NAME OF SENIOR CREDITOR]
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
129
EXHIBIT B-1
THIS DEBENTURE HAS NOT BEEN REGISTERED (OR QUALIFIED BY PROSPECTUS) UNDER THE
SECURITIES ACT (DEFINED BELOW), THE CANADIAN SECURITIES LEGISLATION (DEFINED
BELOW), OR THE LAWS OF ANY STATE OF THE UNITED STATES OF AMERICA, AND THIS
DEBENTURE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS HEREOF AND THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT, THE
CANADIAN SECURITIES LEGISLATION AND SUCH STATE LAWS OTHER THAN PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS AND UPON
DELIVERY TO ALLIED FINANCE OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
ALLIED FINANCE TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION AND
THE PROSPECTUS DELIVERY REQUIREMENTS UNDER THOSE LAWS.
THIS DEBENTURE WILL BE ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID"). THE HOLDER
OF THIS DEBENTURE SHOULD BE AWARE THAT SUCH HOLDER WILL BE REQUIRED TO INCLUDE
OID IN SUCH HOLDER'S GROSS INCOME FOR INCOME TAX PURPOSES IN ADVANCE OF THE
RECEIPT OF CASH ATTRIBUTABLE TO SUCH INCOME. WITH RESPECT TO OID, THE ISSUE
DATE OF THIS DEBENTURE IS _________________, 199_, THE ISSUE PRICE IS
[$_________], THE AMOUNT OF OID IS [$_________], AND THE YIELD TO MATURITY IS
[______]%.
7% JUNIOR SUBORDINATED DEBENTURE DUE 200_(1)
$150,000,000 _________________, 199_
FOR VALUE RECEIVED, 3294854 CANADA INC., a Canadian corporation ("Allied
Finance"), promises to pay to Xxxxxxx Inc., a Canadian corporation ("Xxxxxxx"),
or its registered assigns, the principal amount of $150,000,000 on the
Maturity Date, with interest on the principal balance outstanding from time to
time at the rate and payable at the times and in the manner hereinafter set
forth.
-------------------------------
(1) The due date will be 12 years after the date of issuance.
130
1. Definitions.
(a) For all purposes of this Debenture:
"Affiliate" means, with respect to any Person, another Person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such Person
with the term "control," including the terms "controlling" and
"controlled," meaning for purposes of this definition, the power to
direct the management and policies of a Person, directly or indirectly,
whether through the ownership of voting securities or partnership or
other ownership interests, or by contract or otherwise.
"Allied" means Allied Waste Industries, Inc., a Delaware
corporation, and its successors and assigns.
"Allied Common Stock" means the Common Stock, $.01 par value per
share, of Allied.
"Allied Finance" means 3294854 Canada Inc., a Canadian
corporation, and its successors and assigns.
"Allied U.S." means Allied Holdings (United States), Inc., a
Delaware corporation, and its successors and assigns.
"Allied Warrant" means the warrant for the purchase of shares of
Allied Common Stock to be issued by Allied to Xxxxxxx under Section 2.3
of the Stock Purchase Agreement.
"Bankruptcy or Insolvency Proceeding" is defined in Subsection
5(b) of this Debenture.
"Blockage Period" means any period when a default or an event of
default or an event which, with the giving of notice or the lapse of
time or both, would constitute a default or an event of default has
occurred and is continuing under the terms of the Credit Facility or the
Senior Subordinated Debentures or under the terms of any agreement or
instrument pursuant to which any other Designated Senior Indebtedness is
created, issued, evidenced, secured or guaranteed.
"Business Day" means a day other than Saturday, Sunday or any day
on which banks located in Toronto, Ontario or New York, New York are
authorized or obligated to close.
"Canadian Securities Legislation" means the Securities Act of the
Province of Ontario (R.S.O. 1990, c. S.5, as amended) and similar
provincial legislation, and the regulations and rules promulgated
thereunder.
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131
"Change of Control" means a change resulting when any Unrelated
Person or any Unrelated Persons acting together that would constitute a
Group together with any Affiliates thereof (in each case also
constituting Unrelated Persons) shall at any time Beneficially Own more
than 50% of the aggregate voting power of all classes of Voting Stock of
Allied; provided, however, that if at the date any "Change of Control"
would otherwise have occurred but for the fact that a Person was not an
Unrelated Person because such Person or an Affiliate of such Person
acquired shares of Allied Common Stock or all or any portion of the
Allied Warrant from Xxxxxxx or from any Affiliate of Xxxxxxx within nine
months prior to such date, such shares of Allied Common Stock acquired
from Xxxxxxx or any Affiliate of Xxxxxxx, or any shares of Allied Common
Stock issued upon exercise of the Allied Warrant or any portion thereof,
shall at all times thereafter be excluded when calculating whether a
Change of Control has occurred. As used in this definition of Change of
Control (a) "Beneficially Own" means "beneficially own" as defined in
Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor provisions thereto; provided, however,
that, for purposes of this definition, a Person shall not be deemed to
Beneficially Own securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates until such tendered securities are accepted for purchase or
exchange; (b) "Group" means a "group" for purposes of Section 13(d) of
the Exchange Act; (c) "Affiliate" means, with respect to any Person,
another Person which would be an "affiliate" of such Person for purposes
of Section 13(d) of the Exchange Act; (d) "Unrelated Person" means at
any time any Person other than Xxxxxxx, any Person to whom Xxxxxxx or
any of its Affiliates transfers, within nine months prior to such time,
any shares of Allied Common Stock or all or any portion of the Allied
Warrant or any Affiliate of Xxxxxxx or any such Person; provided,
however, that Persons (other than Xxxxxxx or its Affiliates) to whom
Xxxxxxx or any of its Affiliates transfers any shares of Allied Common
Stock or all or any portion of the Allied Warrant after five years from
the date hereof shall not be deemed Unrelated Persons; and (e) "Voting
Stock" of any Person shall mean capital stock of such Person which
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.
"Credit Facility" means the Credit Agreement dated as of
_____________, 199_, among Allied U.S., as borrower, Allied, Xxxxxxx
Sachs Credit Partners L.P., as syndication agent, Citibank, N.A., as
documentation agent, Credit Suisse, as administrative agent, Xxxxxxx
Sachs Credit Partners L.P., Citicorp USA, Inc. and Credit Suisse, as
initial lenders, and the other financial institutions now or hereafter
parties thereto (as the same may be renewed, amended, modified,
increased, extended, refinanced, or otherwise supplemented from time to
time).
"Debenture" means this 7% Junior Subordinated Debenture due
200__.
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"Default" is defined in Section 8.
"Default Rate" means an annual interest rate equal to 9% per
annum.
"Deferral Period" is defined in Subsection 3(b).
"Designated Senior Indebtedness" means (i) the Senior
Indebtedness incurred with respect to the Credit Facility, (ii) the
Senior Indebtedness evidenced by the Senior Subordinated Debentures and
(iii) any other Senior Indebtedness which is incurred pursuant to an
agreement (or series of related agreements simultaneously entered into)
providing for Indebtedness, or commitments to lend, of at least
$10,000,000 at the time of determination and is specifically designated
in the instrument evidencing such Senior Indebtedness or the agreement
under which such Senior Indebtedness arises as "Designated Senior
Indebtedness."
"$" means U.S. dollars, the lawful currency of the United States
of America.
"Financing Lease" means any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with generally accepted accounting principles to be
capitalized on a balance sheet of the lessee.
"Governmental Entity" means any U.S. or Canadian, territorial,
federal, state, provincial or local court, executive office,
legislature, governmental agency, department, ministry, commission, or
administrative, regulatory or self-regulatory authority or
instrumentality.
"Guarantee" means with respect to any Person any obligation,
contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of such Person, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment
of ) such Indebtedness or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Indebtedness, (b)
to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness of the payment of such
Indebtedness or (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; provided,
however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business.
"Indebtedness" means with respect to any Person at any date, (a)
all indebtedness of such Person for borrowed money or for the deferred
purchase
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price of property or services (other than current trade liabilities
incurred in the ordinary course of business and payable in accordance
with customary practices), (b) any other indebtedness of such Person
which is evidenced by a note, bond, debenture, letter of credit or
similar instrument, (c) all obligations of such Persons with respect to
Guarantees, (d) all obligations of such Person under Financing Leases,
(e) all obligations of such Person in respect of acceptances issued or
created for the account of such Person (other than endorsements in the
ordinary course of business), (f) all obligations in respect of
interest rate swaps or other interest rate hedging products or foreign
currency exchange agreements or exchange rate hedging arrangements, (g)
all obligations in respect of reimbursement obligations under letters of
credit, and (h) all liabilities of the type referred to in clauses (a)
through (g) above that are secured by any lien, charge, security
interest or encumbrance on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment
thereof.
"Indenture" means the Indenture dated _____________, 199_,
between Allied U.S. and the Trustee pursuant to which the Senior
Subordinated Debentures are issued.
"Xxxxxxx" means Xxxxxxx Inc., a Canadian corporation.
"LTI" means Xxxxxxx Transportation, Inc., a Delaware corporation.
"Maturity Date" means _______________ ___, 200_ [12 years after
the date hereof].
"Offset Letter Agreement" means the letter agreement dated the
Closing Date among Allied, Allied Finance, Xxxxxxx and LTI, in
substantially the form of Exhibit N attached to this Agreement, to be
executed and delivered pursuant to Section 3.3.
"Person" means an individual, corporation, partnership,
association, joint stock company, limited liability company,
Governmental Entity, business trust, unincorporated organization, or
other legal entity.
"Representative" means at any date, with respect to the Credit
Facility, the Person or Persons then acting as the administrative agent
under the Credit Facility, with respect to the Senior Subordinated
Debentures, the Trustee, and with respect to any other Designated Senior
Indebtedness, the holders of such Designated Senior Indebtedness or any
Person acting as agent of such holders at such date.
"Section 4(b) Prepayment Date" is defined in Subsection 4(b) of
this Debenture.
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"Section 4(b) Prepayment Fraction" means, with respect to any
prepayment pursuant to Section 4(b) of this Debenture, the fraction
obtained by dividing the principal amount of the Debenture to be prepaid
by $150 million.
"Section 4(b) Prepayment Notice" is defined in Subsection 4(b) of
this Debenture.
"Section 4(b) Prepayment Option" is defined in Subsection 4(b) of
this Debenture.
"Section 4(b) Prepayment Price" means (i) at any date set forth
in the table below (the "Section 4(b) Value Date"), the amount set forth
opposite such Section 4(b) Value Date, and (ii) at any other date (the
"Section 4(b) Determination Date"), the amount equal to the sum of (y)
the Section 4(b) Prepayment Price as of the Section 4(b) Value Date
immediately preceding such Section 4(b) Determination Date plus (z) an
amount equal to the product of (A) the difference between the Section
4(b) Prepayment Price as of the Section 4(b) Value Date immediately
following such Section 4(b) Determination Date minus the Section 4(b)
Prepayment Price as of the Section 4(b) Value Date immediately preceding
such Section 4(b) Determination Date multiplied by (B) a fraction, the
numerator of which is the number of days elapsed from (and including)
such preceding Section 4(b) Value Date to (but excluding) such Section
4(b) Determination Date and the denominator of which is the number of
days from (and including) such preceding Section 4(b)Value Date to (but
excluding) the immediately following Section 4(b)Value Date.
Section 4(b) Section 4(b) Section 4(b) Section 4(b)
Value Date (2) Prepayment Price Value Date Prepayment Price
---------- ---------------- ---------- ----------------
___________, ____ $126,700,000 ___________, ____ $144,700,000
___________, ____ $130,400,000 ___________, ____ $150,000,000
___________, ____ $134,600,000 ___________, ____ $150,000,000
___________, ____ $139,400,000 ___________, ____ $150,000,000
"Section 9 Prepayment Date" is defined in Section 9(b) of this
Debenture.
"Section 9 Purchase Price" means (i) at any time prior to five
years from the date hereof, $126,700,000, (ii) at any date set forth in
the table below (the "Section 9 Value Date"), the amount set forth
opposite such Section 9
----------------------------
(2) The initial Section 4(b) Value Date shall be the date five years after
the date of the Debenture, and succeeding Section 4(b) Value Dates
shall occur annually thereafter until the Maturity Date.
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135
Value Date, and (iii) at any other date (the "Section 9 Determination
Date"), the amount equal to the sum of (y) the Section 9 Purchase Price
as of the Section 9 Value Date immediately preceding such Section 9
Determination Date plus (z) an amount equal to the product of (A) the
difference between the Section 9 Purchase Price as of the Section 9
Value Date immediately following such Section 9 Determination Date minus
the Section 9 Purchase Price as of the Section 9 Value Date immediately
preceding such Section 9 Determination Date multiplied by (B) a
fraction, the numerator of which is the number of days elapsed from (and
including) such preceding Section 9 Value Date to (but excluding) such
Section 9 Determination Date and the denominator of which is the number
of days from (and including) such preceding Section 9 Value Date to (but
excluding) the immediately following Section 9 Value Date.
Section 9 Section 9 Section 9 Section 9
Value Date (3) Prepayment Price Value Date Prepayment Price
---------- ---------------- ---------- ----------------
___________, ____ $126,700,000 ___________, ____ $144,700,000
___________, ____ $130,400,000 ___________, ____ $150,000,000
___________, ____ $134,600,000 ___________, ____ $150,000,000
___________, ____ $139,400,000 ___________, ____ $150,000,000
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means principal of, and premium, if any,
and interest on (including interest that, but for the filing of a
petition initiating any Bankruptcy or Insolvency Proceeding, would
accrue on such obligations at the rate provided in the agreements or
instruments creating or evidencing the respective obligations, whether
or not such claim is allowed or allowable in such Bankruptcy or
Insolvency Proceeding) and all other amounts of every kind or nature
(including, but not limited to, fees, indemnities and expenses) due on
or in connection with any Indebtedness of Allied Finance, whether
outstanding on the date of this Debenture or thereafter created,
incurred, assumed or Guaranteed by Allied Finance (including all
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing) unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant
to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to this Debenture.
Without limiting the generality of the foregoing, "Senior Indebtedness"
shall include (a) all obligations and liabilities of every kind and
nature (including, but not limited to, fees, expenses and indemnities)
under the Credit Facility, the Senior
---------------------------
(3) The initial Section 9 Value Date shall be the date five years after
the date of the Debenture, and succeeding Section 9 Value Dates shall
occur annually thereafter until the Maturity Date.
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Subordinated Debentures or the Indenture, (b) all obligations and
liabilities of every kind and nature (including, but not limited to,
fees, expenses and indemnities) in respect of any interest rate swaps or
other interest rate hedging product entered into in connection with
Indebtedness incurred or to be incurred pursuant to the Credit Facility,
and (c) any renewal, extension, refinancing or rearrangement of any
Indebtedness incurred or to be incurred pursuant to the Credit Facility,
the Senior Subordinated Debentures or the Indenture. Notwithstanding
the foregoing, Senior Indebtedness shall not include (i) amounts owed
(except to banks, insurance companies and other financing institutions
and except for obligations under Financing Leases) for goods, materials,
services or operating lease rental payments in the ordinary course of
business or for compensation to employees of Allied Finance, (ii) any
liability for federal, state, provincial, local or other taxes owed or
owing by Allied Finance and (iii) Indebtedness with respect to Allied
Finance's Zero Coupon Junior Subordinated Debenture due 200_ dated the
date hereof.
"Senior Subordinated Debentures" means the ___% Senior
Subordinated Debentures due 200__(4) in the aggregate original principal
amount of at least $475,000,000 issued by Allied U.S. pursuant to the
Indenture.
"Stock Purchase Agreement" means the Stock Purchase Agreement
dated as of September 17, 1996, among Allied, Allied Finance, Xxxxxxx
and certain other parties named therein.
"Subordinated Obligations" is defined in Subsection 5(a).
"Subscription Agreement" means the Subscription Agreement dated
the date hereof among Allied, Allied Finance, Xxxxxxx and LTI.
"Subsidiary" of a Person means an Affiliate of that Person more
than 50% of the aggregate voting power (or of any other form of voting
equity interest in the case of a Person that is not a corporation) of
which is beneficially owned by that Person directly or indirectly
through one or more other Subsidiaries.
"Trustee" means ________________________________, a national
banking association, in its capacity as trustee under the Indenture, and
its successors in such capacity.
(b) Capitalized terms defined in this Debenture are equally
applicable to both their singular and plural forms. References to a
designated "Section" or "Subsections" refer to a Section or Subsection of this
Debenture, unless otherwise specifically
---------------------------
(4) The due date of the Senior Subordinated Debentures will be 10 years
after the date of issuance.
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indicated. In this Debenture, "including" is used only to indicate examples,
without limitation to the indicated examples, and without limiting any
generality which precedes it.
2. Interest Rate; Default Rate. From (and including) the date of
this Debenture through (but not including) the earlier of the Maturity Date or
the date the maturity of this Debenture is accelerated pursuant to Section
8(a), interest shall accrue on the unpaid principal balance of this Debenture
at an annual fixed rate equal to 7% per annum. All past due principal and
interest shall accrue interest at the Default Rate from (and including) the day
after the date such principal or interest is payable hereunder through (but not
including) the date of payment. Interest will be calculated on the basis of
the actual number of days elapsed over a year composed of 365 days (or 366
days, as the case may be).
3. Payment Terms. Subject to Section 5:
(a) The outstanding principal balance of this Debenture and
all accrued and unpaid interest thereon shall be due and payable on the
Maturity Date.
(b) During the period beginning on the date hereof and ending
three years thereafter (the "Deferral Period"), interest on the
outstanding principal balance of this Debenture will accrue but will be
deferred. During the Deferral Period, interest will be compounded
semi-annually. After the Deferral Period, at the election of Allied
Finance, the deferred interest may be paid at any time, and (i) the
aggregate unpaid amount, if any, of interest deferred during the
Deferral Period, together with interest thereon at the rate of 7% per
annum, will be payable in eighteen equal (or as nearly equal as
possible) installments on the ___ day of each _______ and _______ of
each year (beginning __________, __), and on the Maturity Date and (ii)
interest on the outstanding principal balance of this Debenture will be
due and payable in arrears on the _____ day of each ___________ and
_____________ of each year (beginning ___________, ____), and on the
Maturity Date for the period commencing on (and including) the later of
the date following the last day of the Deferral Period or the date to
which interest hereon has been paid, as the case may be, and ending on
(but excluding) the date of payment.(5)
(c) Each payment or prepayment hereunder shall be made in cash
by wire transfer to an account located in Canada designated by Xxxxxxx.
(d) Any payment or action that is due hereunder on a day which
is not a Business Day shall be deferred until the next succeeding
Business Day
---------------------------
(5) Installments of interest will be payable on a semi-annual basis
commencing six months after the last day of the Deferral Period.
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(but interest shall continue to accrue on any applicable payment until
such payment is made).
(e) Pursuant to Article II of the Subscription Agreement, LTI
has agreed to subscribe for shares of Allied Common Stock from time to
time. Reference is made to the Subscription Agreement for a complete
statement of the terms and conditions pursuant to which such shares are
to be issued.
4. Optional Redemption.
(a) Except to the extent provided in Section 9, this Debenture
may not be redeemed or prepaid, in whole or in part, on or before the
date which is five years after the date hereof.
(b) Thereafter, except as otherwise provided in Section 5,
Allied Finance shall have the right and option (the "Section 4(b)
Prepayment Option") to redeem and prepay this Debenture, in whole or in
part, at a discount, on the terms and subject to the conditions of this
Section 4(b). Allied Finance may exercise the Section 4(b) Prepayment
Option at any time by giving the holder of this Debenture written notice
(the "Section 4(b) Prepayment Notice") of its election to exercise the
Section 4(b) Prepayment Option and by specifying in the Section 4(b)
Prepayment Notice the date on which Allied Finance will prepay this
Debenture pursuant to this Section 4(b) (the "Section 4(b) Prepayment
Date") and the principal amount of this Debenture to be prepaid. The
Section 4(b) Prepayment Date shall be at least 10 Business Days, and not
more than 20 Business Days, after the date of the Section 4(b)
Prepayment Notice. Upon the Section 4(b) Prepayment Date, Allied
Finance shall prepay this Debenture to the extent specified in the
Section 4(b) Prepayment Notice, by payment of an amount equal to the
product obtained by multiplying the Section 4(b) Prepayment Price as of
the Section 4(b) Prepayment Date times the Section 4(b) Prepayment
Fraction.
5. Subordination.
(a) The indebtedness evidenced by, and all obligations in
respect of, this Debenture (including the obligations under Section 9)
and the payment of principal of, premium and interest, if any, on and
all other obligations in respect of, this Debenture (collectively, the
"Subordinated Obligations") are expressly subordinate to all Senior
Indebtedness to the extent and in the manner set forth herein. For
purposes hereof, the term "subordinate" means that, unless and until the
Senior Indebtedness has been indefeasibly paid in full in cash, Xxxxxxx
will not have the right under any circumstances to, and will not, take,
demand, commence any suit or any other proceeding for collection, pursue
any other judicial or non-judicial remedy or receive from Allied Finance
or any of its Subsidiaries or Affiliates, and Allied Finance will not
and will not permit any of its Subsidiaries or Affiliates to, make,
give, or permit, directly or indirectly,
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139
by set-off, redemption, purchase or in any other manner, any payment of
or on account of the Subordinated Obligations; provided, however, that
at any time, except during a Blockage Period, Allied Finance shall make,
and Xxxxxxx may receive, and Xxxxxxx may commence any suit or other
proceeding for collection of, scheduled payments of principal or
interest on this Debenture in accordance with the terms hereof and,
provided, further, that at any time, except during a Blockage Period,
Allied Finance may prepay this Debenture so long as such prepayment
would not cause the occurrence of a Blockage Period. Upon the
termination of any Blockage Period, the right of Xxxxxxx to receive
payments (including payments not made during the Blockage Period) shall
be reinstated, and Allied Finance shall resume making such payments to
Xxxxxxx in accordance with the terms hereof. In no event shall Allied
Finance be obligated to make, and Allied Finance shall not make, and
shall not permit any of its Subsidiaries or Affiliates to make, directly
or indirectly, by set-off, redemption, purchase or in any other manner,
any payments or prepayments of, or on account of, any of the
Subordinated Obligations during any Blockage Period or if such payment
or prepayment would cause the occurrence of a Blockage Period.
(b) Upon any payment or distribution of any kind or character
to creditors of Allied Finance (whether in cash, property or securities)
in (x) a total or partial liquidation, winding up or dissolution of
Allied Finance (whether voluntarily or involuntarily) or (y) in a
bankruptcy, reorganization, insolvency, receivership or similar
proceeding (including a proceeding under the Canadian Companies'
Creditors Arrangement Act) relating to Allied Finance or its property,
or in an assignment for the benefit of creditors or any marshaling of
Allied Finance's assets and liabilities (any of the foregoing in clauses
(x) and (y) being referred to herein as a "Bankruptcy or Insolvency
Proceeding"), the holders of Senior Indebtedness will be entitled to
receive payment in full in cash of all the principal of and interest on
and other amounts payable in respect of such Senior Indebtedness
(including interest accruing after the commencement of any such
proceeding at the rate specified in the agreements or instruments
creating or evidencing the applicable Senior Indebtedness and whether
or not such interest is an allowed or allowable claim under applicable
law) before Xxxxxxx will be entitled to receive any payment with respect
to this Debenture (whether in cash, property or securities); and until
all obligations with respect to Senior Indebtedness are indefeasibly
paid in full in cash, any distribution received by Xxxxxxx or to which
Xxxxxxx would be entitled shall be paid over or made to the holders of
Senior Indebtedness. Upon the occurrence of any Bankruptcy or
Insolvency Proceeding relating to Allied Finance, the holders of the
Senior Indebtedness are authorized and empowered to (i) demand, xxx for,
collect and receive every payment or distribution on account of the
Subordinated Obligations payable or deliverable in connection with such
event or proceeding and give acquittance therefor, and (ii) file claims
and proofs of claim in any statutory or non- statutory proceeding and
take such other actions as may be necessary or desirable for the
enforcement of the subordination provisions of this
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Debenture. Promptly after taking any action provided in clauses (i) or
(ii) above, Allied Finance shall give written notice thereof to the
holder of this Debenture; provided, however, that failure to give such
notice shall in no event affect the validity of any action so taken.
(c) In the event that, notwithstanding the occurrence of any
of the events described in Subsections 5(a) and (b), any such payment or
distribution of assets of Allied Finance of any kind or character,
whether in cash, property or securities, shall be received by the holder
of this Debenture which is not permitted hereby such payment or
distribution shall be held in trust for the ratable benefit of, and
shall be paid over or delivered to, the holders of the Senior
Indebtedness.
(d) The holders of the Senior Indebtedness shall have no duty
or obligation to the holder of this Debenture in any manner whatsoever
and may, at any time and from time to time, in their sole discretion,
without the consent of or notice to the holder of this Debenture and
without impairing or releasing any rights of the holders of the Senior
Indebtedness or any of the obligations of the holder of this Debenture
hereunder, take any or all of the following actions:
(i) change the amount, manner, place, terms of payment
or interest rate, change or extend the time of payment of, or
renew or alter, any of the Senior Indebtedness, or amend or
supplement or waive any of the terms of any instrument or
agreement now or hereafter executed pursuant to which any of the
Senior Indebtedness is issued or incurred;
(ii) sell, exchange, release, surrender, relend, realize
upon or otherwise deal with in any manner and in any order, any
property (or the income, revenues, profits or proceeds therefrom)
by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, any Senior Indebtedness;
(iii) release any person liable in any manner for the
payment or collection of the Senior Indebtedness;
(iv) exercise or refrain from exercising any rights and
remedies against Allied Finance or others, or otherwise act or
refrain from acting or, for any reason, fail to file, record or
otherwise perfect any security interest in or lien on any
property of Allied Finance or any other Person; and
(v) apply any sums received by the holders of the
Senior Indebtedness, by whomsoever paid and however realized, to
payment of the Senior Indebtedness in such manner as the holders
of the Senior Indebtedness, in their sole discretion, may deem
appropriate.
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(e) Xxxxxxx and any future holder of this Debenture, by
acceptance of this Debenture, agree to provide to any holder of Senior
Indebtedness, at any time and from time to time, upon the written
request of Allied Finance or such holder of Senior Indebtedness an
agreement signed by Xxxxxxx or such future holder of this Debenture
addressed to the holder of such Senior Indebtedness in substantially the
form of, and on substantially the terms set out in, Exhibit A attached
hereto to the effect that such holder is a holder of Senior
Indebtedness, that the holder or holders of such Senior Indebtedness are
entitled to the benefits of Sections 5, 6 and 13 of this Debenture and
that the holder or holders of such Senior Indebtedness may enforce the
terms and provisions thereof to the same extent Allied Finance would be
able to do so, provided, however, that prior to furnishing such
agreement, Xxxxxxx has received from Allied Finance or such holder such
information as Xxxxxxx may reasonably request demonstrating to Xxxxxxx'x
reasonable satisfaction that such holder is a holder of Senior
Indebtedness. Xxxxxxx, and each subsequent holder of this Debenture, by
acceptance of this Debenture, irrevocably appoint Allied Finance (with
full power of substitution) as its agent and attorney in fact (which
appointment is coupled with an interest and shall be irrevocable so long
as any Senior Indebtedness is outstanding) to execute and deliver on
behalf and in the name of Xxxxxxx or such holder, as the case may be, an
agreement in substantially the form of, and on substantially the terms
set out in, Exhibit A hereto in favor of each such holder of Senior
Indebtedness and to take such further action as may be necessary or
appropriate to effectuate the subordination as provided herein.
Promptly after exercise of any such power, Allied Finance will give
written notice thereof to the holder of the Debenture; provided,
however, that failure to give such notice shall in no event affect the
validity of any power so exercised.
(f) If a Default shall have occurred and be continuing (other
than a Default pursuant to Subsection 7(b) or (c)) and the holder of
this Debenture elects to accelerate this Debenture pursuant to Section
8, Xxxxxxx shall give the Representative under the Credit Facility 30
days' prior written notice before accelerating this Debenture, which
notice shall state that it is a "Notice of Intent to Accelerate";
provided, however, that Xxxxxxx shall not be required to give such
notice if at such time payment of any Indebtedness incurred pursuant to
the Credit Facility shall have been accelerated. If payment of this
Debenture is accelerated because of a Default, the holder shall promptly
notify the Representatives under the Designated Senior Indebtedness and
the holders of all other Senior Indebtedness of the acceleration.
(g) Until all Senior Indebtedness has been indefeasibly paid
in full in cash, the holders of this Debenture shall not be entitled to
assert, enforce or otherwise exercise any right of subrogation against
Allied Finance or any other Person obligated on the Subordinated
Obligations. After all Senior Indebtedness has been indefeasibly paid
in full in cash, and until the Subordinated Obligations have been so
paid in full, the holder of this Debenture shall be subrogated to the
rights of holders of Senior Indebtedness to receive distributions
applicable to
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Senior Indebtedness. A distribution made under this Section 5 to
holders of Senior Indebtedness which otherwise would have been made to
the holder of this Debenture is not, as between Allied Finance and the
holder of this Debenture, a payment by Allied Finance on Senior
Indebtedness.
(h) This Section 5 defines the relative rights of the holder
of this Debenture and holders of Senior Indebtedness. Nothing in this
Debenture shall:
(i) impair, as between Allied Finance and such holder,
the obligation of Allied Finance, which is absolute and
unconditional, to pay principal of and, premium and interest, if
any, on this Debenture in accordance with its terms; or
(ii) except as otherwise set forth in this Section 5,
prevent the holder of this Debenture from exercising its
available remedies upon a Default, subject to the rights of
holders of Senior Indebtedness to receive distributions otherwise
payable to such holder.
6. No Impairment. Section 5, this Section 6, the proviso to
Subsection 8(a), and Section 13 (and all defined terms used in such sections)
shall constitute a continuing offer to all Persons who become holders of, or
continue to hold, Senior Indebtedness, and such provisions are made for the
benefit of the holders from time to time of Senior Indebtedness, and such
Persons are conclusively presumed to have relied upon such provisions; and such
holders are made obligees hereunder, and they or each of them may enforce such
provisions. No right of any present or future holder of any Senior
Indebtedness to enforce the subordination or other provisions referred to in
this Section 6 shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of Allied Finance or Xxxxxxx, or by any
non-compliance by Allied Finance or Xxxxxxx with the terms, provisions and
covenants of this Debenture, regardless of any knowledge thereof any such
holder may have or otherwise be charged with. Section 5, this Section 6 and
the subordination and other provisions referred to in this Section 6 may not be
amended or modified in any manner which might terminate or impair the
subordination or such other provisions except with the prior written consent of
the Representatives of all the Designated Senior Indebtedness.
7. Events of Default. "Default" means the occurrence of one or more
of the following:
(a) Payment. Allied Finance fails to pay the outstanding
principal amount of this Debenture on the Maturity Date.
(b) Voluntary Bankruptcy. Allied Finance (i) files a petition
initiating a voluntary Bankruptcy or Insolvency Proceeding, (ii) seeks,
consents to, or does not contest the appointment of a receiver or
trustee for itself or for all or any substantial part of its property,
(iii) is voluntarily adjudicated a bankrupt or
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143
insolvent, (iv) makes a general assignment for the benefit of its
creditors, or (v) admits in writing its inability to pay its debts as
they mature.
