EXHIBIT 1
SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
This Second Amended and Restated Shareholders Agreement, dated
as of July 30, 1999 (this "Agreement"), by and between Allied Waste Industries,
Inc., a Delaware corporation (the "Company"), on the one hand, and Apollo
Investment Fund IV, L.P., a Delaware limited partnership ("AIF IV"), Apollo
Investment Fund III, L.P., a Delaware limited partnership ("AIF III"), Apollo
Overseas Partners IV, L.P., a Delaware limited partnership ("AOP IV"), Apollo
Overseas Partners III, L.P., a Delaware limited partnership ("AOP III"), Apollo
(U.K.) Partners III, L.P., an English limited partnership ("AUK III"), Apollo/AW
LLC, a Delaware limited liability company ("AAW"), Blackstone Capital Partners
II Merchant Banking Fund L.P., a Delaware limited partnership ("BCP II"),
Blackstone Capital Partners III Merchant Banking Fund L.P., a Delaware limited
partnership ("BCP"), Blackstone Offshore Capital Partners III L.P., a Cayman
Islands limited partnership ("BOC III"), Blackstone Offshore Capital Partners II
L.P., a Cayman Islands limited partnership ("BOC II"), Blackstone Family
Investment Partnership III L.P., a Delaware limited partnership ("BFP III"), and
Blackstone Family Investment Partnership II L.P., a Delaware limited partnership
("BFP II"), Greenwich Street Capital Partners II, L.P., a Delware limited
partnership, GSCP Offshore Fund, L.P., a Cayman Islands exempted limited
partnership, Greenwich Fund, L.P., a Delaware limited partnership, Greenwich
Street Employees Fund, L.P., a Delaware limited partnership, TRV Executive Fund,
L.P., a Delaware limited partnership, DLJMB Funding II, Inc., a Delaware
corporation, DLJ Merchant Banking Partners II, L.P., a Delaware limited
partnership, DLJ Merchant Banking Partners II-A, L.P., a Delaware limited
partnership, DLJ Diversified Partners, L.P., a Delaware limited partnership, DLJ
Diversified Partners-A, L.P., a Delaware limited partnership, DLJ Millennium
Partners, L.P., a Delaware limited partnership, DLJ Millennium Partners-A, L.P.,
a Delaware limited partnership, DLJ First ESC L.P., a Delaware limited
partnership, DLJ Offshore Partners II, C.V., a Netherlands Antilles limited
partnership, DLJ EAB Partners, L.P., a Delaware limited partnership, and DLJ ESC
II L.P., a Delaware limited partnership (collectively, the "Shareholders"), on
the other hand, amending and restating in its entirety the Amended and Restated
Shareholders Agreement dated as of April 21, 1997 (the "Original Agreement"), by
and between the Company, on the one hand, and certain of the Shareholders, on
the other hand.
Page 72 of 112
WHEREAS, certain of the Shareholders purchased an aggregate of
11,776,765 shares (the "TPG Group Block") of the Company's common stock, par
value $.01 per share (the "Common Stock"), from TPG Partners, L.P., a Delaware
limited partnership, and TPG Parallel I, L.P., a Delaware limited partnership,
and an aggregate of 14,600,000 shares of Common Stock (the "Xxxxxxx Block" and
together with the TPG Group Block, the "Shares") from Xxxxxxx, Inc., a Canadian
corporation;
WHEREAS, under the Original Agreement, the Company granted to
certain of the Shareholders the right as a group to appoint certain designees
for election to the Board of Directors of the Company and those Shareholders
agreed to certain restrictions on the acquisition and disposition of Common
Stock and the conduct of such Shareholders with respect to the Company;
WHEREAS, simultaneously with the execution of this Agreement,
certain of the Shareholders are entering into (i) a Preferred Stock Purchase
Agreement (the "Preferred Stock Purchase Agreement") pursuant to which, upon the
terms and subject to the conditions set forth in the Purchase Agreement, certain
of the Shareholders shall purchase an aggregate of 1,000,000 shares of Senior
Convertible Preferred Stock, par value $.10 per share, of the Company ("Senior
Preferred Stock"), which shall be convertible into either shares of Series A
Junior Preferred Stock, par value $.10 per share, of the Company ("Junior
Preferred Stock"), or shares of Common Stock, and (ii) an Amended and Restated
Registration Rights Agreement (the "Registration Rights Agreement") granting
certain registration rights; and
WHEREAS, in recognition of Shareholders' significant change in