(c) Involuntary Bankruptcy. A petition is filed against
Allied Finance seeking to initiate a Bankruptcy or Insolvency Proceeding
and such petition is not dismissed within 180 days after being filed, or
a court of competent jurisdiction enters an order, judgment or decree
appointing a receiver or trustee for Allied Finance, or for all or
substantially all of its property, and such order, judgment or decree is
not discharged or stayed within 180 days after its entry.
(d) Acceleration of Other Indebtedness. An event of default
occurs and is continuing under the Credit Facility and, as a result
thereof, the Indebtedness outstanding pursuant to the Credit Facility is
accelerated; provided, however, that in the event the holders of such
Indebtedness elect to waive such event of default or to otherwise
de-accelerate such Indebtedness, no Default shall subsist hereunder.
8. Remedies of Xxxxxxx. Upon the occurrence and during the
continuance of a Default, Xxxxxxx shall have the following rights:
(a) Acceleration. Subject to the provisions of Section 5
hereof, Xxxxxxx may, at its option, declare the entire principal balance
of this Debenture, together with the accrued and unpaid interest
thereon, immediately due and payable without notice of Default, notice
of intent to accelerate, notice of acceleration, or any other notice,
presentment, protest, demand or action of any kind or nature whatsoever
(each of which is hereby expressly waived by Allied Finance), whereupon
the entire Indebtedness under this Debenture shall become immediately
due and payable; provided, however, that no such acceleration (except
for an acceleration upon the occurrence of a Default specified in
Subsection 7(d)) shall be effective or of any force whatsoever and the
holder of this Debenture may not take any action against Allied Finance
with respect to a Default hereunder if made during a Blockage Period, or
if such acceleration would result in a Blockage Period; provided,
further, that in the event the Indebtedness under this Debenture is
accelerated upon the occurrence of a Default specified in Subsection
7(d) and the holders of the Indebtedness outstanding pursuant to the
Credit Facility elect to waive the event of default giving rise to the
acceleration thereunder or otherwise elect to de-accelerate such
Indebtedness, Xxxxxxx shall de-accelerate the obligations hereunder.
(b) Other Rights. Except as otherwise modified hereby,
Xxxxxxx shall have all rights and remedies available at law or equity
and the same (i) shall be cumulative and concurrent, (ii) may be pursued
separately, successively, or concurrently against Allied Finance, (iii)
may be exercised as often as occasion therefor shall arise, it being
agreed by Allied Finance that the exercise or failure to exercise any of
the same shall in no event be construed as a waiver or release
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144
thereof or of any other right or remedy, and (iv) are intended to be,
and shall be, nonexclusive.
9. Offer of Prepayment upon Change of Control.
(a) Allied Finance will, within thirty business days after any
executive officer of Allied Finance has knowledge of the occurrence of a
Change of Control, give written notice of such Change of Control to the
holder of this Debenture. Subject to the provisions of Section 5, such
notice shall contain and constitute an offer to prepay this Debenture as
described in Subsection 9(b).
(b) The offer to prepay this Debenture contemplated by
Subsection 9(a) shall be an offer to prepay, in accordance with and
subject to this Section 9, all, but not less than all, of this Debenture
at the Section 9 Purchase Price, together with all interest accrued and
unpaid hereon, on a date specified in such offer (the "Section 9
Prepayment Date") which date shall be not less than 45 days and not more
than 60 days after the date of such offer (if the Section 9 Prepayment
Date shall not be specified in such offer, the Section 9 Prepayment Date
shall be the first business day after the 45th day after the date of
such offer).
(c) The holder of this Debenture may accept the offer to
prepay made pursuant to this Section 9 in whole but not in part by
causing a notice of such acceptance to be delivered to Allied Finance
within ten business days after receipt of the written notice to be given
pursuant to Subsection 9(a). A failure by a holder of this Debenture to
respond within such time period to an offer to prepay made pursuant to
this Section 9 shall be deemed to constitute a rejection of such offer.
(d) Prepayment of this Debenture pursuant to this Section 9
shall be at the Section 9 Purchase Price. The prepayment shall be made
on the Section 9 Prepayment Date.
(e) Notwithstanding any provision hereof to the contrary, in
no event shall Allied Finance prepay (or be obligated to prepay) this
Debenture pursuant to this Section 9 until 91 days after Allied Finance
shall have prepaid the Senior Indebtedness incurred pursuant to the
Credit Facility and the Senior Subordinated Debentures, and all other
Senior Indebtedness which is entitled to be prepaid upon the occurrence
of a Change of Control, unless the holder or holders of such Senior
Indebtedness have waived or otherwise failed to enforce their rights to
receive a prepayment of the Senior Indebtedness held by them to which
they are entitled in connection with such Change of Control.
10. Captions. The captions, headings, and arrangements used in this
Debenture are for convenience only and do not affect or modify the terms of
this Debenture.
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11. Notices. All notices or other communications which are required
or may be given under this Debenture shall be in writing and shall be deemed to
have been duly given when delivered in person or transmitted by telecopier
(with receipt confirmed) at the address or telecopy number set forth below (as
any such address or telecopier number may be changed from time to time by
notice similarly given):
(1) if to Xxxxxxx, to:
Xxxxxxx Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(2) if to Allied Finance, to:
3294854 CANADA INC.
c/o Allied Waste Industries, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
12. Applicable Law. This Debenture shall be governed by and
construed in accordance with the laws of the State of Delaware and the laws of
the United States of America applicable therein (without reference to the
conflicts of law principles thereof).
13. Transfer Restriction. This Debenture may not be sold, assigned,
transferred, pledged or hypothecated in any manner, directly or indirectly, by
Xxxxxxx or any other holder, unless the assignee, transferee, pledgee or
hypothecate has agreed in writing to be bound by the provisions of this
Debenture applicable to Xxxxxxx, including but not limited to the provisions of
Section 5(e) and Section 14 hereof. Any transfer of this Debenture shall be of
the entire Debenture and not of any part of the indebtedness evidenced hereby
or of at least $75,000,000 of the principal amount thereof.
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146
14. OFFSET. THE OBLIGATIONS OF ALLIED FINANCE HEREUNDER ARE, IN ALL
RESPECTS, SUBJECT TO OFFSET AS MORE FULLY SET FORTH IN THE OFFSET LETTER
AGREEMENT. THE OFFSET RIGHTS SET FORTH IN THE OFFSET LETTER AGREEMENT SHALL BE
EFFECTIVE NOTWITHSTANDING THE ASSIGNMENT OR TRANSFER OF THIS DEBENTURE BY
XXXXXXX AND ANY TRANSFEREE SHALL TAKE THIS DEBENTURE SUBJECT TO THE TERMS
THEREOF.
NOTICE: THE RIGHTS AND OBLIGATIONS OF ALLIED FINANCE AND XXXXXXX SHALL
BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND
ANY PRIOR ORAL AGREEMENTS BETWEEN ALLIED FINANCE AND XXXXXXX ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS DEBENTURE (AS AMENDED IN WRITING FROM TIME
TO TIME) REPRESENTS THE FINAL AGREEMENT BETWEEN ALLIED FINANCE AND XXXXXXX AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR OR CONTEMPORANEOUS ORAL AGREEMENTS
BY ALLIED FINANCE AND XXXXXXX. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
ALLIED FINANCE AND XXXXXXX.
3294854 CANADA, LTD.
a Canadian corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Agreed and Accepted:
XXXXXXX INC.
a Canadian corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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EXHIBIT A
to the 7% Junior Subordinated
Debenture Due 200__ Issued by
3294854 Canada, Ltd.
in favor of Xxxxxxx Inc.
[Date]
--------------------
--------------------
--------------------
Gentlemen:
Reference is made to the 7% Junior Subordinated Debenture Due 200__
dated __________, 199_ (the "Subordinated Debenture"), in the original
principal amount of $150 million issued by 3294854 CANADA INC., a Canadian
corporation ("Allied Finance"), in favor of Xxxxxxx Inc., a Canadian
corporation, and the [describe Senior Indebtedness] (the "Subject
Indebtedness"), being issued contemporaneously herewith by Allied Finance in
favor of [identity of holder or holders of Subject Indebtedness] (whether one
or more, the "Senior Creditor"). Hereinafter, capitalized words and phrases
used herein which are defined in the Subordinated Debenture are used herein as
therein defined.
The undersigned (the "Subordinated Creditor") hereby represents and
warrants to the Senior Creditor that the Subordinated Creditor is the owner and
holder of the Subordinated Debenture and that the Subordinated Creditor is
entitled to make the agreements herein contained. The Subordinated Creditor
hereby acknowledges and agrees that the principal of, and premium, if any, and
interest on (including interest that, but for the filing of a petition
initiating any Bankruptcy or Insolvency Proceeding would accrue on such
obligations at the time provided in the agreements or instruments creating or
evidencing the respective obligations, whether or not such claim is allowed in
such Bankruptcy or Insolvency Proceeding) and all other amounts of every kind
or nature (including, but not limited to, fees, indemnities and expenses and
any interest rate swaps or other interest rate hedging products entered into in
connection with the Subject Indebtedness) due on or in connection with the
Subject Indebtedness, whether outstanding on the date hereof or hereafter
created, incurred or assumed, guaranteed or in effect guaranteed by Allied
Finance (including all renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing) are in all respects Senior
Indebtedness, that the Senior Creditor (and any other Person who from time to
time is a holder of the Subject Indebtedness) is entitled to the benefits of
Sections 5, 6 and 13 of the Subordinated Debenture and that the Senior Creditor
(and any other Person who from time to time is a holder of the Subject
Indebtedness) may enforce the
A-1
148
terms and provisions of the Subordinated Debenture to the same extent that
Allied Finance or any other holder of Senior Indebtedness would be able to do
so.
The Subordinated Creditor hereby agrees that the Subordinated Debenture
will not be sold, assigned, transferred, pledged or hypothecated in any manner,
directly or indirectly, by the Subordinated Creditor, unless the assignee,
transferee, pledgee or hypothecate has agreed in writing to be bound by the
provisions of this agreement.
The Subordinated Creditor has executed this agreement in the space
provided below in order to induce the Senior Creditor to advance funds or
extend credit to Allied Finance, and this agreement is intended by the
Subordinated Creditor to be a binding and enforceable undertaking by the
Subordinated Creditor in favor of the Senior Creditor.
The rights credited hereby of the Senior Creditor and of any subsequent
holder of the Senior Indebtedness will be assigned automatically, and without
any further act, by the Senior Creditor or such holder upon any sale,
assignment, conveyance or other transfer of all or any part of the Senior
Indebtedness to the extent of the interest sold, assigned, conveyed or
otherwise transferred, unless and to the extent the Senior Creditor or such
holder expressly provides otherwise in the instrument pursuant to which such
interest is conveyed.
Very truly yours,
[NAME OF SUBORDINATED CREDITOR]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Accepted and agreed to as of
the date first above written:
[NAME OF SENIOR CREDITOR]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
A-2
149
EXHIBIT B-2
THIS DEBENTURE HAS NOT BEEN REGISTERED (OR QUALIFIED BY PROSPECTUS) UNDER THE
SECURITIES ACT (DEFINED BELOW), THE CANADIAN SECURITIES LEGISLATION (DEFINED
BELOW), OR THE LAWS OF ANY STATE OF THE UNITED STATES OF AMERICA, AND THIS
DEBENTURE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS HEREOF AND THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT, THE
CANADIAN SECURITIES LEGISLATION AND SUCH STATE LAWS OTHER THAN PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION AND PROSPECTUS REQUIREMENTS AND UPON DELIVERY
TO ALLIED FINANCE OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ALLIED
FINANCE TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION AND THE
PROSPECTUS DELIVERY REQUIREMENTS UNDER THOSE LAWS.
THIS DEBENTURE WILL BE ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID"). THE HOLDER
OF THIS DEBENTURE SHOULD BE AWARE THAT SUCH HOLDER WILL BE REQUIRED TO INCLUDE
OID IN SUCH HOLDER'S GROSS INCOME FOR INCOME TAX PURPOSES IN ADVANCE OF THE
RECEIPT OF CASH ATTRIBUTABLE TO SUCH INCOME. WITH RESPECT TO OID, THE ISSUE
DATE OF THIS DEBENTURE IS _________________, 199__, THE ISSUE PRICE IS
[$_________], THE AMOUNT OF OID IS [$_________], AND THE YIELD TO MATURITY IS
[______]%.
ZERO COUPON JUNIOR SUBORDINATED DEBENTURE DUE 200__(1)
$168,300,000 _________________, 199__
FOR VALUE RECEIVED, 3294854 CANADA INC., a Canadian corporation
("Allied Finance"), promises to pay to Xxxxxxx Inc., a Canadian corporation
("Xxxxxxx"), or its registered assigns, the amount of $168,300,000 on the
Maturity Date.
----------------------------------
(1) The due date will be 12 years after the date of issuance.
150
1. Definitions.
(a) For all purposes of this Debenture:
"Accreted Value" means (i) at any date set forth in the table
below (the "Value Date"), the amount set forth opposite such Value
Date, and (ii) at any other date (the "Determination Date"), the
amount equal to the sum of (y) the Accreted Value as of the Value Date
immediately preceding such Determination Date plus (z) an amount equal
to the product of (A) the difference between the Accreted Value as of
the Value Date immediately following such Determination Date minus the
Accreted Value as of the Value Date immediately preceding such
Determination Date multiplied by (B) a fraction, the numerator of
which is the number of days elapsed from (and including) such
preceding Value Date to (but excluding) such Determination Date and
the denominator of which is the number of days from (and including)
such preceding Value Date to (but excluding) the immediately following
Value Date.
Value Date (2) Accreted Value Value Date Accreted Value
---------- -------------- ---------- --------------
___________, ____ $ 33,200,000 ___________, ____ $ 85,500,000
___________, ____ $ 38,000,000 ___________, ____ $ 98,500,000
___________, ____ $ 43,500,000 ___________, ____ $112,100,000
___________, ____ $ 49,800,000 ___________, ____ $128,400,000
___________, ____ $ 57,000,000 ___________, ____ $147,000,000
___________, ____ $ 65,300,000 ___________, ____ $168,300,000
___________, ____ $ 74,700,000 ___________, ____
"Affiliate" means, with respect to any Person, another Person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such
Person, with the term "control," including the terms "controlling" and
"controlled," meaning for purposes of this definition, the power to
direct the management and policies of a Person, directly or
indirectly, whether through the ownership of voting securities or
partnership or other ownership interests, or by contract or otherwise.
"Allied" means Allied Waste Industries, Inc., a Delaware
corporation, and its successors and assigns.
"Allied Common Stock" means the Common Stock, $.01 par value
per share, of Allied.
----------------------------------
(2) The initial Value Date shall be the date of the Debenture, and
succeeding Value Dates shall occur each year thereafter until the
Maturity Date.
151
"Allied Finance" means 3294854 Canada Inc. a Canadian
corporation, and its successors and assigns.
"Allied U.S." means Allied Holdings (United States), Inc., a
Delaware corporation, and its successors and assigns.
"Allied Warrant" means the warrant for the purchase of shares
of Allied Common Stock to be issued by Allied to Xxxxxxx under Section
2.3 of the Stock Purchase Agreement.
"Bankruptcy or Insolvency Proceeding" is defined in Subsection
4(b) of this Debenture.
"Blockage Period" means any period when a default or an event
of default or an event which, with the giving of notice or the lapse
of time or both, would constitute a default or an event of default has
occurred and is continuing under the terms of the Credit Facility or
the Senior Subordinated Debentures or under the terms of any agreement
or instrument pursuant to which any other Designated Senior
Indebtedness is created, issued, evidenced, secured or guaranteed.
"Business Day" means a day other than Saturday, Sunday or any
day on which banks located in Toronto, Ontario or New York, New York
are authorized or obligated to close.
"Canadian Securities Legislation" means the Securities Act of
the Province of Ontario (R.S.O. 1990, c. S.5, as amended) and similar
provincial legislation, and the regulations and rules promulgated
thereunder.
"Change of Control" means a change resulting when any
Unrelated Person or any Unrelated Persons acting together that would
constitute a Group together with any Affiliates thereof (in each case
also constituting Unrelated Persons) shall at any time Beneficially
Own more than 50% of the aggregate voting power of all classes of
Voting Stock of Allied; provided, however, that if at the date any
"Change of Control" would otherwise have occurred but for the fact
that a Person was not an Unrelated Person because such Person or an
Affiliate of such Person acquired shares of Allied Common Stock or all
or any portion of the Allied Warrant from Xxxxxxx or from any
Affiliate of Xxxxxxx within nine months prior to such date, such
shares of Allied Common Stock acquired from Xxxxxxx or any Affiliate
of Xxxxxxx, or any shares of Allied Common Stock issued upon exercise
of the Allied Warrant or any portion thereof, shall at all times
thereafter be excluded when calculating whether a Change of Control
has occurred. As used in this definition of Change of Control (a)
"Beneficially Own" means "beneficially own" as defined in Rule 13d-3
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or any successor provisions thereto; provided, however, that,
for purposes of this definition, a Person shall not be deemed to
Beneficially Own securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates until such tendered
152
securities are accepted for purchase or exchange; (b) "Group" means a
"group" for purposes of Section 13(d) of the Exchange Act; (c)
"Affiliate" means, with respect to any Person, another Person which
would be an "affiliate" of such Person for purposes of Section 13(d)
of the Exchange Act; (d) "Unrelated Person" means at any time any
Person other than Xxxxxxx, any Person to whom Xxxxxxx or any of its
Affiliates transfers, within nine months prior to such time, any
shares of Allied Common Stock or all or any portion of the Allied
Warrant or any Affiliate of Polaris or any such Person; provided,
however, that Persons (other than Polaris or its Affiliates) to whom
Xxxxxxx or any of its Affiliates transfers any shares of Allied Common
Stock or all or any portion of the Allied Warrant after five years
from the date hereof shall not be deemed Unrelated Persons; and (e)
"Voting Stock" of any Person shall mean capital stock of such Person
which 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.
"Credit Facility" means the Credit Agreement dated as of
___________, 199_ among Allied U.S., as borrower, Allied, Xxxxxxx
Sachs Credit Partners L.P., as syndication agent, Citibank, N.A., as
documentation agent, Credit Suisse, as administrative agent, Xxxxxxx
Sachs Credit Partners L.P., Citicorp USA, Inc. and Credit Suisse, as
initial lenders, and the other financial institutions now or hereafter
parties thereto (as the same may be renewed, amended, modified,
increased, extended, refinanced, or otherwise supplemented from time
to time).
"Debenture" means this Zero Coupon Junior Subordinated
Debenture due 200_.
"Default" is defined in Section 6.
"Default Rate" means an annual interest rate equal to 9% per
annum.
"Designated Senior Indebtedness" means (i) the Senior
Indebtedness incurred with respect to the Credit Facility, (ii) the
Senior Indebtedness evidenced by the Senior Subordinated Debentures
and (iii) any other Senior Indebtedness which is incurred pursuant to
an agreement (or series of related agreements simultaneously entered
into) providing for Indebtedness, or commitments to lend, of at least
$10,000,000 at the time of determination and is specifically
designated in the instrument evidencing such Senior Indebtedness or
the agreement under which such Senior Indebtedness arises as
"Designated Senior Indebtedness."
"$" means U.S. dollars, the lawful currency of the United
States of America.
"Financing Lease" means any lease of property, real or
personal, the obligations of the lessee in respect of which are
required in accordance with generally accepted accounting principles
to be capitalized on a balance sheet of the lessee.
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"Governmental Entity" means any U.S. or Canadian, territorial,
federal, state, provincial or local court, executive office,
legislature, governmental agency, department, ministry, commission, or
administrative, regulatory or self-regulatory authority or
instrumentality.
"Guarantee" means with respect to any Person any obligation,
contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of such Person, direct or indirect, (a)
to purchase or pay (or advance or supply funds for the purchase or
payment of ) such Indebtedness or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or
services for the purpose of assuring the owner of such Indebtedness of
the payment of such Indebtedness or (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; provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course
of business.
"Indebtedness" means with respect to any Person at any date,
(a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond,
debenture, letter of credit or similar instrument, (c) all obligations
of such Persons with respect to Guarantees, (d) all obligations of
such Person under Financing Leases, (e) all obligations of such Person
in respect of acceptances issued or created for the account of such
Person (other than endorsements in the ordinary course of business),
(f) all obligations in respect of interest rate swaps or other
interest rate hedging products or foreign currency exchange agreements
or exchange rate hedging arrangements, (g) all obligations in respect
of reimbursement obligations under letters of credit, and (h) all
liabilities of the type referred to in clauses (a) through (g) above
that are secured by any lien, charge, security interest or encumbrance
on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof.
"Indenture" means the Indenture dated _____________, 199__,
between Allied U.S. and the Trustee pursuant to which the Senior
Subordinated Debentures are issued.
"Xxxxxxx" means Xxxxxxx Inc., a Canadian corporation.
"LTI" means Xxxxxxx Transportation, Inc., a Delaware
corporation.
"Maturity Date" _________________, 200__ [12 years after the
date hereof].
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"Offset Letter Agreement" means the letter agreement dated the
date hereof among Allied, Allied Finance, Xxxxxxx and LTI, in
substantially the form of Exhibit N to the Stock Purchase Agreement.
"Person" means an individual, corporation, partnership,
association, joint stock company, limited liability company,
Governmental Entity, business trust, unincorporated organization, or
other legal entity.
"Representative" means at any date, with respect to the Credit
Facility, the Person or Persons then acting as the administrative
agent under the Credit Facility, with respect to the Senior
Subordinated Debentures, the Trustee, and with respect to any other
Designated Senior Indebtedness, the holders of such Designated Senior
Indebtedness or any Person acting as agent of such holders at such
date.
"Section 8 Prepayment Date" is defined in Section 8(b) of this
Debenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means principal of, and premium, if any,
and interest on (including interest that, but for the filing of a
petition initiating any proceeding pursuant to any Bankruptcy or
Insolvency Proceeding, would accrue on such obligations at the rate
provided in the agreements or instruments creating or evidencing the
respective obligations, whether or not such claim is allowed or
allowable in such Bankruptcy or Insolvency Proceeding) and all other
amounts of every kind or nature (including, but not limited to, fees,
indemnities and expenses) due on or in connection with, any
Indebtedness of Allied Finance, whether outstanding on the date of
this Debenture or thereafter created, incurred, assumed or Guaranteed
by Allied Finance (including all renewals, extensions or refundings
of, or amendments, modifications or supplements to, the foregoing)
unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be
senior in right of payment to this Debenture. Without limiting the
generality of the foregoing, "Senior Indebtedness" shall include (a)
all obligations and liabilities of every kind and nature (including,
but not limited to, fees, expenses and indemnities) under the Credit
Facility or the Senior Subordinated Indebtedness, (b) all obligations
and liabilities of every kind and nature (including, but not limited
to, fees, expenses and indemnities) in respect of any interest rate
swaps or other interest rate hedging product entered into in
connection with Indebtedness incurred or to be incurred pursuant to
the Credit Facility, and (c) any renewal, extension, refinancing or
rearrangement of any indebtedness incurred or to be incurred pursuant
to the Credit Facility or the Senior Subordinated Indebtedness.
Notwithstanding the foregoing, Senior Indebtedness shall not include
(i) amounts owed (except to banks, insurance companies and other
financing institutions and except for obligations under Financing
Leases) for goods, materials, services or operating lease rental
payments in the ordinary course of business or for compensation to
employees of Allied Finance, (ii) any liability for federal, state,
provincial, local or other taxes owed or owing by Allied Finance and
(iii) Indebtedness with respect to Allied Finance's 7% Junior
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Subordinated Debentures due 200_ dated the date hereof and the
Guaranty thereof by the Guarantor.
"Senior Subordinated Debentures" means the ___% Senior
Subordinated Debentures due 200__(3) in the aggregate original
principal amount of at least $475,000,000 issued by Allied U.S.
pursuant to the Indenture.
"Stock Purchase Agreement" means the Stock Purchase Agreement
dated as of September 17, 1996, among Allied, Allied Finance, Xxxxxxx
and certain other parties named therein.
"Subordinated Obligations" is defined in Subsection 4(a).
"Subscription Agreement" means the Subscription Agreement,
dated the date hereof among Allied, Allied Finance, Xxxxxxx and LTI.
"Subsidiary" of a Person means an Affiliate of that Person
more than 50% of the aggregate voting power (or of any other form of
voting equity interest in the case of a Person that is not a
corporation) of which is beneficially owned by that Person directly or
indirectly through one or more other Subsidiaries.
"Trustee" means ________________________________, a national
banking association, in its capacity as trustee under the Indenture,
and its successors in such capacity.
(b) Capitalized terms defined in this Debenture are equally
applicable to both their singular and plural forms. References to a
designated "Section" or "Subsections" refer to a Section or Subsection of this
Debenture, unless otherwise specifically indicated. In this Debenture,
"including" is used only to indicate examples, without limitation to the
indicated examples, and without limiting any generality which precedes it.
2. Interest; Default Rate. From (and including) the date of this
Debenture through (and including) the Maturity Date, no interest shall accrue
or be payable with respect to this Debenture. All past due principal of this
Debenture shall accrue interest at the Default Rate from (but not including)
the Maturity Date through (but not including) the date of payment. From and
after the Maturity Date, interest will be calculated on the basis of the actual
number of days elapsed over a year composed of 365 days (or 366 days, as the
case may be).
3. Payment Terms. Subject to Section 4:
(a) The outstanding principal balance of this Debenture
and all accrued and unpaid interest thereon shall be due and payable
on the Maturity Date.
----------------------------------
(3) The due date of the Senior Subordinated Debentures will be 10 years
after the date of issuance.
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(b) No interest is payable with respect to the principal
amount of this Debenture prior to the Maturity Date. After the
Maturity Date, interest will be payable in arrears on the ________ day
of each ___________ and ____________ of each year on the principal
balance of this Debenture outstanding from time to time.(4)
(c) Each payment or prepayment hereunder shall be made by
wire transfer to an account located in Canada designated by Xxxxxxx.
(d) Any payment or action that is due hereunder on a day
which is not a Business Day shall be deferred until the next
succeeding Business Day (but interest shall continue to accrue on any
applicable payment until such payment is made).
(e) Pursuant to Article II of the Subscription Agreement, LTI
has agreed to subscribe for shares of Allied Common Stock from time to
time. Reference is made to the Subscription Agreement for a complete
statement of the terms and conditions pursuant to which such shares
are to be issued.
4. Subordination.
(a) The indebtedness evidenced by, and all obligations in
respect of, this Debenture (including the obligations under Section 8)
and the payment of principal of, premium and interest, if any, on and
all other obligations in respect of, this Debenture (collectively, the
"Subordinated Obligations") are expressly subordinate to all Senior
Indebtedness to the extent and in the manner set forth herein. For
purposes hereof, the term "subordinate" means that, unless and until
the Senior Indebtedness has been indefeasibly paid in full in cash,
Xxxxxxx will not have the right under any circumstances to, and will
not, take, demand, commence any suit or any other proceeding for
collection, pursue any other judicial or non-judicial remedy or
receive from Allied Finance or any of its Subsidiaries or Affiliates,
and Allied Finance will not and will not permit any of its
Subsidiaries or Affiliates to, make, give, or permit, directly or
indirectly, by set-off, redemption, purchase or in any other manner,
any payment of or on account of the Subordinated Obligations;
provided, however, that at any time, except during a Blockage Period,
Allied Finance shall make, and Xxxxxxx may receive, and Xxxxxxx may
commence any suit or other proceeding for collection of, scheduled
payments of principal or interest on this Debenture in accordance with
the terms hereof and, provided, further, that at any time, except
during a Blockage Period, Allied Finance may prepay this Debenture so
long as such prepayment would not cause the occurrence of a Blockage
Period. Upon the termination of any Blockage Period, the right of
Xxxxxxx to receive payments shall be reinstated, and Allied Finance
shall resume making such payments to Xxxxxxx in accordance with the
terms hereof. In no event shall Allied Finance be obligated to make,
and Allied Finance shall not make, and shall not permit any of its
Subsidiaries or Affiliates to make, directly or indirectly, by
set-off, redemption, purchase or in any other manner, any payments or
prepayments of,
----------------------------------
(4) Interest will be payable each six months after the Maturity Date.
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or on account of, any of the Subordinated Obligations during any
Blockage Period or if such payment or prepayment would cause the
occurrence of a Blockage Period.
(b) Upon any payment or distribution of any kind or
character to creditors of Allied Finance (whether in cash, property or
securities) in (x) a total or partial liquidation, winding up or
dissolution of Allied Finance (whether voluntarily or involuntarily)
or (y) in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding (including a proceeding under the Canadian
Companies' Creditors Arrangement Act) relating to Allied Finance or
its property, or in an assignment for the benefit of creditors or any
marshaling of Allied Finance's assets and liabilities (any of the
foregoing in clauses (x) and (y) being referred to herein as a
"Bankruptcy or Insolvency Proceeding"), the holders of Senior
Indebtedness will be entitled to receive payment in full in cash of
all the principal of and interest on and other amounts payable in
respect of such Senior Indebtedness (including interest accruing after
the commencement of any such proceeding at the rate specified in the
agreements or instruments creating or evidencing the applicable
Senior Indebtedness and whether or not such interest is an allowed or
allowable claim under applicable law) before Xxxxxxx will be entitled
to receive any payment with respect to this Debenture (whether in
cash, property or securities); and until all obligations with respect
to Senior Indebtedness are paid in full in cash, any distribution
received by Xxxxxxx or to which Xxxxxxx would be entitled shall be
paid over or made to the holders of Senior Indebtedness. Upon the
occurrence of any Bankruptcy or Insolvency Proceeding relating to
Allied Finance, the holders of the Senior Indebtedness are authorized
and empowered to (i) demand, xxx for, collect and receive every
payment or distribution on account of the Subordinated Obligations
payable or deliverable in connection with such event or proceeding and
give acquittance therefor, and (ii) file claims and proofs of claim in
any statutory or non-statutory proceeding and take such other actions
as may be necessary or desirable for the enforcement of the
subordination provisions of this Debenture. Promptly after taking any
action provided in clauses (i) or (ii) above, Allied Finance shall
give written notice thereof to the holder of this Debenture; provided,
however that failure to give such notice shall in no event affect the
validity of any action so taken.
(c) In the event that, notwithstanding the occurrence of
any of the events described in Subsections 4(a) and (b), any such
payment or distribution of assets of Allied Finance of any kind or
character, whether in cash, property or securities, shall be received
by the holder of this Debenture which is not permitted hereby such
payment or distribution shall be held in trust for the ratable benefit
of, and shall be paid over or delivered to, the holders of the Senior
Indebtedness.
(d) The holders of the Senior Indebtedness shall have no
duty or obligation to the holder of this Debenture in any manner
whatsoever and may, at any time and from time to time, in their sole
discretion, without the consent of or notice to the holder of this
Debenture and without impairing or releasing any rights of the holders
of the Senior Indebtedness or any of the obligations of the holder of
this Debenture hereunder, take any or all of the following actions:
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(i) change the amount, manner, place, terms of
payment or interest rate, change or extend the time of payment
of, or renew or alter, any of the Senior Indebtedness, or
amend or supplement or waive any of the terms of any
instrument or agreement now or hereafter executed pursuant to
which any of the Senior Indebtedness is issued or incurred;
(ii) sell, exchange, release, surrender, relend,
realize upon or otherwise deal with in any manner and in any
order, any property (or the income, revenues, profits or
proceeds therefrom) by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, any Senior
Indebtedness;
(iii) release any person liable in any manner for
the payment or collection of the Senior Indebtedness;
(iv) exercise or refrain from exercising any
rights and remedies against Allied Finance or others, or
otherwise act or refrain from acting or, for any reason, fail
to file, record or otherwise perfect any security interest in
or lien on any property of Allied Finance or any other Person;
and
(v) apply any sums received by the holders of the
Senior Indebtedness, by whomsoever paid and however realized,
to payment of the Senior Indebtedness in such manner as the
holders of the Senior Indebtedness, in their sole discretion,
may deem appropriate.
(e) Xxxxxxx and any future holder of this Debenture, by
acceptance of this Debenture, agree to provide to any holder of Senior
Indebtedness, at any time and from time to time, upon the written
request of Allied Finance or such holder of Senior Indebtedness, an
agreement signed by Xxxxxxx or such future holder of this Debenture
addressed to the holder of such Senior Indebtedness in substantially
the form of, and on substantially the terms set out in, Exhibit A
attached hereto to the effect that such Person is a holder of Senior
Indebtedness, that the holder or holders of such Senior Indebtedness
are entitled to the benefits of Sections 4, 5 and 12 of this Debenture
and that the holder or holders of such Senior Indebtedness may enforce
the terms and provisions thereof to the same extent Allied Finance
would be able to do so, provided, however, that prior to furnishing
such agreement, Xxxxxxx has received from Allied Finance or such
holder such information as Xxxxxxx may reasonably request
demonstrating to Xxxxxxx' reasonable satisfaction that such Person is
a holder of Senior Indebtedness. Xxxxxxx, and each subsequent holder
of this Debenture, by acceptance of this Debenture, irrevocably
appoint Allied Finance (with full power of substitution) as its agent
and attorney in fact (which appointment is coupled with an interest
and shall be irrevocable so long as any Senior Indebtedness is
outstanding) to execute and deliver on behalf and in the name of
Xxxxxxx or such holder, as the case may be, an agreement in
substantially the form of, and on substantially the terms set out in,
Exhibit A hereto in favor of each such holder of Senior Indebtedness
and to take such further action as may be necessary or appropriate to
effectuate the subordination as provided herein. Promptly after
exercise of any such power, Allied Finance will give written
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notice thereof to the holders of the Debenture; provided, however,
that failure to give such notice shall in no event affect the validity
of any power so exercised.
(f) If a Default shall have occurred and be continuing
(other than a Default pursuant to Section 6(b) or (c)) and the holder
of this Debenture elects to accelerate this Debenture pursuant to
Section 7, Xxxxxxx shall give the Representative under the Credit
Facility 30 days' prior written notice before accelerating this
Debenture, which notice shall state that it is a "Notice of Intent to
Accelerate;" provided, however, that Xxxxxxx shall not be required to
give such notice if at such time payment of any Indebtedness incurred
pursuant to the Credit Facility shall have been accelerated. If
payment of this Debenture is accelerated because of a Default, the
holder shall promptly notify the Representatives under the Designated
Senior Indebtedness and the holders of all other Senior Indebtedness
of the acceleration.
(g) Until all Senior Indebtedness has been indefeasibly
paid in full in cash, the holders of this Debenture shall not be
entitled to assert, enforce or otherwise exercise any right of
subrogation against Allied Finance or any other Person obligated on
the Subordinated Obligations. After all Senior Indebtedness has been
indefeasibly paid in full in cash, and until the Subordinated
Obligations have been so paid in full, the holder of this Debenture
shall be subrogated to the rights of holders of Senior Indebtedness to
receive distributions applicable to Senior Indebtedness. A
distribution made under this Section 4 to holders of Senior
Indebtedness which otherwise would have been made to the holder of
this Debenture is not, as between Allied Finance and the holder of
this Debenture, a payment by Allied Finance on Senior Indebtedness.
(h) This Section 4 defines the relative rights of the
holder of this Debenture and holders of Senior Indebtedness. Nothing
in this Debenture shall:
(i) impair, as between Allied Finance and the
holder of this Debenture, the obligation of Allied Finance,
which is absolute and unconditional, to pay principal of and
premium and interest, if any, on this Debenture in accordance
with its terms; or
(ii) except as otherwise set forth in this Section
4, prevent the holder of this Debenture from exercising its
available remedies upon a Default, subject to the rights of
holders of Senior Indebtedness to receive distributions
otherwise payable to such holder.
5. No Impairment. Section 4, this Section 5, the proviso to
Section 7(a), and Section 12 (and all defined terms used in such sections)
shall constitute a continuing offer to all Persons who become holders of, or
continue to hold, Senior Indebtedness, and such provisions are made for the
benefit of the holders from time to time of Senior Indebtedness, and such
Persons are conclusively presumed to have relied upon such provisions; and such
holders are made obligees hereunder, and they or each of them may enforce such
provisions. No right of any present or future holder of any Senior
Indebtedness to enforce the subordination or other provisions referred to in
this Section 5 shall at any time in any way be
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prejudiced or impaired by any act or failure to act on the part of Allied
Finance or Xxxxxxx, or by any non-compliance by Allied Finance or Xxxxxxx with
the terms, provisions and covenants of this Debenture, regardless of any
knowledge thereof any such holder may have or otherwise be charged with.
Section 4, this Section 5 and the subordination and other provisions referred
to in this Section 5 may not be amended or modified in any manner which might
terminate or impair the subordination or such other provisions except with the
prior written consent of the Representatives of all the Designated Senior
Indebtedness.
6. Events of Default. "Default" means the occurrence of one or
more of the following:
(a) Payment. Allied Finance fails to pay the outstanding
principal amount of this Debenture on the Maturity Date.
(b) Voluntary Bankruptcy. Allied Finance (i) files a
petition initiating a voluntary Bankruptcy or Insolvency Proceeding,
(ii) seeks, consents to, or does not contest the appointment of a
receiver or trustee for itself or for all or any substantial part of
its property, (iii) is voluntarily adjudicated a bankrupt or
insolvent, (iv) makes a general assignment for the benefit of its
creditors, or (v) admits in writing its inability to pay its debts as
they mature.
(c) Involuntary Bankruptcy. A petition is filed against
Allied Finance seeking to initiate a Bankruptcy or Insolvency
Proceeding and such petition is not dismissed within 180 days after
being filed, or a court of competent jurisdiction enters an order,
judgment or decree appointing a receiver or trustee for Allied
Finance, or for all or substantially all of its property, and such
order, judgment or decree is not discharged or stayed within 180 days
after its entry.
(d) Acceleration of Other Indebtedness. An event of
default occurs and is continuing under the Credit Facility and, as a
result thereof, the Indebtedness outstanding pursuant to the Credit
Facility is accelerated; provided, however, that in the event the
holders of such Indebtedness elect to waive such event of default or
to otherwise de-accelerate such Indebtedness, no Default shall subsist
hereunder.
7. Remedies of Xxxxxxx. Upon the occurrence and during the
continuance of a Default, Xxxxxxx shall have the following rights:
(a) Acceleration. Subject to the provisions of Section 4
hereof, Xxxxxxx may, at its option, declare the entire principal
balance of this Debenture, together with the accrued and unpaid
interest thereon, immediately due and payable without notice of
Default, notice of intent to accelerate, notice of acceleration, or
any other notice, presentment, protest, demand or action of any kind
or nature whatsoever (each of which is hereby expressly waived by
Allied Finance), whereupon the entire Indebtedness under this
Debenture shall become immediately due and payable; provided, however,
that no such acceleration (except for an acceleration upon the
occurrence of a Default specified in Subsection 7(d)) shall be
effective or of any force whatsoever and the holder of this
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Debenture may not take any action against Allied Finance with respect
to a Default hereunder if made during a Blockage Period, or if such
acceleration would result in a Blockage Period; provided, further,
that in the event the Indebtedness under this Debenture is accelerated
upon the occurrence of a Default specified in Subsection 7(d) and the
holders of the Indebtedness outstanding pursuant to the Credit
Facility elect to waive the event of default giving rise to the
acceleration thereunder or otherwise elect to de-accelerate such
Indebtedness, Xxxxxxx shall de-accelerate the obligations hereunder.
(b) Other Rights. Except as otherwise modified hereby,
Xxxxxxx shall have all rights and remedies available at law or equity
and the same (i) shall be cumulative and concurrent, (ii) may be
pursued separately, successively, or concurrently against Allied
Finance, (iii) may be exercised as often as occasion therefor shall
arise, it being agreed by Allied Finance that the exercise or failure
to exercise any of the same shall in no event be construed as a waiver
or release thereof or of any other right or remedy, and (iv) are
intended to be, and shall be, nonexclusive.
8. Offer of Prepayment upon Change of Control.
(a) Allied Finance will, within thirty business days
after any executive officer of Allied Finance has knowledge of the
occurrence of a Change of Control, give written notice of such Change
of Control to the holder of this Debenture. Subject to the provisions
of Section 5, such notice shall contain and constitute an offer to
prepay this Debenture as described in subsection (b) of this Section
8.
(b) The offer to prepay this Debenture contemplated by
subsection (a) of this Section 8 shall be an offer to prepay, in
accordance with and subject to this Section 8, all, but not less than
all, of this Debenture on a date specified in such offer (the "Section
8 Prepayment Date") which date shall be not less than 45 days and not
more than 60 days after the date of such offer (if the Section 8
Prepayment Date shall not be specified in such offer, the Section 8
Prepayment Date shall be the first business day after the 45th day
after the date of such offer).
(c) The holder of this Debenture may accept the offer to
prepay made pursuant to this Section 8 in whole but not in part by
causing a notice of such acceptance to be delivered to Allied Finance
within ten business days after receipt of the written notice to be
given pursuant to subsection (a) of this Section 8. A failure by a
holder of this Debenture to respond within such time period to an
offer to prepay made pursuant to this Section 8 shall be deemed to
constitute a rejection of such offer.
(d) Prepayment of this Debenture pursuant to this Section
8 shall be at the Accreted Value of the Debenture at the Section 8
Prepayment Date. The prepayment shall be made on the Section 8
Prepayment Date.
(e) Notwithstanding any provision hereof to the contrary,
in no event shall Allied Finance prepay (or be obligated to prepay)
this Debenture pursuant to this
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Section 8 until 91 days after Allied Finance shall have prepaid the
Senior Indebtedness incurred pursuant to the Credit Facility and the
Senior Subordinated Debentures, and all other Senior Indebtedness
which is entitled to be prepaid upon the occurrence of a Change of
Control, unless the holder or holders of such Senior Indebtedness have
waived or otherwise failed to enforce their rights to receive a
prepayment of the Senior Indebtedness held by them to which they are
entitled in connection with such Change of Control.
9. Captions. The captions, headings, and arrangements used in
this Debenture are for convenience only and do not affect or modify the terms
of this Debenture.
10. Notices. All notices or other communications which are
required or may be given under this Debenture shall be in writing and shall be
deemed to have been duly given when delivered in person or transmitted by
telecopier (with receipt confirmed) at the address or telecopy number set forth
below (as any such address or telecopier number may be changed from time to
time by notice similarly given):
(1) if to Xxxxxxx, to:
Xxxxxxx Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(2) if to Allied Finance, to:
3294854 Canada Inc.
c/o Allied Finance, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
11. Applicable Law. This Debenture shall be governed by and
construed in accordance with the laws of the State of Delaware and the laws of
the United States of America applicable therein (without reference to the
conflicts of law principles thereof).
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12. Transfer Restriction. This Debenture may not be sold,
assigned, transferred, pledged or hypothecated in any manner, directly or
indirectly, by Xxxxxxx or any other holder, unless the assignee, transferee,
pledgee or hypothecate has agreed in writing to be bound by the provisions of
this Debenture applicable to Xxxxxxx, including but not limited to the
provisions of Section 4(e) and Section 13 hereof. Any transfer of this
Debenture shall be of the entire Debenture and not of any part of the
indebtedness evidenced hereby or of at least $75,000,000 of the principal
amount thereof.
13. OFFSET. THE OBLIGATIONS OF ALLIED FINANCE HEREUNDER ARE, IN
ALL RESPECTS, SUBJECT TO OFFSET AS MORE FULLY SET FORTH IN THE OFFSET LETTER
AGREEMENT. THE OFFSET RIGHTS SET FORTH IN THE OFFSET LETTER AGREEMENT SHALL BE
EFFECTIVE NOTWITHSTANDING THE ASSIGNMENT OR TRANSFER OF THIS DEBENTURE BY
XXXXXXX AND ANY TRANSFEREE SHALL TAKE THIS DEBENTURE SUBJECT TO THE TERMS
THEREOF.
NOTICE: THE RIGHTS AND OBLIGATIONS OF ALLIED FINANCE AND XXXXXXX
SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS,
AND ANY PRIOR ORAL AGREEMENTS BETWEEN ALLIED FINANCE AND XXXXXXX ARE SUPERSEDED
BY AND MERGED INTO SUCH WRITINGS. THIS DEBENTURE (AS AMENDED IN WRITING FROM
TIME TO TIME) REPRESENTS THE FINAL AGREEMENT BETWEEN ALLIED FINANCE AND XXXXXXX
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR OR CONTEMPORANEOUS ORAL
AGREEMENTS BY ALLIED FINANCE AND XXXXXXX. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN ALLIED FINANCE AND XXXXXXX.
3294854 CANADA INC.
a Canadian corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Agreed and Accepted:
XXXXXXX INC.
a Canadian corporation
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
164
EXHIBIT A
to the Zero Coupon Junior Subordinated
Debenture Due 200__ Issued by
3294854 Canada Inc.
in favor of Xxxxxxx Inc.
[Date]
----------------
----------------
----------------
Gentlemen:
Reference is made to the Zero Coupon Junior Subordinated Debenture Due
200__ dated __________, 199__ (the "Subordinated Debenture"), in the original
principal amount of $________________ issued by 3294862 Canada Inc., a Canadian
corporation ("Allied Finance"), in favor of Xxxxxxx Inc., a Canadian
corporation, and the [describe Senior Indebtedness] (the "Subject
Indebtedness"), being issued contemporaneously herewith by Allied Finance in
favor of [identity of holder or holders of Subject Indebtedness] (whether one
or more, the "Senior Creditor"). Hereinafter, capitalized words and phrases
used herein which are defined in the Subordinated Debenture are used herein as
therein defined.
The undersigned (the "Subordinated Creditor") hereby represents and
warrants to the Senior Creditor that (a) the Subordinated Creditor is the owner
and holder of the Subordinated Debenture and that the Subordinated Creditor is
entitled to make the agreements herein contained. The Subordinated Creditor
hereby acknowledges and agrees that the principal of, and premium, if any, and
interest on (including interest that, but for the filing of a petition
initiating any Bankruptcy or Insolvency Proceeding would accrue on such
obligations at the rate provided in the agreements or instruments creating or
evidencing the respective obligations, whether or not such Bankruptcy or
Insolvency Proceeding and all other amounts of every kind or nature (including,
but not limited to, fees, indemnities and expenses and any interest rate swaps
or other interest rate hedging products entered into in connection with the
Subject Indebtedness) due on or in connection with, the Subject Indebtedness,
whether outstanding on the date hereof or hereafter created, incurred or
assumed, guaranteed or in effect guaranteed by Allied Finance (including all
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing) are in all respects Senior Indebtedness, (b) the
Senior Creditor (and any other Person who from time to time is a holder of the
Subject Indebtedness) is entitled to the benefits of Sections 4, 5 and 12 of
the Subordinated Debenture, and (c) the Senior Creditor (and any other Person
who from time to time is a holder of the Subject Indebtedness) may enforce the
terms and provisions of the Subordinated Debenture to the same extent that
Allied Finance or any other holder of Senior Indebtedness would be able to do
so.
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The Subordinated Creditor hereby agrees that the Subordinated
Debenture will not be sold, assigned, transferred, pledged or hypothecated in
any manner, directly or indirectly, by the Subordinated Creditor, unless the
assignee, transferee, pledgee or hypothecate has agreed in writing to be bound
by the provisions of this agreement.
The Subordinated Creditor has executed this agreement in the space
provided below in order to induce the Senior Creditor to advance funds or
extend credit to Allied Finance, and this agreement is intended by the
Subordinated Creditor to be a binding and enforceable undertaking by the
Subordinated Creditor in favor of the Senior Creditor.
The rights created hereby of the Senior Creditor and of any subsequent
holder of the Senior Indebtedness will be assigned automatically, and without
any further act, by the Senior Creditor or such holder upon any sale,
assignment, conveyance or other transfer of all or any part of the Senior
Indebtedness to the extent of the interest sold, assigned, conveyed or
otherwise transferred, unless and to the extent the Senior Creditor or such
holder expressly provides otherwise in the instrument pursuant to which such
interest is conveyed.
Very truly yours,
[NAME OF SUBORDINATED CREDITOR]
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Accepted and agreed to as of
the date first above written:
[NAME OF SENIOR CREDITOR]
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
166
EXHIBIT C
THE SECURITIES REPRESENTED BY THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED (OR QUALIFIED BY PROSPECTUS)
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY PROVINCE OF CANADA. THIS WARRANT
AND THE SHARES OF COMMON STOCK ISSUABLE ON EXERCISE OF THIS WARRANT MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF REGISTRATION (OR QUALIFICATION BY PROSPECTUS) THEREUNDER OTHER
THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND PROSPECTUS
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 SUCH REGISTRATION AND PROSPECTUS REQUIREMENTS UNDER THOSE LAWS.
No. ___________ __________________, 1996
WARRANT
to Purchase Common Stock of
ALLIED WASTE INDUSTRIES, INC.
Expiring on _____________, 2008
This Common Stock Purchase Warrant (the "Warrant") certifies that for
value received and subject to the terms hereof, Xxxxxxx (as hereinafter
defined) is entitled to subscribe for and purchase from Allied (as hereinafter
defined), in whole or in part, 20,400,000 shares of Common Stock (as
hereinafter defined) at the Exercise Price (as hereinafter defined), subject to
and upon the terms and conditions hereinafter set forth. The number of shares
of Common Stock purchasable hereunder, and the Exercise Price therefor are
subject to adjustment as hereinafter set forth. This Warrant and all rights
hereunder shall expire at 5:00 p.m., Scottsdale, Arizona time, on __________,
2008 (the "Expiration Date").
167
ARTICLE I
Definitions
As used herein, the following terms shall have the meanings set forth
below:
1.1 "Affiliate"means, with respect to any Person, another Person
which would be an "affiliate" of such Person for purposes of Section 13(d) of
the Exchange Act or Section 197(f)(9)(c) of the United States Internal Revenue
Code of 1986, as amended, respectively.
1.2 "Allied" shall mean Allied Waste Industries, Inc., a Delaware
corporation, and any successor by merger, consolidation or otherwise.
1.3 "Change of Control" means a change resulting when any
Unrelated Person or any Unrelated Persons acting together that would constitute
a Group together with any Affiliates thereof (in each case also constituting
Unrelated Persons) shall at any time beneficially own more than 50% of the
aggregate voting power of all classes of Voting Stock of Allied; provided,
however, that if at the date any "Change of Control" would otherwise have
occurred but for the fact that a Person was not an Unrelated Person because
such Person or an Affiliate of such Person acquired shares of Allied Common
Stock or all or any portion of the Allied Warrant from Xxxxxxx or from any
Affiliate of Xxxxxxx within nine months prior to such date, such shares of
Allied Common Stock acquired from Xxxxxxx or any Affiliate of Xxxxxxx, or any
shares of Allied Common Stock issued upon exercise of the Allied Warrant or any
portion thereof, shall at all times thereafter be excluded when calculating
whether a Change of Control has occurred. As used in this definition of Change
of Control (a) "Group" means a "group" for purposes of Section 13(d) of the
Exchange Act; (b) "Unrelated Person" means at any time any Person other than
Xxxxxxx, any Person to whom Xxxxxxx or any of its Affiliates transfers, within
nine months prior to such time, any shares of Allied Common Stock or all or any
portion of the Allied Warrant or any Affiliate of Xxxxxxx or any such Person;
provided, however, that Persons (other than Xxxxxxx or its Affiliates) to whom
Xxxxxxx or any of its Affiliates transfers any shares of Allied Common Stock or
all or any portion of the Allied Warrant after five years from the date hereof
shall not be deemed Unrelated Persons; and (c) "Voting Stock" of any Person
shall mean capital stock of such Person which 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.
1.4 As used herein, "beneficially own" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act, provided that, for purposes of this
definition, a Person shall not be deemed to beneficially own securities
tendered pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates until such tendered securities are
accepted for purchase or exchange.
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1.5 "Common Stock" shall mean and include the Common Stock of
Allied, par value $.01 per share, authorized on the date of the original issue
of this Warrant and shall also include (i) in case of any reorganization,
reclassification, consolidation, merger, share exchange or sale, transfer or
other disposition of assets, the stock or other securities provided for herein,
and (ii) any other shares of common stock of Allied into which such shares of
Common Stock may be converted.
1.6 "Current Market Price" per share of Common Stock on any
specified date means the average daily market prices (determined as set forth
below in this definition), of the Common Stock for the 20 consecutive Trading
Days ending on the third Trading Day before that date. The market price for
each such Trading Day shall be the average of the last sale prices on such
Trading Day on all stock exchanges and the Nasdaq Stock Market on which the
Common Stock may then be listed or admitted for quotation, respectively;
provided, that if no sale takes place on any such Trading Day on any such
exchange or the Nasdaq Stock Market, the average of the closing bid and asked
prices on such day as officially quoted thereon shall be used, or, if Common
Stock is not then listed or admitted for quotation on any stock exchange or the
Nasdaq Stock Market, the market price for each Trading Day shall be the average
of the reported bid and asked prices on such day on the over-the-counter
market, or, if Common Stock is not quoted on the over-the-counter market, the
market price for each Trading Day shall be the average of the bid and asked
prices furnished by any member of the National Association of Securities
Dealers selected by Allied.
1.7 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
1.8 "Exercise Price" shall mean $8.25, as adjusted from time to
time pursuant to the provisions hereof.
1.9 "Outstanding," when used with reference to Common Stock, shall
mean (except as otherwise expressly provided herein) at any date as of which
the number of shares thereof is to be determined, all issued and outstanding
shares of Common Stock, except shares then beneficially owned or held by or for
the account of Allied and its direct or indirect wholly-owned subsidiaries.
1.10 "Person" means an individual, corporation, partnership,
association, joint stock company, limited liability company, governmental
entity, business trust, unincorporated organization, or other legal entity.
1.11 "Xxxxxxx" shall mean Xxxxxxx Inc., a Canadian corporation.
1.12 "Securities Act" means the United States Securities Act of
1933, as amended.
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169
1.13 "Trading Day" shall mean any days during the course of which
the principal securities exchange or the Nasdaq National Market, as the case
may be, on which the Common Stock is listed or admitted to trading is open for
the exchange of securities.
1.14 "Warrant Shares" shall mean the shares of Common Stock
purchased or purchasable upon the exercise of the Warrant by the holder
entitled to exercise the Warrant.
ARTICLE II
Exercise of Warrant
2.1 Method of Exercise. The Warrant may be exercised in whole or
in part by (i) Xxxxxxx and its Affiliates only after the occurrence of a Change
of Control of Allied, or (ii) by any holder hereof other than Xxxxxxx and its
Affiliates, at any time and from time to time on or after the date hereof,
until 5:00 p.m., Scottsdale, Arizona time on the Expiration Date. To exercise
the Warrant, the holder hereof shall deliver to Allied, at the Warrant Office
designated herein, (i) a written notice substantially in the form of the
Subscription Notice attached as an exhibit hereto, stating therein the election
of the holder hereof to exercise the Warrant in the manner provided in the
Subscription Notice; (ii) payment in full of the Exercise Price, by certified
check or by wire transfer of immediately available funds for all Warrant Shares
purchased hereunder; and (iii) the Warrant. The Warrant shall be deemed to be
exercised on the date of receipt by Allied of the Subscription Notice,
accompanied by payment for the Warrant Shares and surrender of the Warrant (the
"Exercise Date"). Upon such exercise, Allied shall, as promptly as practicable
and in any event within five business days, issue and deliver to the holder
hereof a certificate or certificates for the full number of the Warrant Shares
purchased by the holder hereof, and shall, unless the Warrant has expired,
deliver to the holder hereof a new Warrant representing the portion of the
Warrant, if any, that shall not have been exercised, in all other respects
identical to the Warrant. The holder hereof shall be deemed to have become a
holder of record of such Common Stock on the Exercise Date and shall be
entitled to all of the benefits of such holder on the Exercise Date, including
without limitation the right to receive dividends and other distributions for
which the record date falls on or after the Exercise Date and to exercise
voting rights.
2.2 Expenses and Taxes. Allied shall pay all expenses and taxes
(including, without limitation, all documentary, stamp, transfer or other
transactional taxes) other than income taxes attributable to the issuance or
exercise of the Warrant and to the issuance, possession or disposition of the
Warrant Shares.
2.3 Reservation of Shares. Allied shall reserve at all times so
long as the Warrant remains outstanding, free from preemptive rights, out of
its authorized but unissued shares of Common Stock, solely for the purpose of
effecting the exercise of the Warrant, a sufficient number of shares of Common
Stock to provide for the exercise of the Warrant, as adjusted pursuant to
Article IV hereof.
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2.4 Valid Issuance. All Warrant Shares will, upon issuance by
Allied, be duly and validly issued, fully paid and nonassessable.
2.5 Other Agreements. Xxxxxxx, Allied and certain other parties
have entered into a Stock Purchase Agreement (the "Purchase Agreement") dated
September __, 1996. Xxxxxxx, Allied and certain parties named therein have
also entered into a Stock Registration Agreement (the "Registration Agreement")
dated September __, 1996. The Warrant is the warrant to purchase Common Stock
issued to Xxxxxxx pursuant to the Purchase Agreement. Xxxxxxx, or any
transferee of rights to registration under the Registration Agreement, shall be
entitled to the rights to registration under the Securities Act and any
applicable state securities or blue sky laws to the extent set forth in the
Registration Agreement. The terms of the Purchase Agreement and Registration
Agreement are incorporated herein for all purposes and shall be considered a
part of the Warrant as if they had been fully set forth herein; provided, that
the rights to registration in the Registration Agreement shall be transferable
only as provided for therein. Notwithstanding the previous sentence, in the
event of any conflict between the provisions of the Purchase Agreement or the
Registration Agreement and of the Warrant, the provisions of the Warrant shall
control.
2.6 No Fractional Shares. Allied shall not be required to issue
fractional shares of Common Stock on the exercise of the Warrant. If a portion
of the Warrant shall be presented for exercise, the number of full shares of
Common Stock which shall be issuable upon such exercise shall be computed on
the basis of the aggregate number of whole shares of Common Stock purchasable
on exercise of the portion of the Warrant so presented. If any fraction of a
share of Common Stock would, except for the provisions of this Section, be
issuable on the exercise of the Warrant, Allied shall pay an amount in cash
calculated by it to be equal to the Current Market Price of one share of Common
Stock at the time of such exercise multiplied by such fraction computed to the
nearest whole cent.
ARTICLE III
Transfer
3.1 Restrictions on Transfer of the Warrant. The Warrant may be
sold, assigned or transferred to any Person other than Xxxxxxx and its
Affiliates (except that this Warrant may be transferred to a wholly owned
subsidiary of Xxxxxxx) and may also be sold, assigned or transferred pursuant
to the exercise by the holder hereof of rights, if any, to register and sell
the Warrant pursuant to the Registration Agreement; provided, that no sale,
assignment or transfer of this Warrant will be permitted if the transferee of
this Warrant and its Affiliates, collectively, shall beneficially own after
said sale, assignment or transfer, more than 9% of the total number of shares
of Common Stock then outstanding, unless such transferee receives such Warrants
pursuant to a pro-rata distribution of Warrants to all stockholders of all
classes of Xxxxxxx'x outstanding capital stock.
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3.2 Warrant Office. Allied shall maintain an office for certain
purposes specified herein (the "Warrant Office"), which office shall initially
be the Company's offices at 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxx 00000 and may subsequently be such other office of Allied or of any
transfer agent retained by Allied in the continental United States as to which
written notice has previously been given to the holders hereof Allied shall
maintain, at the Warrant Office, a register for the Warrant in which Allied
shall record the name and address of the holders hereof. Upon any public
distribution of the Warrants, Allied shall retain a transfer agent for the
Warrants and the business address of such transfer agent shall be the Warrant
Office from the date of such public distribution.
3.3 Split Up, Combination, Exchange and Transfer of Warrants.
Subject to the provisions of Section 3.1, the Warrants may be split up,
combined or exchanged for other Warrants representing a like aggregate number
of Warrants. Any holder desiring to split up, combine or exchange shall make
such request in writing delivered to the Warrant Office and shall surrender the
Warrants to be so split up, combined or exchanged. Subject to (i) any
applicable laws, rules or regulations of the United States or Canada
restricting transferability, (ii) any restriction on transferability that may
appear on a Warrant in accordance with the terms hereof, or (iii) any
"stop-transfer" instructions Allied may give to the Warrant Office to implement
any such restrictions (which instructions Allied is expressly authorized to
give), transfer of outstanding Warrants may be effected by the Warrant Office
from time to time upon the books of Allied to be maintained by the Warrant
Office for that purpose, upon a surrender of the Warrants to the Warrant Office
with the assignment form set forth in the Warrants duly executed and with
Signatures Guaranteed. Upon any such surrender for split up, combination,
exchange or transfer, the Warrant Office shall execute and deliver to the
person entitled thereto Warrants as so requested. the Warrant Office may
require the holder to pay a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any split up, combination,
exchange or transfer of Warrants prior to the issuance of any new Warrants.
3.4 Cancellation of Warrants. Any Warrants surrendered upon the
exercise of Warrants or for split up, combination, exchange or transfer, or
purchased or otherwise acquired by Allied, shall be cancelled and shall not be
reissued by Allied; and, except as provided (i) in Section 2.1, in case of the
exercise of less than all of the Warrants, or (ii) in Section 3.3, in case of a
split up, combination, exchange or transfer of the Warrants, no Warrants shall
be issued hereunder in lieu of such cancelled Warrants. Any Warrants so
cancelled shall be destroyed by the Warrant Office unless otherwise directed by
Allied.
3.5 Compliance with Securities Laws. Subject to the terms of the
Registration Agreement and notwithstanding any other provisions contained in
the Warrant, the holders hereof understand and agree that the following
restrictions and limitations shall be applicable to all Warrant Shares and to
all resales or other transfers thereof pursuant to the Securities Act or
applicable securities legislation, regulations and rules of the provinces and
territories of Canada:
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3.5.1 The Warrant Shares may not be sold or otherwise
transferred unless the Warrant Shares are registered (or qualified by
prospectus) under the Securities Act and applicable state or provincial or
territorial securities or blue sky laws or are exempt from such requirements.
3.5.2 A legend in substantially the following form will be
placed on the certificate(s) evidencing the Warrant Shares:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
OR QUALIFIED BY PROSPECTUS UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY PROVINCE OR TERRITORY OF CANADA. SUCH SHARES MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH A REGISTRATION (OR QUALIFICATION)
THEREUNDER OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
AND QUALIFICATION REQUIREMENTS AND DELIVERY TO ALLIED WASTE
INDUSTRIES, INC. OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
IT TO THE EFFECT THAT TRANSFER IS EXEMPT FROM REGISTRATION AND
QUALIFICATION REQUIREMENTS UNDER THOSE LAWS."
3.5.3 Stop transfer instructions will be imposed with
respect to the Warrant Shares so as to restrict resale or other transfer
thereof.