ownership in the Company upon the closing of the purchase of the Senior
Preferred Stock pursuant to the Preferred Stock Purchase Agreement, the parties
desire to amend and restate the Original Agreement in its entirety (except as
may be otherwise set forth herein) as set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement, the Preferred Stock Purchase Agreement,
and in the Amended and Restated Registration Rights Agreement and intending to
be legally bound hereby, the parties agree as follows, effective upon the
closing of the purchase of the Senior Preferred Stock pursuant to the Preferred
Stock Purchase Agreement:
ARTICLE 1
---------
Definitions; Representations and Warranties
-------------------------------------------
SECTION 1.1 Definitions. Unless otherwise specified all
references to "days" shall be deemed to be references to calendar days. For
purposes of this Agreement, the following terms shall have the following
meanings:
Page 73 of 112
"Actual Voting Power" shall mean, as of the date of
determination, the total voting power of all the then outstanding securities of
the Company at the time then entitled to vote for the general election of
directors, without giving effect to securities issuable upon exercise or
conversion of such outstanding securities. (When issued, shares of Senior
Preferred Stock and Junior Preferred Stock shall be deemed to be outstanding
securities then entitled to vote for the general election of directors and (i)
each share of Senior Preferred Stock will be deemed, as of the date of
determination, to have the number of votes that would be represented by the
number of shares of Common Stock into which such share of Senior Preferred Stock
pursuant to its terms would otherwise be convertible and (ii) each share of
Junior Preferred Stock will be deemed, as of the date of determination, to have
the number of votes that would otherwise be represented by the number of shares
of Common Stock in lieu of whose issuance such share of Junior Preferred Stock
is issued.)
"Affiliate" of a Person shall have the meaning set forth in
Rule 12b-2 of the Exchange Act as in effect on the date of this Agreement, but
shall not include (i) any investment fund in which a Person has invested if the
Person does not otherwise control the investment fund or have, directly or
indirectly, voting or dispositive power over any securities owned by such fund
or (ii) any investor or limited partner of any Person who does not otherwise
have voting or dispositive power over securities owned by that Person and is not
controlled by that Person. It is expressly intended that any Person who now or
hereafter controls, directly or indirectly, any Shareholder (other than an
Exempt Affiliate) shall be subject to the restrictions of Section 2.1 as if it
were a Shareholder.
"Apollo/Blackstone Shareholders" mean those Shareholders who
are affiliated with either Apollo Advisors II, L.P., Apollo Management IV, L.P.
or Blackstone Management Associates II L.L.C., including, but not limited to,
AIF III, AOP III, AUK III, AIF IV, AOP IV, AAW, BCP, BOC III, BFP III, BCP II,
BOC II and BFP II.
"Apollo/Blackstone Shares" means the TPG Group Block, the
Xxxxxxx Block, the 790,000 shares of Senior Preferred Stock to be sold to the
Apollo/Blackstone Shareholders pursuant to the Preferred Stock Purchase
Agreement and any shares of Common Stock or Junior Preferred Stock issued upon
conversion of such 790,000 shares of Senior Preferred Stock or of such Junior
Preferred Stock.
"Beneficial ownership" by a Person of any Voting Securities
shall be determined in accordance with the term "beneficial ownership" as
defined in Rule 13d-3 under the Exchange Act as in effect on the date of this
Agreement and, in addition, "beneficial ownership" shall include securities
which such Person has the right to
Page 74 of 112
acquire (irrespective of whether such right is exercisable immediately or only
after the passage of time, including the passage of time in excess of sixty (60)
days) pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants or options, or
otherwise. For purposes of this Agreement, a Shareholder shall be deemed to
beneficially own any Voting Securities beneficially owned by its Affiliates or
any Group of which such Shareholder or any such Affiliate is a member.