ARTICLE IV
Adjustment
4.1 Adjustment. The Exercise Price shall be subject to adjustment
from time to time as provided herein. Upon each adjustment of the Exercise
Price, the holder hereof shall thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of shares of Common
Stock obtained by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment.
4.2 Adjustment of Exercise Price
4.2.1 In case at any time after the date hereof Allied
shall distribute to all holders of Common Stock any rights to subscribe for or
to purchase Common Stock or any options for the purchase of Common Stock or any
stock or securities convertible into or
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exchangeable for Common Stock (such convertible or exchangeable stock or
securities being herein called "Convertible Securities"), whether or not such
rights or options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which
shares of Common Stock are issuable upon the exercise of such rights or options
or upon conversion or exchange of such Convertible Securities (determined by
dividing (i) the total amount, if any, received or receivable by Allied as
consideration for the granting of such rights or options, plus the minimum
aggregate amount of additional consideration, if any, payable to Allied upon
the exercise of such rights or options, or plus, in the case of such rights or
options that relate to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange thereof, by (ii) the
total maximum number of shares of Common Stock issuable upon the exercise of
such rights or options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such rights or options)
shall be less than the Current Market Price in effect as of the date of
granting such rights or options, then the total maximum number of shares of
Common Stock issuable upon the exercise of such rights or options or upon
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such rights or options shall be deemed to be outstanding as of the
date of the granting of such rights or options and to have been issued for such
price per share, and the Exercise Price shall be reduced (but not increased,
except as otherwise specifically provided herein) to the price (calculated to
the nearest one-tenth of a cent) determined by dividing (x) an amount equal to
the sum of (1) the aggregate number of shares of Common Stock outstanding
immediately prior to such issue or sale multiplied by then existing Exercise
Price plus (2) the consideration received by Allied upon such issue or sale by
(y) the aggregate number of shares of Common Stock outstanding immediately
after such issue or sale. Except as provided herein, no further adjustment of
the Exercise Price shall be made upon the actual issuance of such Common Stock
or of such Convertible Securities upon exercise of such rights or options or
upon the actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities.
4.2.2 If: (i) the purchase price provided for in any right
or option distributed to all holders of Common Stock, (ii) the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities distributed to all holders of Common Stock or (iii) the
rate at which any Convertible Securities distributed to all holders of Common
Stock are convertible into or exchangeable for Common Stock shall be decreased
(other than under or by reason of provisions designed to protect against
dilution), the Exercise Price then in effect shall be decreased to the Exercise
Price that would have been in effect had such rights, options or Convertible
Securities provided for such changed purchase price, additional consideration
or conversion rate at the time initially issued.
4.2.3 In case at any time Common Stock or Convertible
Securities or any rights or options to purchase Common Stock or Convertible
Securities shall be issued or sold to all holders of Common Stock for cash, the
total amount of cash consideration shall be deemed to be the amount received by
Allied. If at any time any Common Stock, Convertible Securities
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174
or any rights or options to purchase any such Common Stock or Convertible
Securities shall be issued or sold to all holders of Common Stock for
consideration other than cash, the amount of the consideration other than cash
received by Allied shall be deemed to be the fair market value of such
consideration, as determined reasonably and in good faith by the Board of
Directors of Allied. If at any time any Common Stock, Convertible Securities
or any rights or options to purchase any Common Stock or Convertible Securities
shall be issued to all holders of Common Stock in connection with any merger or
consolidation, the amount of consideration received therefor shall be deemed to
be the fair market value, as determined reasonably and in good faith by the
Board of Directors of Allied, of such portion of the assets and business of the
nonsurviving corporation as such Board of Directors may determine to be
attributable to such Common Stock, Convertible Securities, rights or options as
the case may be. In case at any time any rights or options to purchase any
shares of Common Stock or Convertible Securities shall be issued to all holders
of Common Stock in connection with any issuance and sale of other securities of
Allied, together consisting of one integral transaction in which no
consideration is allocated to such rights or options by the parties, such
rights or options shall be deemed to have been issued without consideration.
4.2.4 In case Allied shall take a record of the holders of
its Common Stock for the purpose of entitling them to subscribe for or purchase
Common Stock or Convertible Securities, then such record date shall be deemed
to be the date of the issuance or sale of the Common Stock or Convertible
Securities deemed to have been issued or sold as a result of the date of the
granting of such right of subscription or purchase, as the case may be.
4.2.5 The number of shares of Common Stock outstanding at
any given time shall not include shares owned directly by Allied in treasury,
and the disposition of any such shares shall be considered an issuance or sale
of Common Stock.
4.2.6 In case Allied shall at any time after the date
hereof (i) declare a dividend on all the outstanding shares of Common Stock
payable in shares of its capital stock, (ii) subdivide the outstanding Common
Stock, (iii) combine the outstanding Common Stock into a smaller number of
shares, or (iv) issue any shares of capital stock by reclassification or
reorganization of the Common Stock (including any such reclassification in
connection with a consolidation or merger), then, in each case, the Exercise
Price in effect, and the number of shares of Common Stock issuable upon
exercise of the Warrants outstanding, at the time of the record date for such
dividend or of the effective date of such subdivision, combination,
reclassification or reorganization, shall be proportionately adjusted so that
the holders of the Warrants after such time shall be entitled to receive the
aggregate number and kind of shares which, if such Warrants had been exercised
immediately prior to such time, such holders would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination, reclassification or reorganization. Such adjustment shall be made
successively whenever any event listed above shall occur.
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4.2.7 In case Allied shall distribute to all holders of
Common Stock (including any such distribution made to the shareholders of
Allied in connection with a consolidation or merger) evidences of its
indebtedness or assets (other than distributions and dividends payable in
shares of Common Stock) then, in such case, the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior to the
record date for the determination of shareholders entitled to receive such
distribution by a fraction, the numerator of which shall be the Current Market
Price per share of Common Stock on such record date, less the fair market value
(as determined in good faith by the Board of Directors of Allied, in its sole
discretion) of the portion of the evidences of indebtedness or assets so to be
distributed, applicable to one share, and the denominator of which shall be
such Current Market Price per share of Common Stock on such record date. Such
adjustment shall become effective at the close of business on such record date.
4.3 Tender Offer. If a purchase, tender or exchange offer (a
"Tender Offer") is made to and accepted by holders of 51 percent or more of the
outstanding shares of Common Stock, Allied shall not effect any consolidation,
merger, share exchange or sale, transfer or other disposition of all or
substantially all of Allied's assets (an "Extraordinary Transaction") with the
Person having made such Tender Offer or with any Affiliate of such Person,
unless prior to the consummation of such Extraordinary Transaction the holder
hereof shall have been given a reasonable opportunity to elect to receive, upon
the exercise of the Warrant, either: (i) the capital stock, securities, assets
or cash then issuable with respect to the Common Stock upon consummation of the
Extraordinary Transaction; or (ii) the capital stock, securities, assets or
cash issued to previous holders of the Common Stock upon acceptance of such
Tender Offer.
4.4 De Minimis Adjustments. No adjustment in the number of shares
of Common Stock purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one share of Common Stock
purchasable upon an exercise of the Warrant and no adjustment in the Exercise
Price shall be required unless such adjustment would require an increase or
decrease of at least $0.10 in the Exercise Price; provided, however, that any
adjustments that are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations shall be made to
the nearest full share or nearest one hundredth of a dollar, as applicable.
4.5 Notifications to Holders. In case at any time Allied
proposes:
(i) to declare any dividend upon its Common Stock payable
in capital stock or make any special dividend or other distribution
(other than cash dividends) to the holders of its Common Stock;
(ii) to offer for subscription pro rata to all of the
holders of its Common Stock any additional shares of capital stock of
any class or other rights;
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(iii) to effect any capital reorganization, or
reclassification of the capital stock of Allied, or consolidation,
merger or share exchange of Allied with another Person, or sale,
transfer or other disposition of all or substantially all of its
assets; or
(iv) to effect a voluntary or involuntary dissolution,
liquidation or winding up of Allied,
then, in any one or more of such cases, Allied shall give the holder hereof (a)
at least 10 days (but not more than 90 days) prior written notice of the date
on which the books of Allied shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to vote
in respect of any such issuance, reorganization, reclassification,
consolidation, merger, share exchange, sale, transfer, disposition,
dissolution, liquidation or winding up, and (b) in the case of any such
issuance, reorganization, reclassification, consolidation, merger, share
exchange, sale, transfer, disposition, dissolution, liquidation or winding up,
at least 10 days (but not more than 90 days) prior written notice of the date
when the same shall take place. Such notice in accordance with the foregoing
clause (a) shall also specify, in the case of any such dividend, distribution
or subscription rights, the date on which the date on which the holders of
Common Stock shall be entitled thereto, and such notice in accordance with the
foregoing clause (b) shall also specify the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock, as the case may be, for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, share exchange, sale, transfer,
disposition, dissolution, liquidation or winding up, as the case may be.
4.6 Notice of Adjustment. Whenever the Exercise Price or the
number of Warrant Shares issuable upon the exercise of the Warrant shall be
adjusted as herein provided, or the rights of the holder hereof shall change by
reason of other events specified herein, Allied shall compute the adjusted
Exercise Price and the adjusted number of Warrant Shares in accordance with the
provisions hereof and shall prepare and mail to the holder hereof a certificate
setting forth the adjusted Exercise Price as of the date of such event and the
adjusted number of Warrant Shares issuable upon the exercise of the Warrant or
specifying the other shares of stock, securities, assets or cash receivable as
a result of such change in rights, and showing in reasonable detail the facts
and calculations upon which such adjustments or other changes are based.
ARTICLE V
Miscellaneous
5.1 Entire Agreement. The Warrant, together with the Purchase
Agreement and the Registration Agreement, contain the entire agreement between
the holder hereof and Allied with respect to the Warrant and the Warrant Shares
purchasable upon exercise hereof and the
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177
related transactions and supersedes all prior arrangements or understandings
with respect thereto.
5.2 Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of Delaware.
5.3 Waiver and Amendment. Any term or provision of the Warrant
may be waived at any time by the party which is entitled to the benefits
thereof and any term or provision of the
Warrant may be amended or supplemented at any time by agreement of the holder
hereof and Allied, except that any waiver of any term or condition, or any
amendment or supplementation, of the Warrant shall be in writing. A waiver of
any breach or failure to enforce any of the terms or conditions of the Warrant
shall not in any way effect, limit or waive a party's rights hereunder at any
time to enforce strict compliance thereafter with every term or condition of
the Warrant.
5.4 Severability. In the event that any one or more of the
provisions contained in this Warrant shall be determined to be invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of the Warrant shall not, at the election of the party for whom the
benefit or the provision exists, be in any way impaired.
5.5 Notice. Any notice or other document required or permitted to
be given or delivered to the holder hereof shall be in writing and delivered
at, or sent by certified or registered mail to the holder hereof at, the last
address shown on the books of Allied maintained at the Warrant Office for the
registration of the Warrant or at any more recent address of which the holder
hereof shall have notified Allied in writing. Any notice or other document
required or permitted to be given or delivered to Allied, other than such
notice or documents required to be delivered to the Warrant Office, shall be
delivered at, or sent by certified or registered mail to, the offices of Allied
at 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000 or such other
address within the continental United States of America as shall have been
furnished by Allied to the holder hereof.
5.6 Limitation of Liability; Not Stockholders. No provision of
the Warrant shall be construed as conferring upon the holder hereof the right
to vote, consent, receive dividends or receive notices (other than as herein
expressly provided) in respect of meetings of stockholders for the election of
directors of Allied or any other matter whatsoever as a stockholder of Allied
prior to exercise of the Warrant. No provision hereof, in the absence of
affirmative action by the holder hereof to purchase shares of Common Stock, and
no mere enumeration herein of the rights or privileges of the holder hereof,
shall give rise to any liability of the holder hereof for the purchase price of
any shares of Common Stock or as a stockholder of Allied, whether such
liability is asserted by Allied or by creditors of Allied.
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5.7 Exchange, Loss, Destruction, etc. of Warrant. Upon receipt of
evidence reasonably satisfactory to Allied of the loss, theft, mutilation or
destruction of the Warrant, and in the case of any such loss, theft or
destruction upon delivery of an appropriate affidavit in such form as shall be
reasonably satisfactory to Allied and include reasonable indemnification of
Allied, or in the event of such mutilation upon surrender and cancellation of
the Warrant, Allied will make and deliver a new Warrant of like tenor, in lieu
of such lost, stolen, destroyed or mutilated Warrant. A Warrant issued under
the provisions of this Section in lieu of a Warrant alleged to be lost,
destroyed or stolen, or in lieu of a mutilated Warrant, shall constitute an
original contractual obligation on the part of Allied. The Warrant shall be
promptly canceled by Allied upon the surrender hereof in connection with any
exchange or replacement. Allied shall pay all taxes (other than securities
transfer taxes or capital gains or income taxes) and all other expenses and
charges payable in connection with the preparation, execution and delivery of a
Warrant pursuant to this Section.
5.8 Specific Performance. Each party hereto agrees that one or
more other parties would be irreparably damaged if any provision of the Warrant
was not performed in accordance with its specific terms or was otherwise
breached. Therefore, the parties hereto agree that each party shall be
entitled to an injunction or injunctions to prevent breaches of the Warrant or
any of their provisions and to specifically enforce the Warrant, its terms and
provisions in any action instituted in any court of the United States or Canada
or any state or province thereof having subject matter jurisdiction, in
addition to any other remedy to which a party may be entitled, at law or in
equity.
5.9 Headings. The Article and Section and other headings herein
are for convenience only and are not a part of this Warrant and shall not
affect the interpretation thereof.
IN WITNESS WHEREOF, Allied has caused this Warrant to be signed in its name.
Dated: _______________, 1996
ALLIED WASTE INDUSTRIES, INC.
------------------------------------
By:
---------------------------------
Title:
------------------------------
RECEIVED AND ACKNOWLEDGED
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XXXXXXX TRANSPORTATION, INC.
---------------------------------------------------
By:
------------------------------------------------
Title:
---------------------------------------------
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FORM OF SUBSCRIPTION NOTICE
The undersigned hereby elects to exercise purchase rights represented
thereby for, and to purchase thereunder, ____________ shares of the Common
Stock covered by Warrants to purchase Common Stock, and herewith makes payment
in full for such shares, and requests (a) that certificates for such shares
(and any other securities or other property issuable upon such exercise) be
issued in the name of, and delivered to, ____________________ and (b), such
shares shall not include all of the shares issuable as provided in such
Warrant, that a new Warrant of like tenor and date for the balance of the
shares issuable thereunder be delivered to the undersigned.
-----------------------------------------
By:
--------------------------------------
Title:
-----------------------------------
Date:
--------------------------------------
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EXHIBIT D
SUBSCRIPTION AGREEMENT
This Subscription Agreement dated _____________, 199_ (this
"Agreement"), is among Allied Waste Industries, Inc., a Delaware corporation
("Allied"), 3294854 Canada, Inc., a Canadian corporation ("Allied Finance"),
Xxxxxxx Inc., a Canadian corporation ("Xxxxxxx"), and Xxxxxxx Transportation,
Inc., a Delaware corporation ("LTI").
W I T N E S S E T H:
WHEREAS, pursuant to the Stock Purchase Agreement dated as of September
17, 1996 (the "Stock Purchase Agreement"), among Allied, Allied Holdings
(United States), Inc., a Delaware corporation and a wholly owned subsidiary of
Allied ("Allied U.S."), and 3294854 Canada, Inc., a Canadian corporation and a
wholly-owned subsidiary of Allied U.S. ("Allied Canada"), all of which are
collectively referred to in this Agreement as the "Allied Parties," and
Xxxxxxx, LTI, Xxxxxxx Waste Systems, Inc., a Delaware corporation and a wholly
owned subsidiary of LTI ("LWSI"), Xxxxxxx Waste Systems (Canada), Ltd., a
Canadian corporation and a wholly owned subsidiary of Xxxxxxx ("LWSC"), and
Xxxxxxx Medical Services Ltd., a Canadian corporation and a wholly owned
subsidiary of Xxxxxxx ("LMS"), Allied, through the acquisition by Allied U.S.
of all of the issued and outstanding capital stock of LWSI and the acquisition
by Allied Canada of all of the issued and outstanding shares in the share
capital of each of LWSC and LMS, has acquired, on the date hereof, all of the
United States and Canadian solid waste management operations of Xxxxxxx;
WHEREAS, as a portion of the consideration for the purchase by Allied
Canada of the LWSC Shares (as such term is defined in the Stock Purchase
Agreement), Allied Canada has issued to Xxxxxxx its 7% Junior Subordinated
Debenture due 200__ dated the date hereof (the "Allied Canada 7% Debenture"),
in the original principal amount of $150,000,000 and its Zero Coupon Junior
Subordinated Debenture due 200__ dated the date hereof (the "Allied Finance
Zero Coupon Debenture" and, together with the Allied Finance 7% Debenture, the
"Allied Canada Debentures"), in the original principal amount of $168,300,000;
WHEREAS, pursuant to the Debenture Exchange Agreement dated the date
hereof between Allied Finance and Xxxxxxx, Allied Finance has issued its 7%
Junior Subordinated Debenture due 200_ dated the date hereof (the "Allied
Finance 7% Debenture"), payable to Xxxxxxx in the original principal amount of
$150,000,000 and its Zero Coupon Junior Subordinated Debenture due 200_ dated
the date hereof (the "Allied Finance Zero Coupon Debenture" and, together with
the Allied Finance 7% Debenture, the "Debentures"), payable to Xxxxxxx in the
original principal amount of $168,300,000, in exchange for the Allied Canada
Debentures;
WHEREAS, pursuant to Section 3(b) of the Allied Finance 7% Debenture,
interest on the outstanding principal balance of the Allied Finance 7%
Debenture will accrue but will be deferred during the Deferral Period (as such
term is defined in the Allied Finance 7% Debenture), and thereafter (i) the
interest deferred during the Deferral Period may, at the option of Allied
Finance, be paid at any time and, if not so paid, such deferred interest,
together with interest thereon atl 7% per annum, will be payable in eighteen
equal (or as nearly equal as possible) installments on the _____ day of each
________ and ________ of each year
182
(beginning ______________, _____), and on the Maturity Date and (ii) interest
accrued after the Deferral Period will be due and payable in arrears on the
last day of each ___________ and ___________ of each year (beginning
_____________, ____), and on the Maturity Date for the period commencing on
(and including) the later of date following the last day of the Deferral Period
or the date to which interest thereon has been paid, as the case may be, and
ending on (but excluding) the date of such payment (each installment of
interest payable as provided in either clause (i) or clause (ii) above being
hereinafter referred to as an "Interest Installment");
WHEREAS, with respect to each Interest Installment, Allied desires to
be able to require LTI to subscribe for shares of Allied Common Stock with a
purchase price equal to the amount of such Interest Installment;
WHEREAS, in the event a Change of Control (as hereinafter defined)
occurs and Xxxxxxx elects to require prepayment of the Allied Finance 7%
Debenture pursuant to Section 9 thereof or of the Allied Finance Zero Coupon
Debenture pursuant to Section 8 thereof (a "Change of Control Payment Event"),
Allied desires to be able to require LTI to subscribe for shares of Allied
Common Stock with a purchase price equal to the amount payable to Xxxxxxx (the
"Change of Control Proceeds") as a result of the Change of Control Payment
Event;
NOW, THEREFORE, Allied, Allied Finance, Xxxxxxx and LTI (collectively,
the "Parties") agree that:
ARTICLE I
DEFINITIONS
1.1 Definitions. The terms defined in the preamble and the recitals
of this Agreement are used herein as therein defined. The following terms have
the meaning indicated below:
"Allied Common Stock" means the Common Stock, $.01 par value per
share, of Allied.
"Change of Control" means a change resulting when any Unrelated
Person or any Unrelated Persons acting together that would constitute a
Group together with any Affiliates thereof (in each case also
constituting Unrelated Persons) shall at any time Beneficially Own more
than 50% of the aggregate voting power of all classes of Voting Stock of
Allied; provided, however, that if at the date any "Change of Control"
would otherwise have occurred but for the fact that a Person was not an
Unrelated Person because such Person or an Affiliate of such Person
acquired shares of Allied Common Stock or all or any portion of the
Allied Warrant from Xxxxxxx or from any Affiliate of Xxxxxxx within nine
months prior to such date, such shares of Allied Common Stock acquired
from Xxxxxxx or any Affiliate of Xxxxxxx, or any shares of Allied Common
Stock issued upon exercise of the Allied Warrant or any portion thereof,
shall at all times thereafter be excluded when calculating whether a
Change of Control has occurred. As used in this definition of Change in
Control (a) "Beneficially Own" means "beneficially own" as defined in
Rule 13d-3 of the Securities Exchange Act of 1934,
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as amended (the "Exchange Act"), or any successor provisions thereto;
provided, however, that, for purposes of this definition, a Person shall
not be deemed to Beneficially Own securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates until such tendered securities are accepted for
purchase or exchange; (b) "Group" means a "group" for purposes of
Section 13(d) of the Exchange Act; (c) "Affiliate" means, with respect
to any Person, another Person which would be an "affiliate" of such
Person for purposes of Section 13(d) of the Exchange Act; (d) "Unrelated
Person" means at any time any Person other than Xxxxxxx, any Person to
whom Xxxxxxx or any of its Affiliates transfers, within nine months
prior to such time, any shares of Allied Common Stock or all or any
portion of the Allied Warrant or any Affiliate of Xxxxxxx or any such
Person; provided, however, that Persons (other than Affiliates of
Xxxxxxx) to whom Xxxxxxx or any of its Affiliates transfers any shares
of Allied Common Stock or all or any portion of the Allied Warrant after
five years from the date hereof shall not be deemed Unrelated Persons;
and (e) "Voting Stock" of any Person shall mean capital stock of such
Person which 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.
"Change of Control Payment Date" means (i) with respect to a
Change of Control Payment Event with respect to the Allied Finance 7%
Debenture, the Section 9 Prepayment Date (as such term is defined in
Subsection 9(b) of the Allied Finance 7% Debenture) and (ii) with
respect to a Change of Control Payment Event with respect to the Allied
Finance Zero Coupon Debenture, the Section 8 Prepayment Date (as such
term is defined in Subsection 8(b) of the Allied Finance Zero Coupon
Debenture).
"Current Market Price" per share of Allied Common Stock on any
specified date means the average daily market prices (determined as set
forth below in this definition), of the Allied Common Stock for the 20
consecutive Trading Days ending on the third Trading Day before that
date. The market price for each such Trading Day shall be the average
of the last sale prices on such Trading Day on all stock exchanges and
the Nasdaq Stock Market on which the Allied Common Stock may then be
listed or admitted for quotation, respectively; provided, that if no
sale takes place on any such Trading Day on any such exchange or the
Nasdaq Stock Market, the average of the closing bid and asked prices on
such day as officially quoted thereon shall be used, or, if Allied
Common Stock is not then listed or admitted for quotation on any stock
exchange or the Nasdaq Stock Market, the market price for each Trading
Day shall be the average of the reported bid and asked prices on such
day on the over-the-counter market, or, if Allied Common Stock is not
quoted on the over-the-counter market, the market price for each Trading
Day shall be the average of the bid and asked prices furnished by any
member of the National Association of Securities Dealers selected by
Allied.
"Interest Due Date" is defined in Section 2.1.
"Interest Installment" is defined in the premises of this
Agreement.
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"Maturity Date" means ____________________ __, 200_ [12 years
after the date hereof].
"Section 2.1 Subscription Obligation" is defined in Section 2.1.
"Section 2.1 Subscription Shares" is defined in Section 2.1.
"Section 2.2 Subscription Obligation" is defined in Section 2.2.
"Section 2.2 Subscription Shares" is defined in Section 2.2.
"Subscription Notice" means the written notice in substantially
the form of Exhibit A attached hereto to be given pursuant to Section
2.3.
"Subscription Shares" means, collectively, the Section 2.1
Subscription Shares and the Section 2.2 Subscription Shares.
ARTICLE II
SUBSCRIPTION FOR SHARES
2.1 Interest Payment Subscriptions. At the date (the "Interest Due
Date") each Interest Installment is due and payable pursuant to the Allied
Finance 7% Debenture, LTI agrees, upon receipt of a Subscription Notice and
upon the other terms and subject to the conditions herein contained, to
subscribe (the "Section 2.1 Subscription Obligation") for a number of shares
(the "Section 2.1 Subscription Shares"), rounded up to the nearest whole
number, of the Allied Common Stock equal to the product obtained by dividing
the amount of such Interest Installment by the Current Market Price of the
Allied Common Stock as of such Interest Due Date for an aggregate purchase
price equal to the amount of such Interest Installment.
2.2 Change of Control Subscription. If a Change of Control Payment
Event occurs, LTI hereby agrees, upon receipt of a Subscription Notice and upon
the other terms and subject to the conditions herein contained, to subscribe
(the "Section 2.2 Subscription Obligation") for a number of shares (the
"Section 2.2 Subscription Shares"), rounded up to the nearest whole number, of
Allied Common Stock equal to the product obtained by dividing the amount of the
Change of Control Proceeds applicable to such Change of Control Event by the
Current Market Price of the Allied Common Stock as of the Change of Control
Payment Date for an aggregate purchase price equal to the amount of the Change
of Control Proceeds.
2.3 Method of Subscription. If Allied elects at any time to cause
LTI to subscribe for Section 2.1 Subscription Shares or Section 2.2
Subscription Shares pursuant to this Agreement, Allied shall deliver to LTI, at
the office designated in Section 3.1(a), a written notice signed by Allied in
substantially the form of the Subscription Notice attached hereto as Exhibit A.
Upon receipt by LTI of each duly executed Subscription Notice, LTI will be
deemed to have subscribed for the number of Subscription Shares covered by the
Subscription Notice. Upon each such subscription for Section 2.1 Subscription
Shares, Allied shall issue
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and deliver to LTI, at the address set forth in Section 3.1(a), on the relevant
Interest Due Date a certificate for said Section 2.1 Subscription Shares. Upon
delivery of such certificate, the obligation of Allied Finance to pay the
Interest Installment due on such Interest Due Date to Xxxxxxx shall be
automatically in all respects satisfied and discharged as provided in Section
2.5. Upon each subscription for Section 2.2 Subscription Shares, Allied shall
issue and deliver to LTI, at the address set forth in Section 3.1(a), on the
Change of Control Payment Date a certificate for said Section 2.2 Subscription
Shares, and Xxxxxxx and LTI shall deliver to Allied the Debenture or Debentures
as to which a Change of Control Event has occurred marked "Cancelled." Upon
delivery of such certificate, the obligation of Allied Finance to pay the
Change of Control Proceeds to Xxxxxxx shall be in all respects satisfied and
discharged. If, as a result of any merger, consolidation, reclassification or
reorganization, the shares of Allied Common Stock have been converted into
another security, shares of such other security may be delivered hereunder in
lieu of shares of Allied Common Stock. If shares of the Allied Common Stock
have not been converted into another security and such shares have no value or
if no shares of Allied Common Stock are available for issuance, nothing herein
contained will relieve Allied Finance of its obligation to pay Interest
Installments and amounts payable upon a change of Control, to the extent and in
the manner set forth in the Debentures.
2.4 Rights in Subscription Shares. LTI shall be deemed to have
become a holder of record of the Subscription Shares, and shall be entitled to
all of the benefits thereof, on the relevant Interest Due Date or Change of
Control Payment Date, as the case may be, including without limitation the
right to receive dividends and other distributions for which the record date
falls on or after such date and to exercise voting rights with respect to
Subscription Shares as of such date.
2.5 Acknowledgments by Xxxxxxx. Xxxxxxx hereby irrevocably
authorizes and directs Allied Finance to apply and pay to Allied all Interest
Installments and the Change of Control Proceeds in respect of which a
Subscription Notice has been given in satisfaction of LTI's obligations
hereunder to pay the purchase price for the Subscription Shares to be issued by
Allied to LTI in accordance herewith. Xxxxxxx hereby further acknowledges and
agrees to the provisions herein contained, and agrees that the application and
payment of funds by Allied Finance as herein set forth on account of the
issuance of Subscription Shares to LTI as described in Section 2.3 will satisfy
and discharge the obligation of Allied Finance to pay Interest Installments
otherwise due under the Allied Finance 7% Debenture or to pay the Change of
Control Proceeds to Xxxxxxx upon the occurrence of a Change of Control Event.
ARTICLE III
MISCELLANEOUS
3.1 Notices. All notices or other communications which are required
or may be given under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person or transmitted by telecopier
(with receipt confirmed) to a party at the address or telecopy number, as
applicable, set forth below (as any such address or telecopier number may be
changed from time to time by notice similarly given):
(a) if to Xxxxxxx or LTI to:
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Xxxxxxx Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(b) if to Allied or Allied Finance, to:
Allied Waste Industries, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
3.2 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.
3.3 Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the law of Delaware.
3.4 Amendments. This Agreement may be amended only by an instrument
in writing executed by all of the Parties.
3.5 Entire Agreement. This Agreement constitutes the entire
agreement among the Parties concerning its subject matter.
3.6 Assignment. The rights and obligations hereunder of any Party
may not be assigned without written consent of each of the other Parties;
provided, however, that in the event of a permitted assignment of either of the
Debentures, the rights and obligations of Xxxxxxx and LTI hereunder shall be
assigned to the assignee of such Debentures to the extent of such assignment.
3.7 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.
3.8 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.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
ALLIED WASTE INDUSTRIES, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
3294854 CANADA, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
XXXXXXX INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
XXXXXXX TRANSPORTATION, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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EXHIBIT A
to Subscription Agreement
FORM OF SUBSCRIPTION NOTICE
Xxxxxxx Transportation, Inc.
c/x Xxxxxxx Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxx
Gentlemen:
The undersigned hereby elects to exercise its option to require you,
pursuant to Article II of the Subscription Agreement dated __________, 199_
(the "Subscription Agreement"), among Allied Waste Industries, Inc., 3294854
Canada, Inc., Xxxxxxx Inc. and Xxxxxxx Transportation, Inc., to subscribe for
the number of shares of Allied Common Stock (the "Subscription Shares")
determined pursuant to Section [2.1] [2.2] of the Subscription Agreement for an
aggregate purchase price equal to the amount of the [Interest Installment due
on _____________, ______, pursuant to the Allied Finance 7% Debenture] [Change
of Control Proceeds] (as defined in the Subscription Agreement).
Upon your receipt of this notice, you will be deemed to have subscribed
to the Subscription Shares and the undersigned shall issue and deliver to you a
certificate or certificates for the Subscription Shares as more fully set forth
in Section 2.3 of the Subscription Agreement.
Allied Waste Industries, Inc.
Date: By:
---------------------- -------------------------------
Title:
----------------------------
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EXHIBIT E
STOCK REGISTRATION AGREEMENT
This Stock Registration Agreement dated _____________, 199__ (this
"Registration Agreement"), is among Allied Waste Industries, Inc., a Delaware
corporation ("Allied"), Xxxxxxx Inc., a Canadian corporation ("Xxxxxxx"), and
Xxxxxxx Transportation, Inc., a Delaware corporation ("LTI"), both of which are
together referred to in this Registration Agreement as the "Xxxxxxx Parties."
W I T N E S S E T H:
WHEREAS, under a Stock Purchase Agreement dated as of September 17, 1996
(the "Stock Purchase Agreement"), among Allied, the Xxxxxxx Parties and others,
Allied is this date issuing to the Xxxxxxx Parties (i) 14,600,000 shares (the
"Initial Common Shares") of Common Stock, $.01 par value per share ("Common
Stock"), of Allied, (ii) the Warrants (the "Warrants") for the purchase of
20,400,000 shares of Common Stock (subject to adjustment as provided in the
Warrants), a Zero Coupon Subordinated Debenture which may be redeemed using
Common Stock in certain events (the "Zero Coupon Debenture"), and a 7%
Subordinated Debenture which provides for the payment of interest at Allied's
option using shares of Common Stock and may be redeemed using Common Stock in
certain events (the "7% Debenture"); and
WHEREAS, the Stock Purchase Agreement requires that this Registration
Agreement be entered into among Allied and the Xxxxxxx Parties upon the
issuance to the Xxxxxxx Parties of such securities of Allied.
NOW, THEREFORE, Allied and the Xxxxxxx Parties (collectively, the
"Parties") agree that:
ARTICLE I
DEFINITIONS
1.1. Definitions. In this Registration Agreement:
"Canadian Securities Acts" means the applicable securities legislation
of each of the provinces and territories of Canada, and the regulations, rules
and policies made thereunder or issued by the Commissions administering such
legislation, as the same may hereafter be amended or replaced.
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"Commissions" means the securities commissions or similar regulatory
authorities of each of the provinces and territories of Canada and any
successor regulatory authorities having similar powers.
"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.
"Offering Expenses" means all expenses incidental to Allied's
performance of or compliance with its obligations under Section 2.2 in
connection with the qualification by prospectus of Registrable Securities under
any of the Canadian Securities Acts, including, without limitation, all filing
fees, all fees and expenses of complying with the applicable Canadian
Securities Acts, all printing and translation expenses, all fees and
disbursements of counsel to any Xxxxxxx Party and all fees and disbursements of
counsel to Allied and its auditors, including the expenses of any special
audits required by or incidental to such performance and compliance, and any
underwriting fees and commissions and applicable transfer taxes, if any,
relating to the distribution of the Registrable Securities.
"Registrable Securities" means (i) the Initial Common Shares, (ii) the
Warrant to purchase 20,400,000 shares of Common Stock issued by Allied to
Xxxxxxx (the "Allied Warrant") and any shares of Common Stock issued upon any
exercise or exercises of the Allied Warrant (the "Allied Warrant Shares"),
(iii) any shares of Common Stock issued pursuant to the Xxxxxxx Subscription
Agreement entered into by Allied and the Xxxxxxx Parties of even date herewith,
and (iv) any shares of Common Stock issued in connection with any stock
dividend on, or any stock split, reclassification or reorganization of, shares
of Common Stock referenced in subparagraphs (i), (ii) and (iii) above.
"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.
ARTICLE II
REGISTRATION RIGHTS
2.1. Incidental Rights. If at any time or from time to time Allied
proposes to file (i) with the SEC a registration statement (whether on Form
X-0, X-0, or S-3, or any equivalent form then in effect) for the registration
under the Securities Act of any shares of Common Stock for sale, or (ii) file a
prospectus under any of the
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Canadian Securities Acts in order to qualify a distribution under any of the
Canadian Securities Acts of any securities, for cash consideration, to the
public by Allied or on behalf of one or more shareholders of Allied (excluding
any sale of securities convertible into or exercisable for Common Stock, and
any shares of Common Stock issuable by Allied upon the exercise of employee
stock options, or to any employee stock ownership plan, or in connection with
any acquisition made by Allied, any securities exchange offer, dividend
reinvestment plan, employee benefit plan, corporate reorganization, or in
connection with any amalgamation, the merger or consolidation of Allied with
one or more other corporations if Allied is the surviving corporation), Allied
shall give the Xxxxxxx Parties 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 U.S. and Canadian jurisdictions in which
Allied proposes to qualify and offer such securities (the "Elected
Jurisdictions"). On the written request of a Xxxxxxx Party received by Allied
within 15 days after the date of Allied's delivery to the Xxxxxxx Parties of
the notice of intended registration (which request shall specify the
Registrable Securities sought to be disposed of by each Xxxxxxx Party and the
intended method or methods by which dispositions are intended to be made),
Allied shall, under the terms and subject to the conditions of this Article II,
(i) at its own expense as provided in Section 4.1, include in the coverage of
such U.S. registration statement (or in a separate U.S. registration statement
concurrently filed) and qualify for sale under the blue sky or securities laws
of the various states, and (ii) at the expense of the requesting Xxxxxxx
Parties as provided in section 4.2, use its best efforts to effect the
qualification of under the Canadian Securities Acts, in the Elected
Jurisdictions the number of Registrable Securities (herein called the
"Specified Securities") held by such Xxxxxxx Party, or which such Xxxxxxx Party
is entitled to purchase upon exercise of Warrant, and which such Xxxxxxx Party
has so requested to be registered or qualified for distribution, to the extent
requisite to permit the distribution (in accordance with the intended method or
methods thereof as aforesaid) in the Elected Jurisdictions requested by such
Xxxxxxx Party of such Registrable Securities.
If the distribution proposed to be effected by Allied 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 the Xxxxxxx Party 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 the
requesting Xxxxxxx Party shall have the right to include in such
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registration statement or to have qualified by such prospectus shall be reduced
to the maximum number of shares specified by the managing underwriter. In all
cases, priority shall be afforded to securities covered by a registration
statement and/or qualified for distribution by a prospectus filed in response
to the exercise of a demand registration or qualification right by another
holder of Common Stock and no securities proposed to be sold by such other
holder shall be so reduced until all securities proposed to be sold by all
other parties have been entirely eliminated. As to all other proposed selling
shareholders of Common Stock, including the Xxxxxxx Party requesting to include
Registrable Securities in the coverage of such a registration statement or
prospectus, any such reduction in the number of shares of Common Stock 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 shares of Common Stock
proposed to be sold by each selling shareholder bears to the number of shares
of Common Stock proposed to be sold by all selling shareholders. Until the
first anniversary of the date of this Registration Agreement, the Xxxxxxx
Parties agree that they will not exercise registration rights under this
Section 2.1 regarding any registration statement filed on behalf of TPG
Partners, L.P. or TPG Parallel I, L.P. by Allied pursuant to the Securities
Purchase Agreement by and between Allied and TPG dated October 27, 1994.
Allied shall have the sole right to select any underwriters, including
the managing underwriter, of any public offering of shares of Common Stock
subject to this Section 2.1. Nothing in this Section 2.1 shall create any
liability on the part of Allied to a Xxxxxxx Party if Allied for any reason
decides not to file or to delay or withdraw a registration statement or
preliminary prospectus or (final) prospectus (which Allied may do in its sole
discretion).
Each Xxxxxxx Party may request to have Common Stock included in an
unlimited number of registrations, and qualified by an unlimited number of
prospectuses, under this Section 2.1.
2.2. Mandatory Rights. Upon written request of a Xxxxxxx Party made
at any time after six months following the date of this Registration Agreement,
Allied shall, under the terms and subject to the conditions set forth in this
Section 2.2 and Sections 2.4 and 2.5, (i) file (and use its reasonable efforts
to cause to become effective) a U.S. registration statement covering, and use
its reasonable efforts to qualify for sale under the blue sky or securities
laws of the various U.S. states as may be requested by such Xxxxxxx Party
(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), and (ii) use its reasonable efforts to effect
the qualification for distribution under the Canadian Securities Acts, in
accordance with the intended method or methods of disposition set forth in that
notice, of such number of Registrable Securities, but not less than five
million
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shares, as may be designated by such Xxxxxxx Party in its request, or that
portion thereof designated in said request for registration or qualification 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 United States and Canadian jurisdiction in which such
registration or qualification 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 either a distribution of Registrable Shares to the public where no
single buyer, acting individually or with others, acquires more than 10% of
such offering, or a distribution by way of dividend or other distribution to
holders of Common Stock in the capital of Xxxxxxx where such dividend or other
distribution is made pro rata between the holders of all such classes of shares
according to the number of shares of either class held by each of them. The
principal underwriter or underwriters for any such offering shall be selected
by the Xxxxxxx Party requiring registration, subject to Allied's approval,
which may not be unreasonably withheld.
If the distribution proposed to be effected pursuant to this Section 2.2
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 Registrable 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 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, priority shall be afforded to Registrable Securities and the securities
that are not Registrable Securities shall be completely eliminated before the
number of Registrable Securities is reduced.
Allied may delay the filing of any registration statement, or any
preliminary prospectus or (final) prospectus required to effect a qualification
for distribution, requested under this Section 2.2, or delay its effectiveness,
for a reasonable period (but not longer than 120 days) if, in the sole judgment
of Allied's Board of Directors, (i) a delay is necessary in light of pending
financing transactions, corporate reorganizations, or other major events
involving Allied, or (ii) filing at the time requested would materially and
adversely affect the business or prospects of Allied in view of disclosures
that may be thereby required. Once the cause of the delay is eliminated,
Allied shall promptly notify the Xxxxxxx Parties requiring registration or
qualification, and promptly after a Xxxxxxx Party notifies Allied to proceed,
Allied shall, as required in connection with the Designated Jurisdictions
selected by the relevant Xxxxxxx Parties, file a registration statement or a
preliminary prospectus and/or (final) prospectus and begin performance of its
other obligations under this Section 2.2.
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The Xxxxxxx Parties shall be entitled to request not more than five
registrations or qualifications under this Section 2.2 (provided that the
filing of a registration statement and a preliminary prospectus or (final)
prospectus in more than one Designated Jurisdictions in connection with a
concurrent or substantially concurrent distribution shall be deemed for the
purposes hereof to be a single registration and qualification); provided that
the Xxxxxxx Parties will be entitled to one more request under this Section 2.2
if they receive shares of Common Stock in payment of the principal amount of
the Allied Zero Coupon Junior Subordinated Debenture due 200__ and the Allied
7% Junior Subordinated Debenture due 200__; and provided further that only
three of such distributions may be used to register or qualify distributions of
the Warrants. However, if a Xxxxxxx Party requests a registration under this
Section 2.2, but no registration statement or (final) prospectus 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 or qualification the Xxxxxxx Parties may
make under this Section 2.2.
2.3. Registration Conditions. Notwithstanding any other provision of
this Registration Agreement, Allied shall not be required to effect a
registration or qualification of any securities under this Article II, or file
any post-effective amendment to such a registration or a prospectus relating to
such a qualification:
(a) unless the requesting Xxxxxxx Party agrees to (x) sell and
distribute a portion or all of its Registrable Securities in accordance
with the plan or plans of distribution adopted by and through
underwriters, if any, acting for Allied, and (y) bear a pro rata share
of underwriter's discounts and commissions;
(b) if a registration or qualification requested under Section
2.2, or any post-effective amendment to the registration statement
and/or prospectus 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 the
requesting Xxxxxxx Party agrees to pay its proportionate share
(determined by the number of shares to be sold by such Xxxxxxx Party in
the offering in proportion to the total number of shares to be sold by
Allied 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;
(c) if, in the case of a request for registration or
qualification under Section 2.1 or 2.2, in the opinion of counsel for
Allied and counsel for the Xxxxxxx Party requesting the registration or
qualification, as applicable, (i) the Registrable Securities for which
registration under the Securities Act has been
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requested may be disposed of without adversely affecting the market
price of such Registrable Securities within a comparable time frame
without registration under the Securities Act and (ii) upon such
disposition all legends on certificates representing such shares which
restrict their transfer under the Securities Act and applicable state
securities laws may be removed, and the sale by the applicable Xxxxxxx
Party of any Registrable Securities for which qualification for
distribution under any Canadian Securities Acts has been requested (i)
will not constitute a "distribution" (or the corresponding term) under
the applicable Canadian Securities Acts, or (ii) may be effected in the
method requested (or in a method having a substantially similar economic
effect, as to which such counsel may make any reasonable assumption for
the purposes of such opinion) without qualification by prospectus,
provided that the first trade of such Registrable Securities by the
purchaser thereof from the Xxxxxxx Party in such sale would not
constitute a "distribution" (or the corresponding term) under the
applicable Canadian Securities Acts (but for (A) any unusual effort made
to prepare the market or to create a demand for such securities made by
or on behalf of such purchaser, (B) any extraordinary commission or
consideration paid or to be paid in respect of such first trade, or (C)
such purchaser being a person described in clause (C) of the definition
of "distribution" set forth in section l(1) of the Securities Act
(Ontario) in relation to Allied (or any corresponding provision of any
other applicable Canadian Securities Act);
(d) if, in the case of a request for registration under
Section 2.2, (x) any registration statement or prospectus covering
securities regarding which a Xxxxxxx Party could have exercised
registration rights under Section 2.1 of this Registration Agreement has
become effective under the Securities Act or, with respect to a (final)
prospectus, a receipt has been issued therefor under the applicable
Canadian Securities Acts within six months preceding the date of such
request, (y) a registration statement or prospectus requested by a
Xxxxxxx Party pursuant to Section 2.2 has become effective under the
Securities Act or, with respect to a (final) prospectus, a receipt has
been issued therefor under the applicable Canadian Securities Acts
within twelve months preceding the date of such request, or (z) Allied
has given notice under Section 2.1 of its intention to file a
registration statement under the Securities Act or a prospectus under
any Canadian Securities Acts and has not completed or abandoned the
proposed offering; and
(e) unless Allied has received from the Xxxxxxx Party
requesting registration or qualification all information Allied has
reasonably requested concerning such Xxxxxxx Party and its method of
distribution of its Registrable Securities, so as to enable Allied to
include in the registration statement or prospectus all facts required
to be disclosed in it.
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2.4. Covenants and Procedures. If Allied becomes obligated under this
Article II to effect a registration or qualification of Registrable Securities
on behalf of a Xxxxxxx Party requesting registration or qualification under
this Article II (hereinafter called a "Selling Xxxxxxx Party"), then (as
applicable to the jurisdictions for which such registration or qualification is
to be made):
(a) Allied, (i) at its expense as provided in Section 4.1,
shall prepare and file with the SEC a registration statement covering
and, as applicable, (ii) at the expense of the requesting Xxxxxxx
Parties as provided in section 4.2, prepare and file with the applicable
Commissions (in the English and French languages, as applicable) a
preliminary prospectus qualifying, 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 and (with respect to Canadian
jurisdictions) to, after any comments of the Commissions have been
satisfied with respect thereto, prepare and file in accordance with the
relevant Canadian Securities Acts, a (final) prospectus in the English
and French languages, as appropriate, and receive receipts therefor and
shall take all other steps and proceedings that may be necessary in
order to qualify the applicable Registrable Securities for distribution
under such Canadian Securities Acts by registrants who comply with the
relevant provisions of such Canadian Securities Acts. Allied will also
(i) with respect to any U.S. 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, and (ii) with
respect to any Canadian prospectus, file with the Commissions such
amendments and supplements to such preliminary prospectus and (final)
prospectus as may be necessary to comply with the provisions of the
Canadian Securities Acts applicable to the proposed distribution until
the earlier of (A) such time as all of Registrable Securities proposed
to be sold thereunder have been disposed of in accordance with the
intended method or methods of disposition by the seller or sellers
thereof, and (B) the expiration of a period of at least 90 days after
the issuance by the Commissions in all applicable Canadian jurisdictions
for the (final) prospectus or such longer period, not to exceed 180
days, as may be required under the plan or plans of distribution set
forth in such (final) prospectus. Each Selling Xxxxxxx Party shall
promptly provide Allied with such information with respect to such
Selling Xxxxxxx Party's Registrable Securities to be so registered and
qualified and, if applicable, the proposed terms of their offering, as
is required for the registration or qualification. If
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the Registrable Securities to be covered by the registration statement
and/or prospectus are not to be sold to or through underwriters acting
for Allied, Allied shall:
(x) deliver to each Selling Xxxxxxx Party, as promptly
as practicable, as many copies of preliminary prospectuses as
each Selling Xxxxxxx Party may reasonably request (in which case
each Selling Xxxxxxx Party 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,
the applicable Canadian Securities Acts or the securities laws of
any other jurisdiction, including the various states of the
United States);
(y) deliver to each Selling Xxxxxxx Party, as soon as
practicable after the effective date of the U.S. registration
statement, or, as applicable, the date on which all applicable
Commissions shall have issued a receipt for the Canadian (final)
prospectus, and from time to time thereafter during the
applicable period described in paragraph 2.4(a)(i) or (ii), as
many copies of the relevant prospectuses (including any (final)
prospectus as such Selling Xxxxxxx Party may reasonably request;
and
(z) 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 paragraph 2.4(a),
of any event or occurrence as a result of which the prospectus
(including any preliminary prospectus or (final) 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 each
Selling Xxxxxxx Party written notice of the event or occurrence
and prepare and furnish to each Selling Xxxxxxx Party, 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.
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(b) Allied will notify the Xxxxxxx Parties of any action by
the SEC or any Commission to suspend the effectiveness of any
registration statement or prospectus filed pursuant hereto or the
initiation or threatened initiation of any proceeding for such purpose
or the receipt by Allied 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, the Xxxxxxx
Parties 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. Allied will also notify the Xxxxxxx
Parties promptly of the occurrence of any event or the existence of any
state of facts that, in the judgment of Allied, should be set forth in
such registration statement or prospectus. Immediately upon receipt of
such notice, the Xxxxxxx Parties 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 Allied, return to Allied at Allied's
expense all copies of such registration statement or prospectus. Allied
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 the Xxxxxxx Parties.
(c) On or before the date on which the registration statement
is declared effective, or a receipt is issued by all Commissions for the
(final) prospectus, Allied shall use its reasonable efforts to:
(i) register or qualify (and cooperate with each
Selling Xxxxxxx Party, 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 U.S. or Canadian jurisdiction as any
Selling Xxxxxxx Party or underwriter reasonably requests;
(ii) use its reasonable efforts to 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 Common Stock covered by the applicable registration statement
or prospectus, provided that Allied will not be required to
qualify
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generally to do business in any jurisdiction where it is not then
so qualified.
(d) Allied shall use its reasonable efforts to cause all
Registrable Securities of a Selling Xxxxxxx Party included in the
registration statement or qualified by prospectus to be listed, by the
date of the first sale of such shares pursuant to such registration
statement or prospectus, on each securities exchange on which the
securities is then listed or proposed to be listed, if any.
(e) Allied shall make generally available to each Selling
Xxxxxxx Party 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
Allied'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
Allied 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. In addition, in the
event that Allied shall have become a reporting issuer (or have the
corresponding status) under any of the Canadian Securities Acts, Allied
shall comply with the continuous disclosure obligations of a reporting
issuer (or the obligations attendant upon such corresponding status)
prescribed by each Canadian Securities Act under which it has such
status.
(f) Allied shall cooperate with each Selling Xxxxxxx Party 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 or prospectus, and to enable such
securities to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or the Selling Xxxxxxx
Party, may request, subject to the underwriters' obligation to return
any certificates representing unsold securities.
(g) Allied shall use its reasonable efforts to cause
Registrable Securities covered by the registration statement or
prospectus to be registered with or approved by such other governmental
agencies or authorities in the U.S. or Canada (including the
registration of Registrable Securities under the Exchange Act) as may be
necessary to enable the Selling Xxxxxxx Parties or the underwriter or
underwriters, if any, to consummate the disposition of such securities.
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(h) Allied shall, during normal business hours and upon
reasonable notice, make available for inspection by each Selling Xxxxxxx
Party, any underwriter participating in any offering pursuant to the
registration statement or prospectus, and any attorney, accountant or
other agent retained by a Selling Xxxxxxx Party or any such underwriter
(collectively, the "Inspectors"), all nonconfidential financial and
other records, pertinent corporate documents, and properties of Allied,
as shall be reasonably necessary to enable the Inspectors to exercise
their due diligence responsibilities and as they may reasonably consider
to be necessary for the purpose of establishing their due diligence
defense (as applicable) as contemplated by the Canadian Securities Acts
and in order to enable any such underwriters to execute the certificate
on any prospectus required pursuant to any Canadian Securities Acts to
be executed by them. Allied 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) Allied shall use its reasonable efforts to obtain a "cold
comfort" letter and, as applicable, a "long-form comfort letter" from
Allied's independent public accountants, and an opinion of counsel for
Allied, 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 the Selling Xxxxxxx Party reasonably requests, and
consents from all parties from whom such consents would be required
under the applicable Canadian Securities Acts.
(j) Upon any public distribution of Allied Warrants (as
defined in the Purchase Agreement), Allied (i) shall make such changes
to the Allied Warrants as are reasonably necessary to effect such public
distribution and (ii) shall file a U.S. registration statement covering
the continuous offering of the Allied Warrant Shares pursuant to the
Allied Warrants.
ARTICLE III
INDEMNIFICATION
3.1. Indemnification by Allied. In the event of any registration or
qualification under the Securities Act or any Canadian Securities Act by any
registration agreement or prospectus pursuant to rights herein granted of
Registrable Securities held by a Xxxxxxx Party who becomes a Selling Xxxxxxx
Party, Allied will hold harmless such Selling Xxxxxxx Party and each
underwriter of such securities and each other person, if any, who controls such
Selling Xxxxxxx Party or such underwriter within the meaning of the Securities
Act, against any losses, claims,
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damages, or liabilities (including legal fees and costs of court), joint or
several, to which such Selling Xxxxxxx Party or such underwriter or controlling
person may become subject under the Securities Act, the applicable Canadian
Securities Acts 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
contained, on its effective date, in any registration statement under which
such securities were registered under the Securities Act, or in any related
preliminary or (final) prospectus, or in any preliminary prospectus or (final)
prospectus under which such securities were qualified for distribution under
any Canadian 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; and will reimburse such Selling
Xxxxxxx Party 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 Allied shall not be liable to such Selling Xxxxxxx
Party 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, preliminary or (final) prospectus, or such
amendment or supplement, in reliance upon and in conformity with information
furnished to Allied through a written instrument duly executed by such Selling
Xxxxxxx Party or such underwriter specifically for use in the preparation
thereof or results from any improper conduct of such Selling Xxxxxxx Party or
any such underwriter or controlling person.
3.2. Indemnification by Selling Xxxxxxx Parties. It shall be a
condition precedent to the obligation of Allied to include in any registration
statement or to qualify by prospectus any Registrable Securities of a Selling
Xxxxxxx Party that Allied shall have received from such Selling Xxxxxxx Party
an undertaking, reasonably satisfactory to Allied and its counsel, to indemnify
and hold harmless (in the same manner and to the same extent as set forth in
Section 3.1) Allied, each director of Allied, each officer of Allied who shall
sign the registration statement or prospectus, and any person who controls
Allied within the meaning of the Securities Act, (i) with respect to any
statement or omission from such registration statement, any related preliminary
or (final) prospectus, or any amendment or supplement to it, if such statement
or omission was made in reliance upon and in conformity with information
furnished to Allied through a written instrument duly executed by such Selling
Xxxxxxx Party specifically for use in the preparation of such registration
statement, preliminary or (final) prospectus, or amendment or supplement, and
(ii) with respect to compliance by such Selling Xxxxxxx Party with applicable
laws in effecting the sale or other disposition of the securities covered by
such registration statement.
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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 an
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,
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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. Allied and the Xxxxxxx
Parties 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 or the Criminal Code (Canada)) 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. Allied agrees that it will not grant
to any party registration rights which would allow such party to limit
Xxxxxxx'x priority for the sale or distribution of Registrable Securities upon
the exercise of a mandatory registration right pursuant to Section 2.2.
4.2. Expenses. All expenses incurred by Allied in connection with any
U.S. registration statement covering Registrable Securities offered by a
Xxxxxxx
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Party, 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 such Xxxxxxx Party) and
of the independent certified public accountants (except, in the case of any
special audits, if required in connection with any such registration, such
Xxxxxxx Party's 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 Allied; provided, however, that Allied 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 a Xxxxxxx Party (in which case such Xxxxxxx Party shall bear such
expenses), unless the Xxxxxxx Parties agree to forfeit their right to one
demand registration pursuant to Section 2.2; provided further, however, that if
at the time of such withdrawal, such Xxxxxxx Party has learned of a material
adverse change in the condition, business, or prospects of the Allied from that
known at the time of its request, then such Xxxxxxx Party shall not be required
to pay any of such expenses and shall retain its rights pursuant to Section
2.2. Allied's obligations under this Section 4.1 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 such Xxxxxxx
Party, including underwriter's discounts and commissions, shall be borne by
such Xxxxxxx Party.
4.3. Offering Expenses. The Xxxxxxx Party selling any Registrable
Securities pursuant to any prospectus filed with any Commission in connection
with the satisfaction by Allied of its obligations under Section 2.2 shall
reimburse Allied for all Offering Expenses reasonably incurred by or on behalf
of Allied upon receipt by such Xxxxxxx Party of a written request from Allied
in respect of same, together with invoices outlining in reasonable detail the
expenses to be borne by the Xxxxxxx Party or Xxxxxxx Parties. In addition, the
relevant Xxxxxxx Parties shall be responsible for any additional expenses
reasonably incurred by Allied as a result of such Xxxxxxx Parties'
participation in any offering proposed to be completed by Allied in any
Canadian jurisdiction as contemplated in Section 2.1 upon receipt by the
relevant Xxxxxxx Parties of a written request from Allied in respect of the
same, together with appropriate documentation outlining all expenses incurred
by Allied in respect of that distribution and the proportion of the same to be
borne by the relevant Xxxxxxx Parties, together with a brief explanation as to
the reasons why the expenses so charged to the Xxxxxxx Parties would not have
been incurred by Allied in the absence of the participation by the Xxxxxxx
Parties in that distribution.
4.4. Dispositions During Registration. The Xxxxxxx Parties and their
Affiliates hereby agree that from the date of receipt of written notice (the
"Offering Notice") from Allied that Allied intends to file a registration
statement or prospectus (the "Offering Registration Statement") covering shares
of Common Stock or
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securities convertible into or exercisable for Common Stock until the Offering
Termination Date (defined below), the Xxxxxxx Parties and their Affiliates will
not sell or otherwise dispose of any securities owned by such Xxxxxxx Party or
Affiliate except for Registrable Shares included in the Offering Registration
Statement. As used herein, the "Offering Termination Date" shall occur on (i)
the lapse of 60 days from the date of receipt of the Offering Notice if the
Offering Registration Statement is not declared effective (or, if the Offering
Registration Statement is a (final) prospectus to be filed under any Canadian
Securities Act, a receipt is not issued therefor by the applicable Commissions)
before such lapse, (ii) the lapse of 180 days from the date of effectiveness of
the Offering Registration Statement (or, if the Offering Registration Statement
is a (final) prospectus to be filed under any Canadian Securities Act, the date
a receipt has been issued therefor by all applicable Commissions) if any
Registrable Shares are included in the Offering Registration Statement, or
(iii) the lapse of 90 days from the date of effectiveness of the Offering
Registration Statement (or, if the Offering Registration Statement is a (final)
prospectus to be filed under any Canadian Securities Act, the date a receipt
has been issued therefor by all applicable Commissions) if no Registrable
Shares are included in the Offering Registration Statement.
4.5. Transfer of Rights. The incidental registration and
qualification rights or benefits of this Registration Agreement and no more
than one mandatory registration or qualification right, including
indemnification by Allied, shall be transferable by the Xxxxxxx Parties only
(i) in a transaction which is not a public offering or public distribution of
Common Stock or the Allied Warrant; (ii) if the transferee is not an Affiliate
of Xxxxxxx and (iii) if the transferee receives at least an aggregate of
2,000,000 shares of Common Stock or Warrants. In the case of any assignment,
the party or parties who have the rights and benefits of an assigning Xxxxxxx
Party under this Registration Agreement shall become parties to and be subject
to this Registration Agreement, and shall not, as a group, have the right to
request any greater number of registrations or qualifications than the
assigning Xxxxxxx Party would have had if no assignment had occurred. Upon any
transfer of the registration and qualification rights or benefits of this
Registration Agreement, the assigning Xxxxxxx Party shall give Allied 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 and qualification rights are
transferred in accordance with the terms hereof, any actions required to be
taken by the Xxxxxxx Parties will be taken with the approval of the holders of
such registration and qualification rights who hold a majority of the
Registrable Securities, whose actions shall bind all such holders of such
registration and qualification rights.
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4.6. Termination of Registration Rights. The Xxxxxxx Parties and
their permitted assigns shall be entitled to exercise any right provided for in
this Registration Agreement until six months after the twelfth anniversary of
the date of this Registration Agreement.
4.7. Multijurisdictional Disclosure System. Nothing in this
Registration Agreement shall be construed to limit or restrict in any manner
whatsoever the ability of Allied to make use of the Multijurisdictional
Disclosure System (as set forth in National Policy No. 45 of the Canadian
Securities Administrators) with respect to the qualification, distribution or
sale in Canada of any securities of Allied, including pursuant to request made
pursuant to Section 2.1 or Section 2.2 hereof.
ARTICLE V
MISCELLANEOUS
5.1. Notices. All notices or other communications which are required
or may be given under this Registration Agreement shall be in writing and shall
be deemed to have been duly given when delivered in person or transmitted by
telecopier (with receipt confirmed) to a party at the address or telecopy
number, as applicable, set forth below (as any such address or telecopier
number may be changed from time to time by notice similarly given):
(a) if to any Xxxxxxx Party, to:
Xxxxxxx Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
(b) if to Allied, to:
Allied Waste Industries, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
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with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
5.2. Section Headings. The article and section headings in this
Registration Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Registration Agreement. References in this
Registration Agreement to a designated "Article" or "Section" refer to an
Article or Section of this Registration Agreement unless otherwise specifically
indicated.
5.3. Governing Law. This Registration Agreement shall be construed
and enforced in accordance with and governed by the law of Delaware.
5.4. Amendments. This Registration Agreement may be amended only by
an instrument in writing executed by all of its parties.
5.5. Entire Agreement. This Registration Agreement constitutes the
entire agreement between its parties concerning its subject matter.
5.6. Severability. The invalidity or unenforceability of any specific
provision of this Registration Agreement shall not invalidate or render
unenforceable any of its other provisions. Any provision of this Registration
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 Registration Agreement.
5.7. Counterparts. This Registration 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.
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IN WITNESS WHEREOF, the Parties have executed this Registration
Agreement as of the date first above written.
ALLIED WASTE INDUSTRIES, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
XXXXXXX INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
XXXXXXX TRANSPORTATION, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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EXHIBIT F
WASTE SERVICES MANAGEMENT AGREEMENT
This WASTE SERVICES MANAGEMENT AGREEMENT (the "Agreement") is executed
and delivered as of the ___ day of _________, 199_; by and between XXXXXXX
INC., a Canadian corporation ("SELLER"), XXXXXXX ENVIRONMENTAL SERVICES, LTD.,
an Ontario corporation ("LESL"), XXXXXXX ENVIRONMENTAL SERVICES, INC., a
Delaware Corporation ("LESI") and ALLIED WASTE INDUSTRIES, INC., a Delaware
corporation ("COMPANY").
RECITALS:
WHEREAS, Seller operates a Solid Waste (as defined below) collection,
transportation and disposal business (the "Seller's Business") located in the
United States of America and Canada. Capitalized terms used herein and not
otherwise defined shall have the same meanings as set forth in the Purchase
Agreement.
WHEREAS, the Company operates a Solid Waste collection, transportation,
recycling, processing, land farming, storing for transfer, and disposal
business (the "Company's business").
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Company is acquiring all of the assets of Seller used in the
Seller's Solid Waste Business (the "Acquisition") pursuant to a Stock Purchase
Agreement dated September 17, 1996 (the "Purchase Agreement") by and between
Seller and Company.