"Board of Directors" shall mean the Board of Directors of the
Company.
"Commission" shall mean the Securities and Exchange
Commission.
"Conversion Shares" shall mean the shares of Junior Preferred
Stock or shares of Common Stock into which shares of Senior Preferred Stock or
Junior Preferred Stock have been converted.
"DLJ Parent Entities" mean and includes Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, Xxxxxxxxx, Lufkin & Xxxxxxxx Inc., DLJdirect
Inc. Pershing Trading, L.P., Autranet Inc. and any Person that, directly or
indirectly, controls Xxxxxxxxx, Xxxxxx & Xxxxxxxx Inc.
"DLJ Shareholders" shall mean DLJMB Funding II, Inc., DLJ
Merchant Banking Partners II, L.P., DLJ Merchant Banking Partners II-A, L.P.,
DLJ Diversified Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium
Partners, L.P., DLJ Millennium Partners-A, L.P., DLJ First ESC L.P., DLJ
Offshore Partners II, C.V., DJL EAB Partners, L.P. and DLJ ESC II L.P.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Greenwich Street Parent Entities" means and includes
CitiGroup and Xxxxxxx Xxxxx Barneyand any Person or Group that, directly or
indirectly, controls CitiGroup.
"Greenwich Street Shareholders" shall mean Greenwich Street
Capital Partners II, L.P., GSCP Offshore Fund, L.P., Greenwich Fund, L.P.,
Greenwich Street Employees Fund, L.P. and TRV Executive Fund, L.P.
"Group" shall mean a "group" as such term is used in Section
13(d)(3) of the Exchange Act as in effect on the date of this Agreement.
"Laws" shall mean all applicable foreign, federal, state and
local laws, statutes, rules, regulations, codes and ordinances.
Page 75 of 112
"Person" shall mean any individual, Group, corporation,
general or limited partnership, limited liability company, governmental entity,
joint venture, estate, trust, association, organization or other entity of any
kind or nature.
"Related Person" means, with respect to any Person, (A) any
Affiliate of such Person, (B) any investment manager, investment advisor or
partner of such Person or an Affiliate of such Person, and (C) any investment
fund, investment account or investment entity whose investment manager,
investment advisor or general partner is such Person or a Related Person of such
Person; provided, however, that "Related Person" shall mean with respect to any
DLJ Shareholder, (I) any general or limited partner of such DLJ Shareholder (a
"DLJ Partner"), (II) any corporation, partnership or other entity which is an
Affiliate of such DLJ Shareholder or of any DLJ Partner (collectively, the "DLJ
Affiliates"), (III) any managing director, general partner, director, limited
partner, officer or employee of (x) such DLJ Shareholder, (y) such DLJ Partner
or (z) any DLJ Affiliate of such DLJ Partner or a DLJ Affiliate, or the heirs,
executors, administrators, testamentary trustees, legatees or beneficiaries of
any of the foregoing Persons referred to in this clause (III) (collectively,
"DLJ Associates"), (IV) any trust, the beneficiaries of which, or a corporation,
limited liability company or partnership, the stockholders, members or general
or limited partners of which, include only such XXX Xxxxxxxxxxx, XXX Xxxxxxxxxx,
XXX Associates, their spouses or their lineal descendants, and (V) a voting
trustee for one or more DLJ Shareholders, DLJ Affiliates or DLJ Associates.
"Reorganization Transaction" means: (i) any merger,
consolidation, recapitalization, liquidation or other business combination
transaction involving the Company; (ii) any tender offer or exchange offer for
any securities of the Company; or (iii) any sale or other disposition of assets
of the Company or any of its Subsidiaries in a single transaction or in a series
of related transactions in each of the foregoing cases constituting individually
or in the aggregate 10% or more of the assets or Voting Securities (as
applicable) of the Company.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shareholder Designee" shall mean a person designated for
election to the Board of Directors by the Apollo/Blackstone Shareholders as
provided in Section 3.1.
"Total Voting Power" shall mean the total combined Voting
Power, on a fully diluted basis, of all the Voting Securities then outstanding.
"Voting Power" shall mean, as of the date of determination,
the voting power in the general election of directors of the Company, and shall
be calculated for
Page 76 of 112
each Voting Security by reference to the maximum number of votes such Voting
Security is or would be entitled to cast in the general election of directors,
and, in the case of convertible (or exercisable or exchangeable) securities, by
reference to the maximum number of votes such Voting Security would be entitled
to cast in unconverted or converted (or exercised, unexercised, exchanged or
unexchanged) status. For purposes of determining Voting Power under this
Agreement, a Voting Security which is convertible into or exchangeable for a
Voting Security shall be counted as having the greater of (i) the number of
votes to which such Voting Security is entitled prior to conversion or exchange
and (ii) the number of votes to which the Voting Security into which such Voting
Security is convertible or exchangeable is entitled. Notwithstanding anything
else to the contrary contained in this Agreement, there shall not be included in
calculating Voting Power any votes which a Person shall have upon and by reason
of the non-payment of dividends on preferred shares in accordance with the terms
of such preferred shares.
"Voting Securities" shall mean (x) any securities entitled, or
which may be entitled, to vote generally in the election of directors of the
Company (including, when issued, shares of Senior Preferred Stock and Junior
Preferred Stock), (y) any securities convertible or exercisable into or
exchangeable for such securities (whether or not the right to convert, exercise
or exchange is subject to the passage of time or contingencies or both), or (z)
any direct or indirect rights or options to acquire any such securities;
provided that unexercised options granted pursuant to any employment benefit or
similar plan and rights issued pursuant to any shareholder rights plan shall be
deemed not to be "Voting Securities" (or to have Voting Power).
In addition, the following terms have the definitions
specified in the Sections noted:
Term Section
---- -------
AIF IV recitals
AIF III recitals
AOP IV recitals
AOP III recitals
AUK III recitals
AAW recitals
Actual Voting Power Threshold 3.1(b)
Agreement recitals
BCP recitals
BCP II recitals
BOC III recitals
BOC II recitals
BFP III recitals
BFP II recitals
Beneficial Ownership Threshold 3.1(b)
Common Stock recitals
Page 77 of 112
Company recitals
Credit Agreement 1.2(e)
Disposition 4.1
Exempt Affiliate 2.1
Future Major Investor 2.3
HSR Act 1.2(c)
Information 3.4
Junior Preferred Stock recitals
Xxxxxxx Block recitals
Xxxxxxx recitals
Management Directors 3.1(b)
Material Adverse Effect 1.2(b)
Moving Party 5.3
Nominating Committee 3.1(b)
Original Agreement recitals
Preferred Stock Purchase Agreement recitals
Purchase Date 4.1(b)
Registration Rights Agreement recitals
Related Transferee 4.1(f)
Representatives 5.13
Rule 144 Sale 4.1(c)
Senior Preferred Stock recitals
Shareholder Designee Period 3.1(b)
Shareholders recitals
Shares recitals
Specific Rights 5.13
Standstill Period 2.1
TPG Group Block recitals
Unaffiliated Directors 3.1(b)
SECTION 1.2. Representations and Warranties of the Company.
The Company represents and warrants to Shareholders as follows:
(a) The execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby are within its corporate powers and have been duly
authorized by all necessary corporate action on its part. This Agreement
constitutes a legal, valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, subject, as to enforcement, to
bankruptcy, and insolvency, fraudulent transfer reorganization, moratorium and
similar laws of general applicability relating to or affecting creditor's rights
and to general equity principles.