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WHEREAS, the Company will sustain great loss and damage if, during the
term of this Agreement, for whatever reason, Seller should violate the
provisions of this Agreement.
WHEREAS, the execution and delivery by Seller of this Agreement is a
condition to Company's obligation to consummate the Acquisition and Company is
unwilling to consummate the Acquisition unless Seller executes and delivers
this Agreement.
NOW, THEREFORE, in consideration of the Purchase Agreement, the mutual
promises, terms, covenants and conditions set forth herein and other good and
valuable consideration, received to the full satisfaction of each of them, the
parties hereby agree as follows:
1. Definitions in this Agreement:
HAZARDOUS WASTE: means a waste, or combination of wastes, which
because of its quantity, concentration or physical, chemical or infectious
characteristics which has been identified, by characteristics or listing, as
hazardous pursuant to Section 3001 of the Resource Conservation and Recovery
Act of 1976, as amended ("RCRA").
Potentially infectious medical waste is not a hazardous waste,
except for those potentially infectious medical wastes identified by
characteristics or listing as hazardous under Section 3001 of the RCRA.
SOLID WASTE: means any waste which can be lawfully disposed of
in a landfill regulated under Subtitle D of the RCRA.
2. Seller agrees that for a period of five years following the date
of Closing, it shall not directly or indirectly through a subsidiary without
the prior express written consent of Company:
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(a)(i) engage, whether as a corporation on its own account, or
as a shareholder, owner, partner, joint venture, agent, independent contractor,
consultant or advisor, in the business of operating material recycling
facilities processing curbside waste pickup, or performing residential,
commercial and/or curbside Solid Waste collection, services in the United
States and Canada.
(a)(ii) Neither Seller nor any subsidiary thereof shall acquire
by purchase or otherwise, lease, or enter into an operating agreement to
operate a subtitle D landfill other than as presently owned, leased or operated
by Xxxxxxx Environmental Services as that term is defined under Subtitle D
(RCRA), subject to the provisions of paragraph 4(b) hereof.
(b) solicit or contact in any manner, directly or indirectly,
any person who is, at that time, within the Territory, an employee or the
Seller's business in a managerial capacity, for the purposes or with the intent
of enticing such employee away from or out of the employ of Company or its
subsidiaries;
(c) disclose the identity of the customers of Seller's
business at the date hereof, to any person, firm, partnership, corporation or
other entity whatsoever, for any reason or purpose whatsoever or
(d) promote or assist, financially or otherwise, any person,
firm, partnership, corporation or other entity whatsoever to do any of the
above.
(e) Notwithstanding the foregoing provisions of this Section
2, (1) the parties hereto agree that the foregoing covenant shall not be deemed
to prohibit Seller from acquiring, as an investment, not more than ten percent
of the capital stock of a competing business, the stock of which is traded on a
national securities exchange or over-the- counter; or, provided it
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212
complies with paragraph 4(b); purchase a business which has a solid waste
operation, (2) Seller may continue to do business in the ordinary course as
presently constituted.
3. It is further agreed that LESL and LESI have received good
valuable consideration for entering into this agreement, shall execute this
agreement and remain bound to the covenants and terms hereof. Should Seller
dispose of its interest in LESL and/or LESI to any arm's length third party,
LESL and LESI and their subsidiaries shall remain bound to the covenants and
terms hereof, but such provisions shall not extend to the Purchaser and its
other subsidiaries.
4. (a) Seller agrees that this Agreement is a material and
substantial part of the Acquisition. Consequently, on the date of the
Acquisition, Company shall acknowledge receipt of good and valuable
consideration for the noncompetition covenants contained in this Agreement.
(b) If LESL or LESI acquires a business which has a Solid
Waste operation, within 30 days of closing LESI or LESL shall serve a notice of
the acquisition to the Company and a written offer to sell said Solid Waste
operation at a specified price and terms.
(c) Within 30 days of receipt of the offer to sell from LESL
or LESI, Company will send a notice of its election to purchase the businesses
described in LESL or LESI's offer at the price and terms offered by LESL or
LESI. If Company does not deliver said notice, LESL or LESI may only sell the
Solid Waste business at the offered or greater price and terms. LESL or LESI
shall notify Company in writing of the amount and terms of a subsequent sale to
a third party.
5. Because the Company will sustain great loss and damage as a
result of the breach by Seller of the covenants in this Agreement, and because
of the immediate and irreparable
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damage that would be caused to Company by such a breach for which it would have
no adequate remedy, since monetary damages alone may not be an adequate remedy,
Seller agrees that, in the event of a breach by Seller of the covenants in this
Agreement, such covenants may be enforced by Company by, without limitation,
injunctions and restraining orders.
6. It is agreed by the parties that the covenants in this Agreement
impose a reasonable restraint on Seller in light of the activities and business
of Company and Seller on the date of the execution of this Agreement and the
future plans of Company.
7. The covenants in this Agreement are severable and separate, and
the unenforceability of any specific covenant shall not affect the provisions
of any other covenant. Moreover, in the event any court of competent
jurisdictions determines that the restrictions as set forth are unreasonable,
then it is the intention of the parties that such restrictions be enforced to
the fullest extent which the court deems reasonable, and the Agreement shall
thereby be reformed.
8. The covenants in this Agreements shall each be construed as
independent of any other provision of this Agreement and the Acquisition, and
the existence of any claim or cause of action of Seller against Company,
whether predicated on this Agreement, the Acquisition or otherwise, shall not
constitute a defense to the enforcement by Company of such covenants.
9. This Agreement is the final, complete and exclusive statement and
expression of the agreement among the parties hereto with relation to the
subject matter of this Agreement, it being understood that there are no oral
representations, understandings or agreements covering the same subject matter
and this Agreement. This Agreement supersedes, and cannot be varied,
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214
contradicted or supplemented by evidence of any prior or contemporaneous
discussions, correspondence, or oral or written agreements of any kind.
10. This Agreement, upon execution, shall be binding upon the
parties, enforceable in accordance with its terms and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement may be modified, altered or otherwise amended only by
a written instrument executed by all parties hereto, No right, remedy or
election given by any term of this Agreement shall be deemed exclusive but each
shall be cumulative with all other rights, remedies and elections available at
law or in equity.
11. All notice or other communications required or permitted
hereunder shall be in writing and may be given by depositing the same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, by overnight courier, by
facsimile transmission or by delivering the same in person to such entity.
(a) If to the Company, addressed to it at:
Allied Waste Industries, Inc.
0000 Xxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
ATTN: Xxxxx Xxxx
with a copy to:
Xxxxxx Xxxxx
Xxxxxx & Xxxxxx, LLP
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
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(b) If to Seller, addressed to it at:
Xxxxxxx, Inc.; Xxxxxxx Environmental Services, Ltd. or
Xxxxxxx Environmental Services, Inc.
0000 Xxxxx Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxx X0X 0X0
ATTN: Corporate Counsel
Notice shall be deemed given and effective the day personally delivered, the
day after being sent by overnight courier, the day transmitted by facsimile if
a business day and if not, on the next business day, and three days after
deposit in the U.S. mail of a writing addressed as above and sent first class
mail, certified, return receipt requested, or when actually received, if
earlier. Either party may change the address for notice by notifying the other
party of such change in accordance with this Section 10.
12. This Agreement shall be construed in accordance with the laws of
the State of Delaware.
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IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
day and year first above written.
ALLIED WASTE INDUSTRIES, INC.
By:
-------------------------------
Its:
------------------------------
XXXXXXX, INC.
By:
-------------------------------
Its:
------------------------------
XXXXXXX ENVIRONMENTAL SERVICES, LTD.
By:
-------------------------------
Its:
------------------------------
XXXXXXX ENVIRONMENTAL SERVICES, INC.
By:
-------------------------------
Its:
------------------------------
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EXHIBIT G
RELEASE AGREEMENT
Release Agreement dated as of _______________, 199_, by Xxxxxxx Inc., a
Canadian corporation ("Xxxxxxx"), Xxxxxxx Transportation, Inc., a Delaware
corporation and an indirect wholly owned subsidiary of Xxxxxxx ("LTI"), and
each of the Subsidiaries of Xxxxxxx, other than the Acquired Subsidiaries (the
"Retained Subsidiaries"), in favor of Allied Waste Industries, Inc., a Delaware
corporation ("Allied"), Allied Holdings (United States), Inc., a Delaware
corporation and a wholly owned subsidiary of Allied ("Allied U.S."), and
3294862 Canada Inc., a Canadian corporation and a wholly owned subsidiary of
Allied U.S. ("Allied Canada"), Xxxxxxx Waste Systems, Inc., a Delaware
corporation and a wholly owned subsidiary of Allied U.S. ("LWSI"), Xxxxxxx
Waste Systems (Canada), Ltd., a Canadian corporation and a wholly owned
subsidiary of Allied Canada ("LWSC"), Xxxxxxx Medical Services Ltd., a Canadian
corporation and a wholly owned subsidiary of Allied Canada ("LMS"), and the
Acquired Subsidiaries.
WHEREAS, pursuant to the Stock Purchase Agreement dated September 17,
1996 (the "Stock Purchase Agreement"), among Allied, Allied U.S., Allied
Canada, Xxxxxxx, LTI, LWSI, LWSC and LMS, Allied, through the acquisition by
Allied U.S. of all of the issued and outstanding capital stock of LWSI and the
acquisition by Allied Canada of all of the issued and outstanding shares in the
share capital of each of LWSC and LMS, has acquired, simultaneously herewith,
all of the United States and Canadian solid waste management operations of
Xxxxxxx; and
WHEREAS, pursuant to Section 3.3 (iv) of the Stock Purchase Agreement,
Xxxxxxx and LTI are to deliver this Release Agreement to Allied, Allied (U.S.),
and Allied Canada (collectively, the "Allied Parties") at the closing of the
transactions contemplated by the Stock Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Xxxxxxx and LTI agree as follows:
1. Definitions. For purposes of this Release Agreement:
"Acquired Subsidiaries" means (i) LWSI, (ii) the direct and
indirect wholly owned Subsidiaries of LWSI listed and identified on the
attached Schedule I, (iii) LWSC, (iv) the direct and indirect wholly
owned Subsidiaries of LWSC listed and identified on the attached
Schedule I, (v) LMS, and (vi) the 55% owned Subsidiary of LMS identified
on the attached Schedule I, collectively.
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"Affiliate" means a Person that directly, or indirectly through
one or more intermediaries, controls, is controlled by or is under
common control with another Person with the terms "control" and
"controlled" meaning for purposes of this definition, the power to
direct the management and policies of a Person, directly or indirectly,
whether through the ownership of voting securities or partnership or
other ownership interests, or by contract or otherwise.
"Governmental Entity" means any U.S. or Canadian, state,
territorial, federal, provincial, local or foreign court, executive
office, legislature, governmental agency or ministry, commission, or
administrative, regulatory or self-regulatory authority or
instrumentality.
"Person" means an individual, corporation, partnership,
association, joint stock company, limited liability company,
Governmental Entity, business trust, unincorporated organization, or
other legal entity.
"Subsidiary" of a Person means an Affiliate of that Person more
than 50% of the aggregate voting power (or for any other form of voting
equity interest in the case of a Person that is not a corporation) of
which is beneficially owned by that Person directly or indirectly
through one or more other Persons.
2. Release. Except as provided in Section 3 below, Xxxxxxx, LTI and
each of the Retained Subsidiaries, jointly and severally, hereby forever
release and discharge each of the Acquired Subsidiaries and their respective
officers, directors, agents and employees, from any and all liabilities,
charges, actions, causes of action, suits, debts, sums of money and any other
claims whatsoever, in law or in equity, liquidated or unliquidated, fixed or
continent, which Xxxxxxx, LTI or any of the Retained Subsidiaries now have
against any or all of the Acquired Subsidiaries or hereafter shall have for,
upon or by reason of any matter, claim, cause of action, damage, liability,
cost, incident, state of facts or thing whatsoever, whether known or unknown,
which occurred or existed on or before the date of this Release Agreement.
Xxxxxxx, LTI and the Retained Subsidiaries hereby acknowledge and agree that
this Release Agreement is given to induce the Allied Parties to consummate the
transactions contemplated by the Stock Purchase Agreement and agree that the
terms of this Release Agreement may be enforced at any time and from time to
time by any of the Allied Parties or by any of the Acquired Subsidiaries.
3. Exception to Release. The parties acknowledge and agree that the
release contained in Section 2 of this Release Agreement shall have no effect
upon the obligations of the Acquired Subsidiaries under the Intercompany Waste
Agreements (as such term is defined in the Stock Purchase Agreement) and under
Sections 11.12 and 12.4 (i) of the Stock Purchase Agreement.
4. Captions. The captions, headings, and arrangements used in this
Release Agreement are for convenience only and are not to affect or modify the
terms of this Release Agreement.
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219
5. Applicable Law. This Release Agreement shall be governed by and
construed in accordance with the laws of Delaware and the laws of the United
States of America applicable to transactions within such state.
EXECUTED as of the date first written above.
XXXXXXX INC.
XXXXXXX TRANSPORTATION, INC.
XXXXXXX CHEM-WASTE, INC.
XXXXXXX ENVIRONMENTAL SERVICES, INC.
XXXXXXX ENVIRONMENTAL SERVICES OF
ILLINOIS, INC.
GSX CHEMICAL SERVICES OF OHIO, INC.
XXXXXXX ENVIRONMENTAL SERVICES
(BDT), INC.
XXXXXXX ENVIRONMENTAL SERVICES (FS),
INC. XXXXXXX ENVIRONMENTAL SERVICES
(GS), INC. XXXXXXX ENVIRONMENTAL
SERVICES OF
CHATTANOOGA, INC.
XXXXXXX ENVIRONMENTAL SERVICES OF
WHITE CASTLE, INC.
XXXXXXX ENVIRONMENTAL SERVICES
(RECOVERY), INC.
XXXXXXX ENVIRONMENTAL SERVICES (TS),
INC.
XXXXXXX ENVIRONMENTAL SERVICES
(IMPERIAL VALLEY), INC.
XXXXXXX ENVIRONMENTAL SERVICES
(LOKERN), INC.
XXXXXXX ENVIRONMENTAL SERVICES OF
CALIFORNIA, INC.
XXXXXXX ENVIRONMENTAL SERVICES
(IMPERIAL VALLEY), INC.
XXXXXXX ENVIRONMENTAL SERVICES
(LOKERN), INC.
XXXXXXX ENVIRONMENTAL SERVICES OF
SOUTH CAROLINA, INC.
XXXXXXX ENVIRONMENTAL SERVICES (NORTH
EAST), INC.
CORSAN TRUCKING, INC.
XXXXXXX ENVIRONMENTAL SERVICES
(TES), INC.
XXXXXXX CHEMICAL SERVICES, INC.
XXXXXXX ENVIRONMENTAL SERVICES
(TOC), INC.
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220
XXXXXXX ENVIRONMENTAL SERVICES
(TG), INC.
REDOX, INC.
XXXXXXX ENVIRONMENTAL SERVICES
(ALTAIR), INC.
XXXXXXX ENVIRONMENTAL SERVICES
(FS), INC.
XXXXXXX ENVIRONMENTAL SERVICES
(WT), INC.
XXXXXXX ENVIRONMENTAL SERVICES OF
BARTOW, INC.
XXXXXXX ENVIRONMENTAL SERVICES
(THERMAL TREATMENT), INC.
LEMC, INC.
XXXXXXX XXXX HOLDINGS, INC.
XXXXXX INDUSTRIAL SERVICES, INC.
OSCO TREATMENT SYSTEMS OF
MISSISSIPPI, INC.
XXXXXXX ENVIRONMENTAL SERVICES OF
NASHVILLE, INC.
OSCO ENVIRONMENTAL SERVICES, INC.
MASTER WASH PRODUCTS, INC.
USPCI CLIVE INCINERATION FACILITY, INC.
XXXXXXX ENVIRONMENTAL SERVICES LTD.
XXXXXXX ENVIRONMENTAL SERVICES
(SARNIA) LTD.
XXXXXXX ENVIRONMENTAL SERVICES
(QUEBEC) LTD.
LES ENTERPRISES D'INCINERATION
INDUSTRIELLE TRICIL INC.
XXXXXXX ENVIRONMENTAL SERVICES
(MERCIER) LTD.
MASTER WASH PRODUCTS LIMITED
I.W.M. DISPOSAL INC.
XXXXX & XXXXX HOLDINGS LTD.
VINOCO OIL INC.
B.V. MANUFACTURING LTD.
XXXXXXX ENVIRONMENTAL SERVICES
(RYLEY) LTD.
XXXXXXX ENVIRONMENTAL SERVICES
(ATLANTIC) LIMITED
PPM CANADA, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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221
AGREED AND ACCEPTED:
ALLIED WASTE INDUSTRIES, INC.
3294862 CANADA INC.
3294854 CANADA INC.
XXXXXXX WASTE SYSTEMS, INC.
XXXXXXX WASTE SYSTEMS (CANADA), LTD.
XXXXXXX MEDICAL SERVICES LTD.
XXXXXXX WASTE SYSTEMS LTD.
XXXXXXX WASTE SYSTEMS (DURHAM) LTD.
XXXXXXX WASTE SYSTEMS (WARWICK) LTD.
635952 ONTARIO, INC.
TRICIL (N.Y.), INC.
XXXXXXX WASTE SYSTEMS HOLDINGS, INC.
XXXXXXX GAS RECOVERY CORPORATION, INC.
XXXXXXX GAS RECOVERY CORPORATION II, INC.
XXXXXXX GAS RECOVERY SYSTEMS, INC.
CATPAC TWO, INC.
XXXXXXX MEDICAL SYSTEMS, INC.
XXXXXXX WASTE SYSTEMS (XXXXXX) INC.
XXXXXXX WASTE SYSTEMS (BELLEFONTAINE) INC.
XXXXXXX WASTE SYSTEMS (BRIDGETON) INC.
XXXXXXX WASTE SYSTEMS (CELINA) INC.
XXXXXXX WASTE SYSTEMS (XXXXXXXX) INC.
XXXXXXX WASTE SYSTEMS (COLORADO) INC.
XXXXXXX WASTE SYSTEMS (DALLAS) INC.
XXXXXXX WASTE SYSTEMS (FORT WORTH) INC.
XXXXXXX WASTE SYSTEMS (HOUSTON) INC.
XXXXXXX WASTE SYSTEMS (JEFFERSON CITY) INC.
XXXXXXX WASTE SYSTEMS (KANSAS CITY) INC.
XXXXXXX WASTE SYSTEMS (MADISON) INC.
XXXXXXX WASTE SYSTEMS (MICHIGAN) INC.
XXXXXXX WASTE SYSTEMS (OKLAHOMA CITY) INC.
XXXXXXX WASTE SYSTEMS (TEXAS) INC.
XXXXXXX WASTE SYSTEMS (VALLEY VIEW) INC.
XXXXXXXX COUNTY LANDFILL, INC.
XXXXXXX WASTE SYSTEMS CANADA, LTD.
XXXXXXX ENERGY TECHNOLOGICS LTD.
BESTAN, INC.
XXXXXXX WASTE SYSTEMS (OTTAWA), LTD.
XXXXXXX WASTE SYSTEMS (RICHMOND), LTD.
XXXXXXX WASTE SYSTEMS (STORRINGTON), LTD.
2686848 CANADA, INC.
ENDWASTE, INC.
XXXXXXX GESTION DE REBUTS QUEBEC LTEE
DECHEX LTD.
5
222
CENTRE DE TRI TRANSIT
LOCATION SANICO
XXXXXXX MEDICAL SERVICES LTD.
By:
----------------------------------
Name:
---------------------------------
Title:
--------------------------------
6
223
Schedule I to
Release Agreement
List of Acquired Subsidiaries
XXXXXXX WASTE SYSTEMS, INC. (DELAWARE)
Xxxxxxx Waste Systems Ltd. (Canada)
Xxxxxxx Waste Systems (Durham) Ltd. (Ontario)
Xxxxxxx Waste Systems (Warwick) Ltd. (Ontario)
635952 Ontario, Inc. (Ontario)
Tricil (N.Y.), Inc. (New York)
Xxxxxxx Waste Systems Holdings, Inc. (Delaware)
Xxxxxxx Gas Recovery Corporation, Inc. (California)
Xxxxxxx Gas Recovery Corporation II, Inc. (California)
Xxxxxxx Gas Recovery Systems, Inc. (California)
CATPAC Two, Inc. (Delaware)
Xxxxxxx Medical Systems, Inc. (Delaware)
Xxxxxxx Waste Systems (Xxxxxx) Inc. (Michigan)
Xxxxxxx Waste Systems (Bellefontaine) Inc. (Ohio)
Xxxxxxx Waste Systems (Bridgeton) Inc. (Missouri)
Xxxxxxx Waste Systems (Celina) Inc. (Ohio)
Xxxxxxx Waste Systems (Xxxxxxxx) Inc. (California)
Xxxxxxx Waste Systems (Colorado) Inc. (Colorado)
Xxxxxxx Waste Systems (Dallas) Inc. (Delaware)
Xxxxxxx Waste Systems (Fort Worth) Inc. (Delaware)
Xxxxxxx Waste Systems (Houston) Inc. (Delaware)
Xxxxxxx Waste Systems (Jefferson City) Inc. (Missouri)
Xxxxxxx Waste Systems (Kansas City) Inc. (Missouri)
Xxxxxxx Waste Systems (Madison) Inc. (Illinois)
Xxxxxxx Waste Systems (Michigan) Inc. (Delaware)
Xxxxxxx Waste Systems (Oklahoma City) Inc. (Oklahoma)
Xxxxxxx Waste Systems (Texas) Inc. (Texas)
Xxxxxxx Waste Systems (Valley View) Inc. (Kentucky)
Xxxxxxxx County Landfill, Inc. (Ohio)
XXXXXXX WASTE SYSTEMS CANADA, LTD. (CANADA)
Xxxxxxx Energy Technologics Ltd. (Canada)
Bestan, Inc. (Quebec)
Xxxxxxx Waste Systems (Ottawa), Ltd. (Ontario)
Xxxxxxx Waste Systems (Richmond), Ltd. (Canada)
Xxxxxxx Waste Systems (Storrington), Ltd. (Canada)
2686848 Canada, Inc. (Canada)
Endwaste, Inc. (Ontario)
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224
Xxxxxxx Gestion de Rebuts Quebec Ltee (Canada)
Dechex Lte (Quebec)
Centre de Tri Transit (Quebec)
Location Sanico (Quebec)
XXXXXXX MEDICAL SERVICES LTD. (CANADA)
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225
EXHIBIT H-1
GUARANTY
[Allied Finance 7% Debenture]
THIS GUARANTY (as amended or restated, this "Guaranty") dated as of
_____________ 199__, by Allied Waste Industries, Inc., a Delaware corporation
(the "Guarantor"), for the benefit of Xxxxxxx Inc., a Canadian corporation
("Xxxxxxx").
W I T N E S S E T H:
WHEREAS, pursuant to the Stock Purchase Agreement dated as of
September 17, 1996 (the "Stock Purchase Agreement"), among the Guarantor,
Allied Holdings (United States), Inc., a Delaware corporation and a wholly
owned subsidiary of the Guarantor ("Allied U.S."), 3294862 Canada Inc., a
Canadian corporation and a wholly owned subsidiary of and Allied U.S. ("Allied
Canada"), and Xxxxxxx, Xxxxxxx Transportation, Inc., a Delaware corporation
("LTI"), Xxxxxxx Waste Systems, Inc., a Delaware corporation and a wholly owned
subsidiary of LTI ("LWSI"), Xxxxxxx Waste Systems (Canada), Ltd., a Canadian
corporation and a wholly owned subsidiary of Xxxxxxx ("LWSC"), and Xxxxxxx
Medical Services Ltd., a Canadian corporation and a wholly owned subsidiary of
Xxxxxxx ("LMS"), the Guarantor, through the acquisition by Allied U.S. of all
of the issued and outstanding capital stock of LWSI and the acquisition by
Allied Canada of all of the issued and outstanding shares in the share capital
of each of LWSC and LMS, has acquired, on the date hereof, all of the United
States and Canadian solid waste management operations of Xxxxxxx; and
WHEREAS, as a portion of the consideration for the purchase by Allied
Canada of the LWSC Shares (as such term is defined in the Stock Purchase
Agreement), Allied Canada has issued its 7% Junior Subordinated Debenture due
200_ dated the date hereof (the "Allied Canada Debenture"), payable to Xxxxxxx
in the original principal amount of $150,000,000; and
WHEREAS, pursuant to the Debenture Exchange Agreement dated the date
hereof between Allied Finance and Xxxxxxx, Allied Finance has issued its 7%
Junior Subordinated Debenture due 200__ dated the date hereof (the "Debenture")
payable to Xxxxxxx in the original principal amount of $150,000,000 in exchange
for the Allied Canada Debenture;
WHEREAS, Xxxxxxx requires, as a condition precedent to its acceptance
of the Debenture, that the Guarantor execute and deliver this Guaranty to
Xxxxxxx; and
WHEREAS, in the Guarantor's judgment, the consideration received and
to be received by it in connection with the issuance of the Debenture and this
Guaranty is reasonably worth at least as much as its liability and obligation
under this Guaranty, and such liability and obligation may reasonably be
expected to benefit the Guarantor directly or indirectly;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby guarantees to Xxxxxxx the prompt payment at
maturity (by acceleration or otherwise),
226
and at all times thereafter, of the principal of, and all accrued interest on,
the Debenture (the "Guaranteed Debt"), upon the following terms and conditions:
1. Definitions.
(a) For purposes of this Guaranty:
"Affiliate" means, with respect to any Person, another Person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such Person
with the term "control," including the terms "controlling" and
"controlled," meaning for purposes of this definition, the power to
direct the management and policies of a Person, directly or
indirectly, whether through the ownership of voting securities or
partnership or other ownership interests, or by contract or otherwise.
"Bankruptcy or Insolvency Proceeding" is defined in Subsection
3(b) of this Guaranty.
"Blockage Period" means any period when a default or an event
of default or an event which, with the giving of notice or the lapse
of time or both, would constitute a default or an event of default has
occurred and is continuing under the terms of the Credit Facility or
the Senior Subordinated Debentures or under the terms of any agreement
or instrument pursuant to which any other Designated Senior
Indebtedness is created, issued, evidenced, secured or guaranteed.
"Credit Facility" means the Credit Agreement dated as of
_____________, 199_, among Allied U.S., as borrower, the Guarantor,
Xxxxxxx Sachs Credit Partners L.P., as syndication agent, Citibank,
N.A., as documentation agent, Credit Suisse, as administrative agent,
Xxxxxxx Xxxxx Credit Partners L.P., Citicorp USA, Inc. and Credit
Suisse, as initial lenders, and the other financial institutions now
or hereafter parties thereto (as the same may be renewed, amended,
modified, extended, increased, refinanced, or otherwise supplemented
from time to time).
"Debenture" is defined above.
"Designated Senior Indebtedness" means (i) the Senior
Indebtedness incurred with respect to the Credit Facility, (ii) the
Senior Indebtedness evidenced by the Senior Subordinated Debentures
and (iii) any other Senior Indebtedness which is incurred pursuant to
an agreement (or series of related agreements simultaneously entered
into) providing for Indebtedness, or commitments to lend, of at least
$10,000,000 at the time of determination and is specifically
designated in the instrument evidencing such Senior Indebtedness or
the agreement under which such Senior Indebtedness arises as
"Designated Senior Indebtedness."
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227
"$" means U.S. dollars, the lawful currency of the United
States of America.
"Financing Lease" means any lease of property, real or
personal, the obligations of the lessee in respect of which are
required in accordance with generally accepted accounting principles
to be capitalized on a balance sheet of the lessee.
"Governmental Entity" means any U.S. or Canadian, territorial,
federal, state, provincial or local court, executive office,
legislature, governmental agency, department, ministry, commission, or
administrative, regulatory or self-regulatory authority or
instrumentality.
"Guarantee" means with respect to any Person any obligation,
contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of such Person, direct or indirect, (a)
to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or
services for the purpose of assuring the owner of such Indebtedness of
the payment of such Indebtedness or (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; provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course
of business.
"Guaranteed Debt" is defined above.
"Indebtedness" means with respect to any Person at any date,
(a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond,
debenture, letter of credit or similar instrument, (c) all obligations
of such Persons with respect to Guarantees, (d) all obligations of
such Person under Financing Leases, (e) all obligations of such Person
in respect of acceptances issued or created for the account of such
Person (other than endorsements in the ordinary course of business),
(f) all obligations in respect of interest rate swaps or other
interest rate hedging products or foreign currency exchange agreements
or exchange rate hedging arrangements, (g) all obligations in respect
of reimbursement obligations under letters of credit, and (h) all
liabilities of the type referred to in clauses (a) through (g) above
that are secured by any lien, charge, security interest or encumbrance
on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof.
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228
"Indenture" means the Indenture dated _____________, 199_,
between Allied U.S. and the Trustee pursuant to which the Senior
Subordinated Debentures are issued.
"Person" means an individual, corporation, partnership,
association, joint stock company, limited liability company,
Governmental Entity, business trust, unincorporated organization, or
other legal entity.
"Representative" means at any date, with respect to the Credit
Facility, the Person or Persons then acting as the administrative
agent under the Credit Facility, with respect to the Senior
Subordinated Debentures, the Trustee, and with respect to any other
Designated Senior Indebtedness, the holders of such Designated Senior
Indebtedness or any Person acting as agent of such holders at such
date.
"Senior Indebtedness" means principal of, and premium, if any,
and interest on (including interest that, but for the filing of a
petition initiating any Bankruptcy or Insolvency Proceeding, would
accrue on such obligations at the rate provided in the agreements or
instruments creating or evidencing the respective obligations, whether
or not such claim is allowed or allowable in such Bankruptcy or
Insolvency Proceeding) and all other amounts of every kind or nature
(including, but not limited to, fees, indemnities and expenses) due on
or in connection with any Indebtedness of the Guarantor, whether
outstanding on the date of this Guaranty or thereafter created,
incurred, assumed or Guaranteed by the Guarantor (including all
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing) unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to this Guaranty.
Without limiting the generality of the foregoing, "Senior
Indebtedness" shall include (a) all obligations and liabilities of
every kind and nature (including, but not limited to, fees, expenses
and indemnities) under the Credit Facility, the Senior Subordinated
Debentures or the Indenture, (b) all obligations and liabilities of
every kind and nature (including, but not limited to, fees, expenses
and indemnities) in respect of any interest rate swaps or other
interest rate hedging product entered into in connection with
Indebtedness incurred or to be incurred pursuant to the Credit
Facility, and (c) any renewal, extension, refinancing or rearrangement
of any Indebtedness incurred or to be incurred pursuant to the Credit
Facility, the Senior Subordinated Debentures or the Indenture.
Notwithstanding the foregoing, Senior Indebtedness shall not include
(i) amounts owed (except to banks, insurance companies and other
financing institutions and except for obligations under Financing
Leases) for goods, materials, services or operating lease rental
payments in the ordinary course of business or for compensation to
employees of the Guarantor, (ii) any liability for federal, state,
provincial, local or other taxes owed or owing by the Guarantor and
(iii) Indebtedness with respect to Allied Finance's Zero Coupon Junior
Subordinated Debentures due 200__ dated the date hereof and the
Guaranty thereof by the Guarantor.
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229
"Senior Subordinated Debentures" means the ___% Senior
Subordinated Debentures due 200__(1) in the aggregate original
principal amount of at least $475,000,000 issued by Allied U.S.
pursuant to the Indenture.