(b) The execution, delivery and performance of this Agreement
by the Company does not and will not (i) contravene or conflict with or
constitute a default under the Company's Certificate of Incorporation or Bylaws,
(ii) contravene or conflict with or constitute a default under any agreement to
which the Company is a party or is bound, or result in a breach of or default
under any instrument or agreement to which
Page 78 of 112
the Company is a party or is bound, which violation, breach or default would
have a material adverse effect on the Company's business taken as a whole or
would adversely affect the consummation of the transactions contemplated by this
Agreement or the Preferred Stock Purchase Agreement (a "Material Adverse
Effect"), (iii) violate any judgment, order, injunction, decree or award against
or binding upon the Company as of the date of this Agreement, the violation of
which, individually or in the aggregate, would have a Material Adverse Effect,
(iv) violate any Law relating to the Company, the violation of which,
individually or in the aggregate, would have a Material Adverse Effect or (v)
constitute a "change of control," or result in the acceleration of rights, under
any material debt instrument to which the Company is a party.
(c) Except for applicable requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act")
and the Exchange Act or as disclosed in the Preferred Stock Purchase Agreement,
the Company is not required to make any filing or registration with, or obtain
any permit, authorization, consent or approval of, any governmental entity or
any other Person in connection with this Agreement, the Preferred Stock Purchase
Agreement, or any of the transactions contemplated hereby and thereby.
(d) As of the date of this Agreement, there is no action, suit
or proceeding pending or, to the knowledge of the Company, threatened against
the Company that relates to this Agreement, the Preferred Stock Purchase
Agreement, or any of the transactions contemplated hereby or thereby.
(e) As of the date hereof, the Company would be entitled to
make at least $1.00 in additional borrowings under the Credit Agreement (the
"Credit Agreement") among the Company, Allied Waste North America, Inc., the
lenders party thereto, The Chase Manhattan Bank, as Administrative Agent,
Collateral Agent and Collateral Trustee, Citicorp USA, Inc., as Syndication
Agent, Credit Suisse First Boston and DLJ Capital Funding, Inc., as
Documentation Agents, and the consummation of the transactions contemplated by
the Amended and Restated Agreement and Plan of Merger, dated as of May 21, 1999,
among Xxxxxxxx - Xxxxxx Industries, Inc., the Company and AWINI Acquisition
Corporation and this Agreement will not, by itself, limit the Company's ability
to borrow under the Credit Agreement.
(f) All documents which have been filed by the Company with
the Commission under the Exchange Act, at the time they were filed with the
Commission, conformed in all material respects with the requirements of Exchange
Act, and the rules and regulations of the Commission thereunder, and, as of the
date thereof and taken as a whole as of the date hereof do not contain an untrue
statement of a material
Page 79 of 112
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
SECTION 1.3. Representations and Warranties of Shareholder.
Each Shareholder severally, but not jointly, represents and warrants to the
Company as follows:
(a) The execution, delivery and performance by such
Shareholder of this Agreement and the consummation by such Shareholder of the
transactions contemplated by this Agreement are within its powers and have been
duly authorized by all necessary action on its part. This Agreement constitutes
a legal, valid and binding agreement of such Shareholder enforceable against
such Shareholder in accordance with its terms, subject, as to enforcement, to
bankruptcy, and insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditor's rights
and to general equity principles.
(b) The execution, delivery and performance of this Agreement
by such Shareholder does not and will not contravene or conflict with or
constitute a default under such Shareholder's partnership agreement or similar
governing documents.
(c) As of the date of this Agreement, such Shareholder does
not beneficially own any Voting Securities except (i) any Voting Securities
beneficially owned on the date hereof in compliance with the Original Agreement
and (ii) to the extent such shares may be deemed to be beneficially owned, the
shares of Senior Preferred Stock which are subject to the Preferred Stock
Purchase Agreement.