"Subordinated Obligations" is defined in Subsection 3(a).
"Subsidiary" of a Person means another Person more than 50% of
the aggregate voting power (or of any other form of voting equity
interest in the case of a Person that is not a corporation) of which
is beneficially owned by that Person directly or indirectly through
one or more other Subsidiaries.
"Trustee" means ________________________________, a national
banking association, in its capacity as trustee under the Indenture,
and its successors in such capacity.
(b) Capitalized terms defined in this Guaranty are equally
applicable to both their singular and plural forms. References to a
designated "Section" or "Subsections" refer to a Section or Subsection of this
Guaranty unless otherwise specifically indicated. In this Guaranty "including"
is used only to indicate examples, without limitation to the indicated
examples, and without limiting any generality which precedes it.
2. Nature of Guaranty. Subject to the provision of Section 3 of
this Guaranty, the Guarantor agrees that (i) its obligations with regard to
this Guaranty shall be unconditional, irrespective of the validity, regularity
or enforceability of the Debenture, the absence of any action to enforce the
same, any delays in obtaining or realizing upon (or failures to obtain or
realize upon) collateral, the recovery of any judgment against the Company, any
action to enforce the same or any other circumstances that might otherwise
constitute a legal or equitable discharge or defense of a guarantor and (ii)
this Guaranty will not be discharged except by complete performance of the
obligations contained in the Debenture. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of Allied Finance, any right to require a proceeding
first against Allied Finance or right to require the prior disposition of the
assets of Allied Finance to meet its obligations, protest, notice and all
demands whatsoever and covenants that this Guaranty will not be discharged
except by complete performance of the obligations contained in the Debenture.
If Xxxxxxx is required by any court or otherwise to return to either Allied
Finance or any trustee or similar official acting with respect to Allied
Finance, any amount paid by Allied Finance to Xxxxxxx, this Guaranty, to the
extent theretofore discharged, shall be reinstated in full force and effect.
The Guarantor agrees that it will not be entitled to any right of subrogation
in relation to Xxxxxxx in respect of any obligations guaranteed hereby until
all such obligations have been paid in full in cash. The Guarantor agrees
that, subject to
-------------------
(1) The due date of the Senior Subordinated Debentures will be 10 years after
the date of issuance.
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230
Section 3, (i) the maturity of the obligations guaranteed hereby may be
accelerated for the purposes of this Guaranty, notwithstanding any stay,
injunction or other prohibition preventing such acceleration as to Allied
Finance of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations, those obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantor for
the purpose of this Guaranty.
3. Subordination.
(a) The indebtedness evidenced by, and all obligations in
respect of, this Guaranty (collectively, the "Subordinated
Obligations") are expressly subordinate to all Senior Indebtedness to
the extent and in the manner set forth herein. For purposes hereof,
the term "subordinate" means that, unless and until the Senior
Indebtedness has been indefeasibly paid in full in cash, Xxxxxxx will
not take, demand, commence any suit or any other proceeding for
collection, pursue any other judicial or non-judicial remedy or
receive from the Guarantor or any of its Subsidiaries or Affiliates,
and the Guarantor will not have the right under any circumstances to,
and will not and will not permit any of its Subsidiaries or Affiliates
to, make, give, or permit, directly or indirectly, by set-off,
redemption, purchase or in any other manner, any payment of or on
account of the Subordinated Obligations; provided, however, that at
any time, the Guarantor may make, and Xxxxxxx may receive, and Xxxxxxx
may commence any suit or other proceeding for collection of, payments
of the Guaranteed Debt to the extent (but only to the extent) that at
such time Allied Finance is permitted to pay the same pursuant to the
provisions of Section 5 of the Debenture. In no event shall the
Guarantor be obligated to make, and the Guarantor shall not make, and
shall not permit any of its Subsidiaries or Affiliates to make,
directly or indirectly, by set-off, redemption, purchase or in any
other manner, any payments or prepayments of, or on account of, any of
the Subordinated Obligations during any Blockage Period or if such
payment or prepayment would cause the occurrence of a Blockage Period.
(b) Upon any payment or distribution of any kind or
character to creditors of the Guarantor (whether in cash, property or
securities) in (x) a total or partial liquidation, winding up or
dissolution of the Guarantor (whether voluntarily or involuntarily) or
(y) in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Guarantor or its property, or in an
assignment for the benefit of creditors or any marshaling of the
Guarantor's assets and liabilities (any of the foregoing in clauses
(x) and (y) being referred to herein as a "Bankruptcy or Insolvency
Proceeding"), the holders of Senior Indebtedness will be entitled to
receive payment in full in cash of all the principal of and interest
on and other amounts payable in respect of such Senior Indebtedness
(including interest accruing after the commencement of any such
proceeding at the rate specified in the agreements or instruments
creating or evidencing the applicable Senior Indebtedness and whether
or not such interest is an allowed or allowable claim under applicable
law) before Xxxxxxx will be entitled to receive any payment with
respect to this Guaranty (whether in cash,
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231
property or securities); and until all obligations with respect to
Senior Indebtedness are indefeasibly paid in full in cash, any
distribution received by Xxxxxxx or to which Xxxxxxx would be entitled
shall be paid over or made to the holders of Senior Indebtedness.
Upon the occurrence of any Bankruptcy or Insolvency Proceeding
relating to the Guarantor, the holders of the Senior Indebtedness are
authorized and empowered to (i) demand, xxx for, collect and receive
every payment or distribution on account of the Subordinated
Obligations payable or deliverable in connection with such event or
proceeding and give acquittance therefor, and (ii) file claims and
proofs of claim in any statutory or non-statutory proceeding and take
such other actions as may be necessary or desirable for the
enforcement of the subordination provisions of this Guaranty.
Promptly after taking any action provided in clauses (i) and (ii)
above, the holders of Senior Indebtedness taking such action shall
give written notice thereof to the holder of this Debenture; provided,
however that failure to give such notice shall in no event affect the
validity of any action so taken.
(c) In the event that, notwithstanding the occurrence of
any of the events described in Subsections 3(a) and (b), any such
payment or distribution of assets of the Guarantor of any kind or
character, whether in cash, property or securities, shall be received
by the holder of this Guaranty which is not permitted hereby, such
payment or distribution shall be held in trust for the ratable benefit
of, and shall be paid over or delivered to, the holders of the Senior
Indebtedness.
(d) The holders of the Senior Indebtedness shall have no
duty or obligation to Xxxxxxx in any manner whatsoever and may, at any
time and from time to time, in their sole discretion, without the
consent of or notice to Xxxxxxx and without impairing or releasing any
rights of the holders of the Senior Indebtedness or any of the
obligations of the holder of this Guaranty hereunder, take any or all
of the following actions:
(i) change the amount, manner, place, terms of
payment or interest rate, change or extend the time of payment
of, or renew or alter, any of the Senior Indebtedness, or
amend or supplement or waive any of the terms of any
instrument or agreement now or hereafter executed pursuant to
which any of the Senior Indebtedness is issued or incurred;
(ii) sell, exchange, release, surrender, relend,
realize upon or otherwise deal with in any manner and in any
order, any property (or the income, revenues, profits or
proceeds therefrom) by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, any Senior
Indebtedness;
(iii) release any person liable in any manner for
the payment or collection of the Senior Indebtedness;
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232
(iv) exercise or refrain from exercising any
rights and remedies against Allied Finance, the Guarantor or
others, or otherwise act or refrain from acting or, for any
reason, fail to file, record or otherwise perfect any security
interest in or lien on any property of Allied Finance, the
Guarantor or any other Person; and
(v) apply any sums received by the holders of the
Senior Indebtedness, by whomsoever paid and however realized,
to payment of the Senior Indebtedness in such manner as the
holders of the Senior Indebtedness, in their sole discretion,
may deem appropriate.
(e) Xxxxxxx and any future holder of this Guaranty, by
acceptance of this Guaranty, agree to provide to any holder of Senior
Indebtedness, at any time and from time to time, upon the written
request of the Guarantor or such holder of Senior Indebtedness, an
agreement signed by Xxxxxxx or such future holder of this Guaranty
addressed to the holder of such Senior Indebtedness in substantially
the form of, and on substantially the terms set out in, Exhibit A
hereto to the effect that such Person is a holder of Senior
Indebtedness, that the holder or holders of such Senior Indebtedness
are entitled to the benefits of Sections 3 and 4 of this Guaranty and
that the holder or holders of such Senior Indebtedness may enforce the
terms and provisions thereof to the same extent the Guarantor would be
able to do so, provided, however, that prior to furnishing such
agreement, Xxxxxxx has received from the Guarantor or such holder such
information as Xxxxxxx may reasonably request demonstrating to
Xxxxxxx' reasonable satisfaction that such Person is a holder of
Senior Indebtedness. Xxxxxxx, and each subsequent holder of this
Guaranty, by acceptance of this Guaranty, irrevocably appoint the
Guarantor (with full power of substitution) as its agent and attorney
in fact (which appointment is coupled with an interest and shall be
irrevocable so long as any Senior Indebtedness is outstanding) to
execute and deliver on behalf and in the name of Xxxxxxx or such
holder, as the case may be, an agreement in substantially the form of,
and on substantially the terms set out in, Exhibit A hereto in favor
of each such holder of Senior Indebtedness and to take such further
action as may be necessary or appropriate to effectuate the
subordination as provided herein. Promptly after exercise of any such
power, Allied Finance will give written notice thereof to the holder
of the Debenture; provided, however, that failure to give such notice
shall in no event affect the validity of any power so exercised.
(f) Until all Senior Indebtedness has been paid in full
in cash, the holder of this Guaranty shall not be entitled to assert,
enforce or otherwise exercise any right of subrogation against the
Guarantor or any other Person obligated on the Subordinated
Obligations. After all Senior Indebtedness has been indefeasibly paid
in full in cash, and until the Subordinated Obligations have been so
paid in full, the holder of this Guaranty shall be subrogated to the
rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness. A distribution made under this
Section 3 to holders of Senior Indebtedness which otherwise would have
been made to the
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holder of this Guaranty is not, as between the Guarantor and the
holder of this Guaranty, a payment by the Guarantor on Senior
Indebtedness.
(g) This Section 3 defines the relative rights of the
holder of this Guaranty and holders of Senior Indebtedness. Nothing
in this Guaranty shall:
(i) impair, as between the Guarantor and the
holder of this Guaranty, the obligation of the Guarantor,
which is absolute and unconditional, to pay the Guaranteed
Debt in accordance with this Guaranty; or
(ii) except as otherwise set forth in this Section
3, prevent the holder of this Guaranty from exercising its
available remedies hereunder, subject to the rights of holders
of Senior Indebtedness to receive distributions otherwise
payable to such holder.
4. No Impairment. Section 3 and this Section 4 (and all defined
terms used in such sections) shall constitute a continuing offer to all Persons
who become holders of, or continue to hold, Senior Indebtedness, and such
provisions are made for the benefit of the holders from time to time of Senior
Indebtedness, and such Persons are conclusively presumed to have relied upon
such provisions; and such holders are made obligees hereunder, and they or each
of them may enforce such provisions. No right of any present or future holder
of any Senior Indebtedness to enforce the subordination or other provisions
referred to in this Section 4 shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Guarantor or Xxxxxxx,
or by any non-compliance by the Guarantor or Xxxxxxx with the terms, provisions
and covenants of this Guaranty, regardless of any knowledge thereof any such
holder may have or otherwise be charged with. Section 3, this Section 4 and
the subordination and other provisions referred to in this Section 4 may not be
amended or modified in any manner which might terminate or impair the
subordination or such other provisions except with the prior written consent of
the Representatives of all the Designated Senior Indebtedness.
5. Binding Agreement. This Guaranty benefits Xxxxxxx and its
successors and permitted assigns and binds the Guarantor and its successors and
permitted assigns. Sections 3 and 4 and the other subordination provisions
hereof bind the Guarantor and Xxxxxxx and their respective successors and
assigns. The Guarantor acknowledges that the rights and benefits of this
Guaranty may be transferred with any permitted assignment of the Guaranteed
Debt.
6. Notices. All notices or other communications which are
required or may be given under this Guaranty shall be in writing and shall be
deemed to have been duly given when delivered in person or transmitted by
telecopier (with receipt confirmed) at the address or telecopy number set forth
below (as any such address or telecopier number may be changed from time to
time by notice similarly given):
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(a) if to Xxxxxxx, to:
Xxxxxxx Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(b) if to the Guarantor, to:
Allied Waste Industries, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
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235
7. Applicable Law. This Guaranty shall be governed by and
construed in accordance with the laws of the State of Delaware and the laws of
United States of America applicable therein (without reference to the conflicts
of law principles thereof).
8. OFFSET. THE OBLIGATIONS OF ALLIED FINANCE HEREUNDER ARE, IN
ALL RESPECTS, SUBJECT TO OFFSET AS MORE FULLY SET FORTH IN THE OFFSET LETTER
AGREEMENT. THE OFFSET RIGHTS SET FORTH IN THE OFFSET LETTER AGREEMENT SHALL BE
EFFECTIVE NOTWITHSTANDING THE ASSIGNMENT OR TRANSFER OF THIS DEBENTURE BY
XXXXXXX AND ANY TRANSFEREE SHALL TAKE THIS DEBENTURE SUBJECT TO THE TERMS
THEREOF.
ALLIED WASTE INDUSTRIES, INC., a Delaware
corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Agreed and Accepted:
Xxxxxxx INC., a Canadian corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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236
EXHIBIT A
to the Guaranty Issued by
Allied Waste Industries, Inc. in favor of Xxxxxxx Inc.
------------------------------------------------------
[Date]
--------------------
--------------------
--------------------
Gentlemen:
Reference is made to the 7% Junior Subordinated Debenture Due 200__
dated __________, 199__ (the "Subordinated Debenture"), in the original
principal amount of $150 million issued by Allied Waste Finance (Canada), Ltd.,
a Canadian corporation ("Allied Finance"), in favor of Xxxxxxx Inc., a Canadian
corporation ("Xxxxxxx"), the Guaranty dated the date hereof (the "Guaranty"),
issued by Allied Waste Industries, Inc., a Delaware corporation (the
"Guarantor"), in favor of Xxxxxxx with respect to the obligations under the
Subordinated Debenture, and the [describe Senior Indebtedness] (the "Subject
Indebtedness"), being issued contemporaneously herewith by the Guarantor in
favor of [identity of holder or holders of Subject Indebtedness] (whether one
or more, the "Senior Creditor"). Hereinafter, capitalized words and phrases
used herein which are defined in the Guaranty are used herein as therein
defined.
The undersigned (the "Subordinated Creditor") hereby represents and
warrants to the Senior Creditor that the Subordinated Creditor is the owner and
holder of the Subordinated Debenture and the Guaranty and that the Subordinated
Creditor is entitled to make the agreements herein contained. The Subordinated
Creditor hereby acknowledges and agrees that the principal of, and premium, if
any, and interest on (including interest that, but for the filing of a petition
initiating any Bankruptcy or Insolvency Proceeding would accrue on such
obligations at the time provided in the agreements or instruments creating or
evidencing the respective obligations, whether or not such claim is allowed in
such Bankruptcy or Insolvency Proceeding) and all other amounts of every kind
or nature (including, but not limited to, fees, indemnities and expenses and
any interest rate swaps or other interest rate hedging products entered into in
connection with the Subject Indebtedness) due on or in connection with the
Subject Indebtedness, whether outstanding on the date hereof or hereafter
created, incurred or assumed, guaranteed or in effect guaranteed by the
Guarantor (including all renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing) are in all respects Senior
Indebtedness, that the Senior Creditor (and any other Person who from time to
time is a holder of the Subject Indebtedness) is entitled to the benefits of
Sections 3 and 4 of the Guaranty and that the Senior Creditor (and any other
Person who from time to
A-1
237
time is a holder of the Subject Indebtedness) may enforce the terms and
provisions of Sections 3 and 4 of the Guaranty to the same extent that the
Guarantor or any other holder of Senior Indebtedness would be able to do so.
The Subordinated Creditor hereby agrees that the Subordinated
Debenture and the Guaranty will not be sold, assigned, transferred, pledged or
hypothecated in any manner, directly or indirectly, by the Subordinated
Creditor, unless the assignee, transferee, pledgee or hypothecate has agreed in
writing to be bound by the provisions of this agreement.
The Subordinated Creditor has executed this agreement in the space
provided below in order to induce the Senior Creditor to advance funds or
extend credit to the Guarantor, and this agreement is intended by the
Subordinated Creditor to be a binding and enforceable undertaking by the
Subordinated Creditor in favor of the Senior Creditor.
The rights credited hereby of the Senior Creditor and of any
subsequent holder of the Senior Indebtedness will be assigned automatically,
and without any further act, by the Senior Creditor or such holder upon any
sale, assignment, conveyance or other transfer of all or any part of the Senior
Indebtedness to the extent of the interest sold, assigned, conveyed or
otherwise transferred, unless and to the extent the Senior Creditor or such
holder expressly provides otherwise in the instrument pursuant to which such
interest is conveyed.
Very truly yours,
[NAME OF SUBORDINATED CREDITOR]
By:
---------------------------
Name:
-------------------------
Title:
------------------------
Accepted and agreed to as of
the date first above written:
[NAME OF SENIOR CREDITOR]
By:
---------------------------------------
Name:
--------------------------------------
Title:
------------------------------------
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238
EXHIBIT H-2
GUARANTY
[Allied Finance Zero Coupon Debenture]
THIS GUARANTY (as amended or restated, this "Guaranty") dated as of
_____________ 199__, by Allied Waste Industries, Inc., a Delaware corporation
(the "Guarantor"), for the benefit of Xxxxxxx Inc., a Canadian corporation
("Xxxxxxx").
W I T N E S S E T H:
WHEREAS, pursuant to the Stock Purchase Agreement dated as of September
17, 1996 (the "Stock Purchase Agreement"), among the Guarantor, Allied Holdings
(United States), Inc., a Delaware corporation and a wholly owned subsidiary of
the Guarantor ("Allied U.S."), 3294862 Canada Inc., a Canadian corporation and
a wholly owned subsidiary of Allied U.S. ("Allied Canada"), and 3294854 Canada,
Inc., a Canadian corporation and a wholly owned subsidiary of the Guarantor
("Allied Finance"), and Xxxxxxx, Xxxxxxx Transportation, Inc. ("LTI"), Xxxxxxx
Waste Systems, Inc., a Delaware corporation and a wholly owned subsidiary of
LTI ("LWSI"), Xxxxxxx Waste Systems (Canada), Ltd., a Canadian corporation and
a wholly owned subsidiary of Xxxxxxx ("LWSC"), and Xxxxxxx Medical Services
Ltd., a Canadian corporation and a wholly owned subsidiary of Xxxxxxx ("LMS"),
the Guarantor, through the acquisition by Allied U.S. of all of the issued and
outstanding capital stock of LWSI and the acquisition by Allied Canada of all
of the issued and outstanding shares in the share capital of each of LWSC and
LMS, has acquired, on the date hereof, all of the United States and Canadian
solid waste management operations of Xxxxxxx; and
WHEREAS, as a portion of the consideration for the purchase by Allied
Canada of the LWSC Shares (as such term is defined in the Stock Purchase
Agreement), Allied Canada has issued its Zero Coupon Junior Subordinated
Debenture due 200_ dated the date hereof (the "Allied Canada Debenture"),
payable to Xxxxxxx in the original principal amount of $168,300,000; and
WHEREAS, pursuant to the Debenture Exchange Agreement dated the date
hereof between Allied Finance and Xxxxxxx, Allied Finance has issued its Zero
Coupon Junior Subordinated Debenture due 200__ dated the date hereof (the
"Debenture") payable to Xxxxxxx in the original principal amount of
$168,300,000 in exchange for the Allied Canada Debenture;
WHEREAS, Xxxxxxx requires, as a condition precedent to its acceptance of
the Debenture, that the Guarantor execute and deliver this Guaranty to Xxxxxxx;
and
WHEREAS, in the Guarantor's judgment, the consideration received and to
be received by it in connection with the issuance of the Debenture and this
Guaranty is reasonably worth at least as much as its liability and obligation
under this Guaranty, and such liability and obligation may reasonably be
expected to benefit the Guarantor directly or indirectly;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor
239
hereby guarantees to Xxxxxxx the prompt payment at maturity (by acceleration or
otherwise), and at all times thereafter, of the principal of, and all accrued
interest on, the Debenture (the "Guaranteed Debt"), upon the following terms
and conditions:
1. Definitions.
(a) For purposes of this Guaranty:
"Affiliate" means, with respect to any Person, another Person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such Person
with the term "control," including the terms "controlling" and
"controlled," meaning for purposes of this definition, the power to
direct the management and policies of a Person, directly or indirectly,
whether through the ownership of voting securities or partnership or
other ownership interests, or by contract or otherwise.
"Bankruptcy or Insolvency Proceeding" is defined in Subsection
3(b) of this Guaranty.
"Blockage Period" means any period when a default or an event of
default or an event which, with the giving of notice or the lapse of
time or both, would constitute a default or an event of default has
occurred and is continuing under the terms of the Credit Facility or the
Senior Subordinated Debentures or under the terms of any agreement or
instrument pursuant to which any other Designated Senior Indebtedness is
created, issued, evidenced, secured or guaranteed.
"Credit Facility" means the Credit Agreement dated as of
_____________, 199_, among Allied U.S., as borrower, the Guarantor,
Xxxxxxx Sachs Credit Partners L.P., as syndication agent, Citibank,
N.A., as documentation agent, Credit Suisse, as administrative agent,
Xxxxxxx Xxxxx Credit Partners L.P., Citicorp USA, Inc. and Credit
Suisse, as initial lenders, and the other financial institutions now or
hereafter parties thereto (as the same may be renewed, amended,
modified, extended, increased, refinanced, or otherwise supplemented
from time to time).
"Debenture" is defined above.
"Designated Senior Indebtedness" means (i) the Senior
Indebtedness incurred with respect to the Credit Facility, (ii) the
Senior Indebtedness evidenced by the Senior Subordinated Debentures and
(iii) any other Senior Indebtedness which is incurred pursuant to an
agreement (or series of related agreements simultaneously entered into)
providing for Indebtedness, or commitments to lend, of at least
$10,000,000 at the time of determination and is specifically designated
in the instrument evidencing such Senior Indebtedness or the agreement
under which such Senior Indebtedness arises as "Designated Senior
Indebtedness."
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240
"$" means U.S. dollars, the lawful currency of the United States
of America.
"Financing Lease" means any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with generally accepted accounting principles to be
capitalized on a balance sheet of the lessee.
"Governmental Entity" means any U.S. or Canadian, territorial,
federal, state, provincial or local court, executive office,
legislature, governmental agency, department, ministry, commission, or
administrative, regulatory or self-regulatory authority or
instrumentality.
"Guarantee" means with respect to any Person any obligation,
contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of such Person, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment
of ) such Indebtedness or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Indebtedness, (b)
to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness of the payment of such
Indebtedness or (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; provided,
however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business.
"Guaranteed Debt" is defined above.
"Indebtedness" means with respect to any Person at any date, (a)
all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of such
Person which is evidenced by a note, bond, debenture, letter of credit
or similar instrument, (c) all obligations of such Persons with respect
to Guarantees, (d) all obligations of such Person under Financing
Leases, (e) all obligations of such Person in respect of acceptances
issued or created for the account of such Person (other than
endorsements in the ordinary course of business), (f) all obligations
in respect of interest rate swaps or other interest rate hedging
products or foreign currency exchange agreements or exchange rate
hedging arrangements, (g) all obligations in respect of reimbursement
obligations under letters of credit, and (h) all liabilities of the type
referred to in clauses (a) through (g) above that are secured by any
lien, charge, security interest or encumbrance on any property owned by
such Person even though such Person has not assumed or otherwise become
liable for the payment thereof.
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241
"Indenture" means the Indenture dated _____________, 199_,
between Allied U.S. and the Trustee pursuant to which the Senior
Subordinated Debentures are issued.
"Person" means an individual, corporation, partnership,
association, joint stock company, limited liability company,
Governmental Entity, business trust, unincorporated organization, or
other legal entity.
"Representative" means at any date, with respect to the Credit
Facility, the Person or Persons then acting as the administrative agent
under the Credit Facility, with respect to the Senior Subordinated
Debentures, the Trustee, and with respect to any other Designated Senior
Indebtedness, the holders of such Designated Senior Indebtedness or any
Person acting as agent of such holders at such date.
"Senior Indebtedness" means principal of, and premium, if any,
and interest on (including interest that, but for the filing of a
petition initiating any Bankruptcy or Insolvency Proceeding, would
accrue on such obligations at the rate provided in the agreements or
instruments creating or evidencing the respective obligations, whether
or not such claim is allowed or allowable in such Bankruptcy or
Insolvency Proceeding) and all other amounts of every kind or nature
(including, but not limited to, fees, indemnities and expenses) due on
or in connection with any Indebtedness of the Guarantor, whether
outstanding on the date of this Guaranty or thereafter created,
incurred, assumed or Guaranteed by the Guarantor (including all
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing) unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant
to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to this Guaranty.
Without limiting the generality of the foregoing, "Senior Indebtedness"
shall include (a) all obligations and liabilities of every kind and
nature (including, but not limited to, fees, expenses and indemnities)
under the Credit Facility, the Senior Subordinated Debentures or the
Indenture, (b) all obligations and liabilities of every kind and nature
(including, but not limited to, fees, expenses and indemnities) in
respect of any interest rate swaps or other interest rate hedging
product entered into in connection with Indebtedness incurred or to be
incurred pursuant to the Credit Facility, and (c) any renewal,
extension, refinancing or rearrangement of any Indebtedness incurred or
to be incurred pursuant to the Credit Facility, the Senior Subordinated
Debentures or the Indenture. Notwithstanding the foregoing, Senior
Indebtedness shall not include (i) amounts owed (except to banks,
insurance companies and other financing institutions and except for
obligations under Financing Leases) for goods, materials, services or
operating lease rental payments in the ordinary course of business or
for compensation to employees of the Guarantor, (ii) any liability for
federal, state, provincial, local or other taxes owed or owing by the
Guarantor and (iii) Indebtedness with respect to Allied Finance's 7%
Junior Subordinated Debentures due 200__ dated the date hereof and the
Guaranty thereof by the Guarantor.
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242
"Senior Subordinated Debentures" means the ___% Senior
Subordinated Debentures due 200__(1) in the aggregate original principal
amount of at least $475,000,000 issued by Allied U.S. pursuant to the
Indenture.
"Subordinated Obligations" is defined in Subsection 3(a).
"Subsidiary" of a Person means another Person more than 50% of
the aggregate voting power (or of any other form of voting equity
interest in the case of a Person that is not a corporation) of which is
beneficially owned by that Person directly or indirectly through one or
more other Subsidiaries.
"Trustee" means ________________________________, a national
banking association, in its capacity as trustee under the Indenture, and
its successors in such capacity.
(b) Capitalized terms defined in this Guaranty are equally applicable
to both their singular and plural forms. References to a designated "Section"
or "Subsections" refer to a Section or Subsection of this Guaranty unless
otherwise specifically indicated. In this Guaranty "including" is used only to
indicate examples, without limitation to the indicated examples, and without
limiting any generality which precedes it.
2. Nature of Guaranty. Subject to the provision of Section 3 of
this Guaranty, the Guarantor agrees that (i) its obligations with regard to
this Guaranty shall be unconditional, irrespective of the validity, regularity
or enforceability of the Debenture, the absence of any action to enforce the
same, any delays in obtaining or realizing upon (or failures to obtain or
realize upon) collateral, the recovery of any judgment against the Company, any
action to enforce the same or any other circumstances that might otherwise
constitute a legal or equitable discharge or defense of a guarantor and (ii)
this Guaranty will not be discharged except by complete performance of the
obligations contained in the Debenture. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of Allied Finance, any right to require a proceeding
first against Allied Finance or right to require the prior disposition of the
assets of Allied Finance to meet its obligations, protest, notice and all
demands whatsoever and covenants that this Guaranty will not be discharged
except by complete performance of the obligations contained in the Debenture.
If Xxxxxxx is required by any court or otherwise to return to either Allied
Finance or any trustee or similar official acting with respect to Allied
Finance, any amount paid by Allied Finance to Xxxxxxx, this Guaranty, to the
extent theretofore discharged, shall be reinstated in full force and effect.
The Guarantor agrees that it will not be entitled to any right of subrogation
in relation to Xxxxxxx in respect of any obligations guaranteed hereby until
all such obligations have been paid in full in cash. The Guarantor agrees
that, subject to
------------------------
(1) The due date of the Senior Subordinated Debentures will be 10
years after the date of issuance.
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243
Section 3, (i) the maturity of the obligations guaranteed hereby may be
accelerated for the purposes of this Guaranty, notwithstanding any stay,
injunction or other prohibition preventing such acceleration as to Allied
Finance of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations, those obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantor for
the purpose of this Guaranty.
3. Subordination.
(a) The indebtedness evidenced by, and all obligations in
respect of, this Guaranty (collectively, the "Subordinated Obligations")
are expressly subordinate to all Senior Indebtedness to the extent and
in the manner set forth herein. For purposes hereof, the term
"subordinate" means that, unless and until the Senior Indebtedness has
been indefeasibly paid in full in cash, Xxxxxxx will not have the right
under any circumstance to, and will not, take, demand, commence any suit
or any other proceeding for collection, pursue any other judicial or
non-judicial remedy or receive from the Guarantor or any of its
Subsidiaries or Affiliates, and the Guarantor will not and will not
permit any of its Subsidiaries or Affiliates to, make, give, or permit,
directly or indirectly, by set-off, redemption, purchase or in any other
manner, any payment of or on account of the Subordinated Obligations;
provided, however, that at any time, the Guarantor may make, and Xxxxxxx
may receive, and Xxxxxxx may commence any suit or other proceeding for
collection of, payments of the Guaranteed Debt to the extent (but only
to the extent) that at such time Allied Finance is permitted to pay the
same pursuant to the provisions of Section 4 of the Debenture. In no
event shall the Guarantor be obligated to make, and the Guarantor shall
not make, and shall not permit any of its Subsidiaries or Affiliates to
make, directly or indirectly, by set-off, redemption, purchase or in any
other manner, any payments or prepayments of, or on account of, any of
the Subordinated Obligations during any Blockage Period or if such
payment or prepayment would cause the occurrence of a Blockage Period.
(b) Upon any payment or distribution of any kind or character
to creditors of the Guarantor (whether in cash, property or securities)
in (x) a total or partial liquidation, winding up or dissolution of the
Guarantor (whether voluntarily or involuntarily) or (y) in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating
to the Guarantor or its property, or in an assignment for the benefit of
creditors or any marshaling of the Guarantor's assets and liabilities
(any of the foregoing in clauses (x) and (y) being referred to herein as
a "Bankruptcy or Insolvency Proceeding"), the holders of Senior
Indebtedness will be entitled to receive payment in full in cash of all
the principal of and interest on and other amounts payable in respect of
such Senior Indebtedness (including interest accruing after the
commencement of any such proceeding at the rate specified in the
agreements or instruments creating or evidencing the applicable Senior
Indebtedness and whether or not such interest is an allowed or allowable
claim under applicable law) before Xxxxxxx will be entitled to receive
any payment with respect to this Guaranty (whether in cash,
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244
property or securities); and until all obligations with respect to
Senior Indebtedness are indefeasibly paid in full in cash, any
distribution received by Xxxxxxx or to which Xxxxxxx would be entitled
shall be paid over or made to the holders of Senior Indebtedness. Upon
the occurrence of any Bankruptcy or Insolvency Proceeding relating to
the Guarantor, the holders of the Senior Indebtedness are authorized and
empowered to (i) demand, xxx for, collect and receive every payment or
distribution on account of the Subordinated Obligations payable or
deliverable in connection with such event or proceeding and give
acquittance therefor, and (ii) file claims and proofs of claim in any
statutory or non-statutory proceeding and take such other actions as may
be necessary or desirable for the enforcement of the subordination
provisions of this Guaranty. Promptly after taking any action provided
in clauses (i) and (ii) above, the holders of Senior Indebtedness taking
such action shall give written notice thereof to the holder of this
Debenture; provided, however that failure to give such notice shall in
no event affect the validity of any action so taken.
(c) In the event that, notwithstanding the occurrence of any
of the events described in Subsections 3(a) and (b), any such payment or
distribution of assets of the Guarantor of any kind or character,
whether in cash, property or securities, shall be received by the holder
of this Guaranty which is not permitted hereby, such payment or
distribution shall be held in trust for the ratable benefit of, and
shall be paid over or delivered to, the holders of the Senior
Indebtedness.
(d) The holders of the Senior Indebtedness shall have no duty
or obligation to Xxxxxxx in any manner whatsoever and may, at any time
and from time to time, in their sole discretion, without the consent of
or notice to Xxxxxxx and without impairing or releasing any rights of
the holders of the Senior Indebtedness or any of the obligations of the
holder of this Guaranty hereunder, take any or all of the following
actions:
(i) change the amount, manner, place, terms of payment
or interest rate, change or extend the time of payment of, or
renew or alter, any of the Senior Indebtedness, or amend or
supplement or waive any of the terms of any instrument or
agreement now or hereafter executed pursuant to which any of the
Senior Indebtedness is issued or incurred;
(ii) sell, exchange, release, surrender, relend, realize
upon or otherwise deal with in any manner and in any order, any
property (or the income, revenues, profits or proceeds therefrom)
by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, any Senior Indebtedness;
(iii) release any person liable in any manner for the
payment or collection of the Senior Indebtedness;
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245
(iv) exercise or refrain from exercising any rights and
remedies against Allied Finance, the Guarantor or others, or
otherwise act or refrain from acting or, for any reason, fail to
file, record or otherwise perfect any security interest in or
lien on any property of Allied Finance, the Guarantor or any
other Person; and
(v) apply any sums received by the holders of the
Senior Indebtedness, by whomsoever paid and however realized, to
payment of the Senior Indebtedness in such manner as the holders
of the Senior Indebtedness, in their sole discretion, may deem
appropriate.
(e) Xxxxxxx and any future holder of this Guaranty, by
acceptance of this Guaranty, agree to provide to any holder of Senior
Indebtedness, at any time and from time to time, upon the written
request of the Guarantor or such holder of Senior Indebtedness, an
agreement signed by Xxxxxxx or such future holder of this Guaranty
addressed to the holder of such Senior Indebtedness in substantially the
form of, and on substantially the terms set out in, Exhibit A hereto to
the effect that such Person is a holder of Senior Indebtedness, that the
holder or holders of such Senior Indebtedness are entitled to the
benefits of Sections 3 and 4 of this Guaranty and that the holder or
holders of such Senior Indebtedness may enforce the terms and provisions
thereof to the same extent the Guarantor would be able to do so,
provided, however, that prior to furnishing such agreement, Xxxxxxx has
received from the Guarantor or such holder such information as Xxxxxxx
may reasonably request demonstrating to Xxxxxxx' reasonable satisfaction
that such Person is a holder of Senior Indebtedness. Xxxxxxx, and each
subsequent holder of this Guaranty, by acceptance of this Guaranty,
irrevocably appoint the Guarantor (with full power of substitution) as
its agent and attorney in fact (which appointment is coupled with an
interest and shall be irrevocable so long as any Senior Indebtedness is
outstanding) to execute and deliver on behalf and in the name of Xxxxxxx
or such holder, as the case may be, an agreement in substantially the
form of, and on substantially the terms set out in, Exhibit A hereto in
favor of each such holder of Senior Indebtedness and to take such
further action as may be necessary or appropriate to effectuate the
subordination as provided herein. Promptly after exercise of any such
power, Allied Finance will give written notice thereof to the holder of
the Debenture; provided, however, that failure to give such notice shall
in no event affect the validity of any power so exercised.
(f) Until all Senior Indebtedness has been indefeasibly paid
in full in cash, the holder of this Guaranty shall not be entitled to
assert, enforce or otherwise exercise any right of subrogation against
the Guarantor or any other Person obligated on the Subordinated
Obligations. After all Senior Indebtedness has been indefeasibly paid
in full in cash, and until the Subordinated Obligations have been so
paid in full, the holder of this Guaranty shall be subrogated to the
rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness. A distribution made under this
Section 3 to holders of Senior Indebtedness which otherwise would have
been made to
8
246
the holder of this Guaranty is not, as between the Guarantor and the
holder of this Guaranty, a payment by the Guarantor on Senior
Indebtedness.
(g) This Section 3 defines the relative rights of the holder
of this Guaranty and holders of Senior Indebtedness. Nothing in this
Guaranty shall:
(ii) impair, as between the Guarantor and the holder of
this Guaranty, the obligation of the Guarantor, which is absolute
and unconditional, to pay the Guaranteed Debt in accordance with
this Guaranty; or
(ii) except as otherwise set forth in this Section 3,
prevent the holder of this Guaranty from exercising its available
remedies hereunder, subject to the rights of holders of Senior
Indebtedness to receive distributions otherwise payable to such
holder.
4. No Impairment. Section 3 and this Section 4 (and all defined
terms used in such sections) shall constitute a continuing offer to all Persons
who become holders of, or continue to hold, Senior Indebtedness, and such
provisions are made for the benefit of the holders from time to time of Senior
Indebtedness, and such Persons are conclusively presumed to have relied upon
such provisions; and such holders are made obligees hereunder, and they or each
of them may enforce such provisions. No right of any present or future holder
of any Senior Indebtedness to enforce the subordination or other provisions
referred to in this Section 4 shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Guarantor or Xxxxxxx,
or by any non-compliance by the Guarantor or Xxxxxxx with the terms, provisions
and covenants of this Guaranty, regardless of any knowledge thereof any such
holder may have or otherwise be charged with. Section 3, this Section 4 and
the subordination and other provisions referred to in this Section 4 may not be
amended or modified in any manner which might terminate or impair the
subordination or such other provisions except with the prior written consent of
the Representatives of all the Designated Senior Indebtedness.
5. Binding Agreement. This Guaranty benefits Xxxxxxx and its
successors and permitted assigns and binds the Guarantor and its successors and
permitted assigns. Sections 3 and 4 and the other subordination provisions
hereof bind the Guarantor and Xxxxxxx and their respective successors and
assigns. The Guarantor acknowledges that the rights and benefits of this
Guaranty may be transferred with any permitted assignment of the Guaranteed
Debt.
6. Notices. All notices or other communications which are required
or may be given under this Guaranty shall be in writing and shall be deemed to
have been duly given when delivered in person or transmitted by telecopier
(with receipt confirmed) at the address or telecopy number set forth below (as
any such address or telecopier number may be changed from time to time by
notice similarly given):
9
247
(a) if to Xxxxxxx, to:
Xxxxxxx Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(b) if to the Guarantor, to:
Allied Waste Industries, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
7. Applicable Law. This Guaranty shall be governed by and
construed in accordance with the laws of the State of Delaware and the laws of
the United States of America applicable therein (without reference to the
conflicts of law principles thereof).
8. OFFSET. THE OBLIGATIONS OF THE GUARANTOR HEREUNDER ARE, IN ALL
RESPECTS, SUBJECT TO OFFSET AS MORE FULLY SET FORTH IN THE OFFSET LETTER
AGREEMENT. THE OFFSET RIGHTS SET FORTH IN THE OFFSET LETTER AGREEMENT SHALL BE
EFFECTIVE NOTWITHSTANDING THE ASSIGNMENT OR TRANSFER OF THIS GUARANTY BY
XXXXXXX AND ANY
10
248
TRANSFEREE SHALL TAKE THIS GUARANTY SUBJECT TO THE TERMS THEREOF.
ALLIED WASTE INDUSTRIES, INC.,
a Delaware corporation
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Agreed and Accepted:
XXXXXXX INC., a Canadian corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
11
249
EXHIBIT A
to the Guaranty Issued by
Allied Waste Industries, Inc. in favor of Xxxxxxx Inc.
[Date]
-------------------
-------------------
-------------------
Gentlemen:
Reference is made to the Zero Coupon Junior Subordinated Debenture Due
200__ dated __________, 199__ (the "Subordinated Debenture"), in the original
principal amount of $___________ issued by 3294862 Canada, Inc., a Canadian
corporation ("Allied Finance"), in favor of Xxxxxxx Inc., a Canadian
corporation ("Xxxxxxx"), the Guaranty dated the date hereof (the "Guaranty"),
issued by Allied Waste Industries, Inc., a Delaware corporation (the
"Guarantor"), in favor of Xxxxxxx with respect to the obligations under the
Subordinated Debenture, and the [describe Senior Indebtedness] (the "Subject
Indebtedness"), being issued contemporaneously herewith by the Guarantor in
favor of [identity of holder or holders of Subject Indebtedness] (whether one
or more, the "Senior Creditor"). Hereinafter, capitalized words and phrases
used herein which are defined in the Guaranty are used herein as therein
defined.
The undersigned (the "Subordinated Creditor") hereby represents and
warrants to the Senior Creditor that the Subordinated Creditor is the owner and
holder of the Subordinated Debenture and the Guaranty and that the Subordinated
Creditor is entitled to make the agreements herein contained. The Subordinated
Creditor hereby acknowledges and agrees that the principal of, and premium, if
any, and interest on (including interest that, but for the filing of a petition
initiating any Bankruptcy or Insolvency Proceeding would accrue on such
obligations at the time provided in the agreements or instruments creating or
evidencing the respective obligations, whether or not such claim is allowed in
such Bankruptcy or Insolvency Proceeding) and all other amounts of every kind
or nature (including, but not limited to, fees, indemnities and expenses and
any interest rate swaps or other interest rate hedging products entered into in
connection with the Subject Indebtedness) due on or in connection with the
Subject Indebtedness, whether outstanding on the date hereof or hereafter
created, incurred or assumed, guaranteed or in effect guaranteed by the
Guarantor (including all renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing) are in all respects Senior
Indebtedness, that the Senior Creditor (and any other Person who from time to
time is a holder of the Subject Indebtedness) is entitled to the benefits of
Sections 3 and 4 of the Guaranty and that the Senior Creditor (and any other
Person who from time to
A-1
250
time is a holder of the Subject Indebtedness) may enforce the terms and
provisions of Sections 3 and 4 of the Guaranty to the same extent that the
Guarantor or any other holder of Senior Indebtedness would be able to do so.
The Subordinated Creditor hereby agrees that the Subordinated Debenture
and the Guaranty will not be sold, assigned, transferred, pledged or
hypothecated in any manner, directly or indirectly, by the Subordinated
Creditor, unless the assignee, transferee, pledgee or hypothecate has agreed in
writing to be bound by the provisions of this agreement.
The Subordinated Creditor has executed this agreement in the space
provided below in order to induce the Senior Creditor to advance funds or
extend credit to the Guarantor, and this agreement is intended by the
Subordinated Creditor to be a binding and enforceable undertaking by the
Subordinated Creditor in favor of the Senior Creditor.
The rights credited hereby of the Senior Creditor and of any subsequent
holder of the Senior Indebtedness will be assigned automatically, and without
any further act, by the Senior Creditor or such holder upon any sale,
assignment, conveyance or other transfer of all or any part of the Senior
Indebtedness to the extent of the interest sold, assigned, conveyed or
otherwise transferred, unless and to the extent the Senior Creditor or such
holder expressly provides otherwise in the instrument pursuant to which such
interest is conveyed.
Very truly yours,
[NAME OF SUBORDINATED CREDITOR]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Accepted and agreed to as of
the date first above written:
[NAME OF SENIOR CREDITOR]
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
A-2
251
EXHIBIT I
OPINIONS OF POLARIS' U.S. COUNSEL
Subject to customary limitations and exceptions (e.g., including bankruptcy and
equitable principles and the right to rely on certificates from officers of
Xxxxxxx) to be agreed on:
(1) Each of PTI and the Acquired U.S. Subsidiaries is duly incorporated
and validly existing as a corporation in good standing under the laws
of the state of its incorporation as set forth in Section 4.5 of the
Polaris Disclosure Schedule to the Agreement.
(2) Each of PTI and the Acquired U.S. Subsidiaries has full corporate
power to carry on its business as it is now being conducted and to own
all of its material properties and assets. Each of the Acquired U.S.
Subsidiaries is duly qualified to do business in each jurisdiction in
which it conducts business, except where failure to be so qualified
will not have a Material Adverse Effect on any Acquired Subsidiary.
(3) The authorized, issued and outstanding capital stock of each Acquired
U.S. Subsidiary is as set forth in Section 4.5 of the Polaris
Disclosure Schedule. All issued and outstanding shares of capital
stock of each Acquired U.S. Subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable, and were not issued
in violation of any preemptive rights to purchase such shares.
(4) The U.S. Polaris Parties have full corporate power to execute and
deliver the Agreement to which they are a signatory and to consummate
the Acquisitions and other transactions contemplated therein. As used
in this opinion, the "Agreement" shall include all other agreements
and documents which appear as Exhibits to the Agreement or are entered
into in connection with the Agreement.
(5) The execution, delivery and performance by the U.S. Polaris Parties of
the Agreement to which they are signatory and the entry into and
performance of the Agreement and other transactions contemplated
therein have been duly authorized by all necessary corporate and
shareholder action on the part of the Polaris Parties.
(6) The Agreement has been duly executed by the U.S. Polaris Parties and
the Agreement constitutes a valid and binding obligation of the
Polaris Parties enforceable against them in accordance with its terms.
(7) The execution and delivery of the Agreement by the U.S. Polaris
Parties and the consummation of the Acquisitions and the other
transactions contemplated therein by PTI and the Acquired U.S.
Subsidiaries, individually or collectively, do not (a) constitute a
breach or violation of any federal law, rule or regulation of the
United States or under any law, rule or regulation of any state, nor
to our knowledge
252
constitute a default under any court order, judgment or decree of any
governmental or regulatory body of the United States or any state, to
which PTI or any of the Acquired U.S. Subsidiaries is subject or by
which any of their material properties or assets are bound or
affected, which breach, violation or default would have a Material
Adverse Effect on the business of any Acquired U.S. Subsidiary, or (b)
require any consent or approval of any other party under any federal
law, rule or regulation of the United States or under any law, rule or
regulation of any state to which PTI or any Acquired U.S. Subsidiary
is subject, except for required approvals set forth in or under the
Agreement or any schedules or exhibits to the Agreement, and those
consents or approvals, in respect of which the failure to obtain such
consents and approvals would not cause a Material Adverse Effect on
the business of any Acquired U.S. Subsidiary.
(8) The execution and delivery of the Agreement by the Polaris Parties did
not, and the consummation of the Acquisitions and other transactions
contemplated therein by PTI or any Acquired U.S. Subsidiary will not,
constitute a breach or violation of, or constitute a default (or any
event which with notice or lapse of time or both will become a
default) under (a) the certificate of incorporation or bylaws of PTI
or any Acquired U.S. Subsidiary or (b) except as indicated in the
Agreement or the exhibits or schedules or exhibits to the Agreement,
any material contract, lease, or instrument of which we have knowledge
to which PTI, any Acquired U.S. Subsidiary or any of their properties
or assets are bound or affected, in each case, which breach, violation
or default would have a Material Adverse Effect on any Acquired U.S.
Subsidiary.
(9) No actions, suits or proceedings are pending or, to our knowledge,
threatened which challenge the validity of the Agreement or any action
required to be taken by PTI or any Acquired U.S. Subsidiary pursuant
to the Agreement.
(10) The rights of Polaris under the Debentures have been effectively
subordinated to the rights of the holders of the Senior Indebtedness
to the extent set forth in the Debentures, and the subordination
provisions in the Debentures are binding and enforceable upon Polaris.
The opinion of Polaris' U.S. Counsel may be relied upon by the
Asteroid Parties, their counsel and the Persons providing financing pursuant to
the Commitment Letter and the Highly Confident Letter.
253
EXHIBIT J
OPINIONS OF POLARIS' CANADIAN COUNSEL
Subject to customary limitations and exceptions to be agreed on:
(1) Each of Polaris and the Acquired Canadian Subsidiaries is duly
incorporated and validly existing as a corporation in good standing
under the laws of the state of its incorporation as set forth in
Section 4.5 of the Polaris Disclosure Schedule to the Agreement.
(2) Each of Polaris and the Acquired Canadian Subsidiaries has full
corporate power to carry on its business as it is now being conducted
and to own all of its material properties and assets. Each of the
Acquired Canadian Subsidiaries is duly qualified to do business in
each jurisdiction in which it conducts business, except where failure
to be so qualified will not have a Material Adverse Effect on any
Acquired Subsidiary.
(3) The authorized, issued and outstanding capital stock of each Acquired
Canadian Subsidiary is as set forth in Section 4.5 of the Polaris
Disclosure Schedule. All issued and outstanding shares of capital
stock of each Acquired Canadian Subsidiary have been duly authorized
and validly issued, are fully paid and nonassessable, and were not
issued in violation of any preemptive rights to purchase such shares.
(4) The Polaris Parties have full corporate power to execute and deliver
the Agreement to which they are a signatory and to consummate the
Acquisitions and other transactions contemplated therein. As used in
this opinion, the "Agreement" shall include all other agreements and
documents which appear as Exhibits to the Agreement or are entered
into in connection with the Agreement.
(5) The execution, delivery and performance by the Polaris Parties of the
Agreement to which they are signatory and the entry into and
performance of the Agreement and other transactions contemplated
therein have been duly authorized by all necessary corporate and
shareholder action on the part of the Polaris Parties.
(6) The Agreement has been duly executed by the Polaris Parties and the
Agreement constitutes a valid and binding obligation of the Polaris
Parties enforceable against them in accordance with its terms.
(7) The execution and delivery of the Agreement by the Polaris Parties and
the consummation of the Acquisitions and the other transactions
contemplated therein by Polaris and the Acquired Canadian
Subsidiaries, individually or collectively, do not (a) constitute a
breach or violation of any federal law, rule or regulation of Canada
or under any law, rule or regulation of any province or territory of
Canada, nor, to our
254
knowledge, constitute a default under any court order, judgment or
decree of any governmental or regulatory body of Canada or any
province or territory of Canada, to which Polaris or any of the
Acquired Canadian Subsidiaries is subject or by which any of their
material properties or assets are bound or affected, which breach,
violation or default would have a Material Adverse Effect on the
business of any Acquired Canadian Subsidiary, or (b) require any
consent or approval of any other party under any federal law, rule or
regulation of Canada or under any law, rule or regulation of any
province or territory of Canada to which Polaris or any Acquired
Canadian Subsidiary is subject, except for required approvals set
forth in or under the Agreement or any schedules or exhibits to the
Agreement, and those consents or approvals, in respect of which the
failure to obtain such consents and approvals would not cause a
Material Adverse Effect on the business of any Acquired Canadian
Subsidiary.
(8) The execution and delivery of the Agreement by the Polaris Parties did
not, and the consummation of the Acquisitions and other transactions
contemplated therein by Polaris or any Acquired Canadian Subsidiary
will not, constitute a breach or violation of, or constitute a default
(or any event which with notice or lapse of time or both will become a
default) under (a) the certificate of incorporation or bylaws of
Polaris or any Acquired Canadian Subsidiary or (b) except as indicated
in the Agreement or the exhibits or schedules or exhibits to the
Agreement, any material contract, lease, or instrument to which
Polaris, any Acquired Canadian Subsidiary or any of their properties
or assets are bound or affected, in each case, which breach, violation
or default would have a Material Adverse Effect on any Acquired
Canadian Subsidiary.
(9) The business of each Acquired Subsidiary complies and has been
conducted in compliance with all applicable Laws, except for
violations or failures to comply, if any, that, individually or in the
aggregate, could not have a Material Adverse Effect on the Acquired
Subsidiaries.
(10) No actions, suits or proceedings are pending or, to our knowledge,
threatened which challenge the validity of the Agreement or any action
required to be taken by Polaris or any Acquired Canadian Subsidiary
pursuant to the Agreement.
(11) The rights of Polaris under the Debentures and the Guaranties have
been effectively subordinated to the rights of the holders of the
Senior Indebtedness to the extent set forth in the Debentures and the
Guaranties, and the subordination provisions in the Debentures and the
Guaranties are binding and enforceable upon Polaris.
The opinion of Polaris' Canadian Counsel may be relied upon by the
Asteroid Parties, their counsel and the Persons providing financing pursuant to
the Commitment Letter and the Highly Confident Letter.
255
EXHIBIT K
OPINIONS OF ALLIED'S U.S. COUNSEL
Subject to customary limitations and exceptions to be agreed on:
(1) Each of Allied and Allied U.S. is duly incorporated and validly
existing as a corporation in good standing under the laws of the State
of Delaware.
(2) Each of Allied and Allied U.S. has full corporate power to carry on
its business as it is now being conducted and to own all of its
material properties and assets. Each of Allied and Allied U.S. is
duly qualified to do business in each jurisdiction in which it
conducts business, except where the failure to be so qualified will
not have a Material Adverse Effect on Allied or Allied U.S. Allied
U.S. has had no prior operations other than in connection with the
Agreement and the transactions contemplated therein.
(3) The Allied Parties have full corporate power to execute and deliver
the Agreement to which they are a signatory and to consummate the
Acquisitions and other transactions contemplated therein. As used in
this opinion, the "Agreement" shall include all other agreements and
documents which appear as Exhibits to the Agreement or are entered
into in connection with the Agreement.
(4) The execution, delivery and performance by the Allied Parties of the
Agreement to which they are signatory and the entry into and
performance of the Agreement and other transactions contemplated
therein have been duly authorized by all necessary corporate and
shareholder action on the part of the Allied Parties.
(5) The Agreement has been duly executed by the Allied Parties and the
Agreement constitutes a valid and binding obligation of the Allied
Parties enforceable against them in accordance with its terms.
(6) The execution and delivery of the Agreement by the Allied Parties and
the consummation of the Acquisitions and the other transactions
contemplated therein by Allied and Allied U.S., individually or
collectively, do not (a) constitute a breach or violation of any
federal law, rule or regulation of the United States or under any law,
rule or regulation of any state, nor constitute a default under any
court order, judgment or decree of any governmental or regulatory body
of the United States or any state, to which Allied or Allied U.S. is
subject or by which any of their material properties or assets are
bound or affected, which breach, violation or default would have a
Material Adverse Effect on the business of Allied or Allied U.S., or
(b) require any consent or approval of any other party under any
federal law, rule or regulation of the United States or under any law,
rule or regulation of any state to which Allied or Allied U.S.
256
is subject, except for required approvals set forth in or under the
Agreement or any schedules or exhibits to the Agreement, and those
consents or approvals, in respect of which the failure to obtain such
consents and approvals would not cause a Material Adverse Effect on
the business of Allied or Allied U.S.
(7) The execution and delivery of the Agreement by the Allied Parties did
not, and the consummation of the Acquisitions and other transactions
contemplated therein by Allied and Allied U.S. will not, constitute a
breach or violation of, or constitute a default (or any event which
with notice or lapse of time or both will become a default) under (a)
the certificate of incorporation or bylaws of Allied or Allied U.S. or
(b) except as indicated in the Agreement or the exhibits or schedules
or exhibits to the Agreement, any material contract, lease, or
instrument to which Allied or Allied U.S. or any of their properties
or assets are bound or affected, in each case, which breach, violation
or default would have a Material Adverse Effect on Allied or Allied
U.S.
(8) The shares of Allied Common Stock and the shares of Allied Common
Stock for which the Allied Warrants are exercisable, are (or will be
when issued) validly issued, fully paid and non-assessable shares of
Allied Common Stock.
(9) No actions, suits or proceedings are pending or, to our knowledge,
threatened which challenge the validity of the Agreement or any action
required to be taken by Allied or Allied U.S. pursuant to the
Agreement.
The opinion of Allied's U.S. Counsel may be relied upon by the Polaris
Parties, their counsel and the Persons providing financing pursuant to the
Commitment Letter and the Highly Confident Letter.
2
257
EXHIBIT L
OPINIONS OF ALLIED'S CANADIAN COUNSEL
Subject to customary limitations and exceptions to be agreed on:
(1) Each of Allied Canada and Allied Finance is duly incorporated and
validly existing as a corporation in good standing under the laws of
Canada.
(2) Each of Allied Canada and Allied Finance has full corporate power to
perform its obligations under the Agreements to which it is a party.
Each of Allied Canada and Allied Finance is duly qualified to do
business in each jurisdiction in which it conducts business.
(3) Each of Allied Canada and Allied Finance has full corporate power to
execute and deliver the Agreements to which it is a signatory and to
perform its obligations thereunder. As used in this opinion, the
"Agreements" shall mean the Stock Purchase Agreement, all other
agreements which appear as Exhibits to the Agreement.
(4) The execution, delivery and performance by each of Allied Canada and
Allied Finance of the Agreements to which it is a signatory and the
performance by it of its obligations thereunder have been duly
authorized by all necessary corporate action on the part of such
Allied Party.
(5) Assuming that each of the Agreements is governed by the laws of the
Province of Ontario, each of the Agreements has been duly executed by
each of Allied Canada and Allied Finance that is a signatory thereto
and each Agreement constitutes a legal, valid and binding obligation
of each such Allied Party enforceable against each such Allied Party
by such Xxxxxxx Party that is a party thereto in accordance with its
terms.
(6) The execution and delivery of the Agreements to which they are
signatories by each of Allied Canada and Allied Finance and the
performance of its obligations thereunder do not (a) constitute a
breach or violation of any federal law, rule or regulation of Canada
or under any law, rule or regulation of any province or territory of
Canada, nor constitute a default under any court order, judgment or
decree of any governmental or regulatory body of Canada or any
province or territory of Canada, to which Allied Canada or Allied
Finance is subject or by which any of their material properties or
assets are bound or affected,
(7) The execution and delivery by each of Allied Canada and Allied Finance
of the Agreements to which it is a signatory by performance by it of
its obligations thereunder do not and will not constitute a breach or
violation of, or constitute a default (or any
1
258
event which with notice or lapse of time or both will become a
default) under (a) the certificate or articles of incorporation or
bylaws of Allied Canada or Allied Finance or (b) except as indicated
in the Agreement or the exhibits or schedules or exhibits to the
Agreement, any material contract, lease, or instrument to which Allied
Canada or Allied Finance or any of their properties or assets are
bound or affected, and which is listed below on this Exhibit L.
(8) We have not been retained by Allied Canada or Allied Finance to
represent either of them in connection with any action, suit or
proceeding which challenges the validity of the Agreement or any
action required to be taken by Allied Canada or Allied Finance
pursuant to the Agreement.
The opinion of Allied's Canadian Counsel may be relied upon by the
Polaris Parties, their counsel and the Persons providing financing pursuant to
the Commitment Letter and the Highly Confident Letter.
2
259
EXHIBIT M
[Form of Debenture Exchange Agreement]
[Date]
Xxxxxxx Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 348
Gentlemen:
Reference is made to the Stock Purchase Agreement dated as of
September __, 1996 (the "Stock Purchase Agreement"), among Allied Waste
Industries, Inc., a Delaware corporation, 3294862 Canada Inc., a Canadian
corporation, Allied Waste Holdings (U.S.), Inc., a Delaware corporation,
Xxxxxxx Inc., a Canadian corporation ("Xxxxxxx"), Xxxxxxx Transportation, Inc.,
a Delaware corporation, Xxxxxxx Waste Systems, Inc., Xxxxxxx Waste Systems
(U.S.), Inc., a Delaware corporation, and Xxxxxxx Medical Services Ltd., a
Canadian corporation. Hereinafter, capitalized words and phrases used herein
which are defined in the Stock Purchase Agreement are used herein as therein
defined.
Pursuant to Section 2.3 of the Stock Purchase Agreement, as part of
the consideration for the purchase of LWSC, Allied Canada has agreed to issue
to Xxxxxxx at the Closing the Allied Canada 7% Debenture and the Allied Canada
Zero Coupon Debenture (collectively referred to as the "Allied Canada
Debentures"). Xxxxxxx and the undersigned ("Allied Finance") hereby agree
that, immediately following the delivery by Allied Canada of the Allied Canada
Debentures, Allied Finance will purchase from Xxxxxxx, and Xxxxxxx will sell
and transfer to Allied Finance, at the Closing, the Allied Canada Debentures.
In consideration of the sale by Xxxxxxx of the Allied Canada Debentures, Allied
Finance will issue to Xxxxxxx the 7% Junior Subordinated Debenture due 200_ in
substantially the form of Exhibit B-1 to the Stock Purchase Agreement and the
Zero Coupon Junior Subordinated Debenture due 200_ in substantially the form of
Exhibit B-2 to the Stock Purchase Agreement.
260
Please execute the enclosed copy of this letter in the space provided
below to indicate your agreement to the terms herein set forth.
Very truly yours,
3294854 CANADA INC.
By:
----------------------------
Title:
-------------------------
ACCEPTED AND AGREED TO
as of the date
first written above.
XXXXXXX INC.
By:
-----------------------
Title:
--------------------
261
EXHIBIT N
[date]
Xxxxxxx Inc.
Xxxxxxx Transportation, Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Gentlemen:
Reference is made to the Stock Purchase Agreement dated September 17,
1996 (the "Stock Purchase Agreement"), among you, the undersigned and certain
other parties named therein and to the 7% Junior Subordinated Debentures due
200_ and the Zero Coupon Junior Subordinated Debentures due 200_ issued by
Allied Finance as provided in Section 2.3 of the Stock Purchase Agreement.
Capitalized words and phrases used herein which are defined in the Stock
Purchase Agreement are used herein as therein defined.
In the event any Allied Party or any Acquired Subsidiary suffers any
Damages arising out of or in respect of the matters referred to in clauses (i)
and (ii) of Section 14.1 of the Stock Purchase Agreement because of any tax
deficiencies (including penalties and interest) that Xxxxxxx is ultimately
required to pay for any period prior to the Closing based on the matters
referred to in the third paragraph of the "Legal Proceedings" portion of Note
16 of the Notes to Financial Statements contained in the 1995 Annual Report of
Xxxxxxx, , and the Xxxxxxx Sellers fail to indemnify the Allied Parties and the
Acquired Subsidiaries against, and to hold the Allied Parties and the Acquired
Subsidiaries harmless from, any such matter or matters, and such failure
continues for 30 days after written notice from Allied or the affected Allied
Party or Acquired Subsidiary as provided in Article XIV of the Stock Purchase
Agreement, Xxxxxxx hereby agrees that, at the option of Allied
262
Finance, the obligations of Allied Finance may be reduced pro tanto and offset
against the obligations of the Xxxxxxx Sellers to provide such indemnity.
Very truly yours,
Allied Waste Industries, Inc.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
3294854 CANADA INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ACCEPTED AND AGREED
to as of the date
first above written.
XXXXXXX INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
N-2
263
XXXXXXX TRANSPORTATION, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
N-3