ARTICLE 2
---------
Standstill
----------
SECTION 2.1. Standstill. (a) Until the earliest to occur of
(A) the tenth anniversary of the purchase of the Senior Preferred Stock pursuant
to the Preferred Stock Purchase Agreement, (B) the date on which the
Apollo/Blackstone Shareholders own, collectively, Voting Securities which would
represent (i) less than 10% of the Total Voting Power, excluding voting
securities beneficially owned by the Shareholders other than the
Apollo/Blackstone Shareholders and (ii) less than 10% of the Actual Voting
Power, excluding voting securities beneficially owned by the Shareholders other
than the Apollo/Blackstone Shareholders; provided that the Shareholders at such
time are entitled to designate not more than one director pursuant to Article 3
hereof, and (C) termination under Section 2.2 (such period, the "Standstill
Period") (provided that the Standstill Period shall end (x) with respect to the
DLJ Shareholders, on the date on which the DLJ Shareholders no longer own any
shares of Senior Preferred Stock or any Conversion Shares, and (y) with respect
to the Greenwich Street Shareholders, on the date on which the Greenwich Street
Shareholders no longer own
Page 80 of 112
any shares of Senior Preferred Stock or any Conversion Shares), each Shareholder
will not, and will cause each of its Affiliates (other than Exempt Affiliates)
not to, directly or indirectly:
(i) acquire, offer to acquire, or agree to acquire,
by purchase or otherwise, any Voting Securities or voting rights or
direct or indirect rights or options to acquire any Voting Securities
of the Company or any of its Affiliates other than (A) the exercise of
convertible securities acquired in compliance with the terms of this
Agreement (including the acquisition of shares of Common Stock or
Junior Preferred Stock upon conversion of shares of Senior Preferred
Stock), or an acquisition as a result of a stock split, stock dividend
or similar recapitalization, (B) the acquisition of shares of Senior
Preferred Stock which are subject to the Preferred Stock Purchase
Agreement, (C) with the prior written consent of the chairman of the
Board of Directors and the chief executive officer of the Company,
acquisitions by the Apollo/Blackstone Shareholders of up to a
collective aggregate amount of 3,000,000 shares (as such number may be
appropriately adjusted to reflect stock splits, reverse stock splits,
stock dividends or any other recapitalization of the Company) of Common
Stock, (D) stock options or similar rights granted by the Company to an
Affiliate of such Shareholder as compensation for performance as a
director or officer of the Company or its subsidiaries (and any shares
issuable upon exercise thereof), (E) transfers between such Shareholder
and Related Transferees as permitted under Section 4.1(f) or (F) any
rights which are granted to all shareholders of the Company (and any
shares issuable upon exercise thereof); provided, however, that if the
Shareholders or any of their Affiliates in good faith inadvertently
acquire not more than 500,000 shares of Common Stock in violation of
these provisions and within 15 days after the first date on which the
Shareholders have actual knowledge (including by way of written notice
given by the Company) that a violation has occurred Shareholders or any
of their Affiliates shall have transferred any shares of Common Stock
held in violation of these provisions to unrelated third parties so
that the Shareholders and their Affiliates no longer beneficially own
any such shares or have any agreement or understanding relating to such
shares, this Section 2.1 shall be deemed to not have been violated; and
provided, further, that no violation of this provision shall be deemed
to have occurred by reason of the indirect acquisition of beneficial
ownership of securities resulting from (x) investments in investment
funds as to which no Shareholder or Affiliate thereof has control or
power to control with respect to voting or investment decisions or (y)
acquisitions of securities by a limited partner in any Shareholder or
Affiliates thereof as to which limited partner no Shareholder or its
Affiliates has control or power to control;
Page 81 of 112
(ii) make or cause to be made any proposal for a
Reorganization Transaction except for Dispositions in accordance with
Article 4;
(iii) form, join or in any way participate in a Group
with respect to any securities of the Company or its Affiliates, other
than with other Shareholders or Affiliates of any Shareholder;
provided, however, that in the case of securities other than Voting
Securities, Shareholders may participate in a Group with respect
thereto with the prior approval of a majority of the entire Board of
Directors (which approval is requested in a manner which does not
require disclosure publicly or to any third party);
(iv) make, or in any way cause or participate in, any
"solicitation" of "proxies" to vote (as those terms are defined in
Regulation 14A under the Exchange Act) with respect to the Company or
its Affiliates, or communicate with, seek to advise, encourage or
influence any Person, in any manner, with respect to the voting of,
securities of the Company or its Affiliates, or become a "participant"
in any "election contest" (as those terms are defined or used in Rule
14a-11 under the Exchange Act) with respect to the Company or its
Affiliates (other than non-public communications with other
Shareholders or Affiliates of any Shareholder which would not require
public disclosure by any Person or solicitation of proxies in support
of the election of Shareholder Designees, Management Directors and
Unaffiliated Directors nominated by the Board of Directors in
accordance with Section 3.1 hereof in circumstances in which a third
party is soliciting parties for the election of nominees not nominated
by the Board of Directors);
(v) initiate, propose or, except with the prior
approval of a majority of the entire Board of Directors (which approval
is requested in a manner which does not require disclosure publicly or
to any third parties) otherwise solicit stockholders for the approval
of one or more stockholder proposals with respect to the Company or its
Affiliates or induce or attempt to induce any other Person to initiate
any stockholder proposal or seek election to or seek to place a
representative on the Board of Directors of the Company (except
pursuant to Section 3.1 of this Agreement) or its Affiliates or seek
the removal of any member of the Board of Directors of the Company or
its Affiliates (for this purpose, the actions of the Shareholder
Designees in communicating (without public disclosure or disclosure to
third parties) with the Board of Directors in their capacity as
directors of the Company, and non-public communication by a Shareholder
with other Shareholders or Affiliates of any
Page 82 of 112
Shareholder which would not require public disclosure by any Person, shall not
be deemed to be in contravention of this paragraph (v));
(vi) in any manner, agree, attempt, seek or propose
(other than making any request for permission with respect thereto
which would not require disclosure publicly or to any third party) to
deposit any securities of the Company or its Affiliates in any voting
trust or similar arrangement or to subject any securities of the
Company or its Affiliates to any other voting or proxy agreement,
arrangement or understanding (other than any such agreements or
understandings with other Shareholders or Affiliates of any
Shareholder);
(vii) offer, sell or transfer any Voting Securities
or rights to receive Voting Securities except for Dispositions in
accordance with Article 4;
(viii) disclose any intention, plan or arrangement,
or make any public announcement (or request permission to make any such
announcement other than making any request for permission which would
not require disclosure publicly or to any third party), or induce any
other Person to take any action, inconsistent with the foregoing;
(ix) enter into any negotiations, arrangements or
understandings with any third party with respect to any of the
foregoing;
(x) advise, assist or encourage or finance (or assist
or arrange financing to or for) any other Person in connection with any
of the foregoing;
(xi) otherwise act in concert with others, to seek to
control or influence the management, Board of Directors or policies of
the Company or its Affiliates (for this purpose, the actions of the
Shareholder Designees in their capacity as directors of the Company
shall not be deemed to be in contravention of this paragraph (xi)); or
(xii) request a waiver of any of the provisions of
any of paragraphs (i) through (xii) of this Section 2.1 (except any
request which would not require disclosure publicly or to any third
party);
provided, that this Section 2.1 shall not restrict or inhibit the rights of a
Shareholder to exercise its voting rights as a stockholder of the Company
(subject to Section 3.2).
(b) Affiliates of Shareholders who (i) are not
Apollo/Blackstone Shareholders or their Affiliates, (ii) are not Related
Transferees of any Shareholder, (iii) are not in possession of any material
non-public Information provided to
Page 83 of 112
Shareholders by the Company, its subsidiaries or representatives pursuant to
Section 3.4 hereof or otherwise, and (iv) do not have voting or dispositive
power over any shares of Senior Preferred Stock or any Conversion Shares (such
affiliates being "Exempt Affiliates") shall not be subject to this Section 2.1.
(c) The DLJ Shareholders represent and warrant to the Company
that the DLJ Parent Entities are now, and at any time during the Standstill
Period that they take actions that would be otherwise prohibited by Section
2.1(a) will be, Exempt Affiliates. The Greenwich Street Shareholders represent
and warrant to the Company that the Greenwich Street Parent Entities are now,
and at all times during the Standstill Period that they take actions that would
be otherwise prohibited by Section 2.1(a) will be, Exempt Affiliates. Based upon
the foregoing representations and warranties in this Section 2.1(c), the Company
will consider the DLJ Parent Entities and the Greenwich Street Parent Entities
to be Exempt Affiliates.
SECTION 2.2. Early Termination of Standstill. The obligations
of Shareholders under Section 2.1 shall terminate early upon the occurrence of
any of the following events:
(a) At least $10,000,000 in indebtedness for monies borrowed
by the Company or its subsidiaries shall have been accelerated and payment
therefor shall not have been made within 20 days after such acceleration, and
the Company shall not in good faith be contesting whether such amount is owed.
(b) A final judgment or judgments (not subject to appeal) for
the payment of money shall have been entered against the Company or its
subsidiaries in an aggregate amount in excess of $10,000,000 (exclusive of any
amounts fully covered by insurance (less any applicable deductible) or
indemnification) by a court or courts of competent jurisdiction, which judgments
remain unsatisfied, undischarged, unstayed or unbonded for a period of 45 days
after the entry of such judgment or judgments.
(c) The Company shall file a petition in bankruptcy or for
reorganization or for an arrangement or any composition, readjustment,
liquidation, dissolution or similar relief pursuant to Title 11 of the United
States Code or under any similar present or future federal law or the law of any
other jurisdiction or shall be adjudicated a bankrupt or insolvent, or consent
to the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the Company or
for all or any substantial part of its property, or shall make a general
assignment for the benefit of its creditors.
(d) A petition or answer shall be filed proposing the
adjudication of the Company as bankrupt or its reorganization or arrangement, or
any composition,
Page 84 of 112
readjustment, liquidation, dissolution or similar relief with respect to it
pursuant to Title 11 of the United States Code or under any similar present or
future federal law or the law of any other jurisdiction, and the Company shall
consent to or acquiesce in the filing thereof, or such petition or answer shall
not be discharged or denied within 60 days after the filing thereof.
(e) The Company shall be in material breach of its obligations
to Shareholders under the Registration Rights Agreement and such breach shall
not have been cured within 20 days after receipt by the Company from
Shareholders of a written notice specifying such breach and requiring it to be
remedied, and the Company shall not in good faith be contesting whether such
breach has occurred.
(f) If the Company shall, in breach of its obligations under
this Agreement, fail to nominate for election to the Board of Directors any
Shareholder Designee who satisfies the requirements for designation to the Board
of Directors set forth in Section 3.1(d).
SECTION 2.3. Modification Upon Subsequent Agreement. If (a)
the Company enters into any agreement, understanding or arrangement with any
other Person or Group (each a "Future Major Investor") relating to the Company's
obligation, whether absolute, contingent, current or future, to support or cause
the nomination of one or more Persons to the Board of Directors at the request
of the Future Major Investor, and (b) such agreement, understanding or
arrangement contains any terms with respect to the matters covered by this
Article 2 that are more favorable to the Future Major Investor than those
provided to the Shareholders hereunder, then this Article 2 shall be
automatically modified to include the more favorable terms and thereby provide
the Shareholders with rights at least as favorable and obligations no more
burdensome as those given to the Future Major Investor.
ARTICLE 3
---------
Board Representation and Voting
-------------------------------
SECTION 3.1. Board Representation. (a) Until the earlier to
occur of the tenth anniversary of the purchase of shares of Senior Preferred
Stock pursuant to the Preferred Stock Purchase Agreement and the date on which
the Apollo/Blackstone Shareholders own, collectively, less than 20% of the
Apollo/Blackstone Shares (the "Shareholder Designee Period"), the Board of
Directors shall consist of no more than thirteen (13) directors during the
Shareholder Designee Period.
For so long as the Apollo/Blackstone Shareholders are entitled
to at least two Shareholder Designees under this Agreement, the
Apollo/Blackstone Shareholders shall be entitled to have one Shareholder
Designee serve on each committee of the Board of Directors other than any
committee formed for the purpose of considering
Page 85 of 112
matters relating to the Shareholders and as set forth below with respect to the
Nominating Committee.
(b) Immediately following the purchase of shares of Senior
Preferred Stock pursuant to the Preferred Stock Purchase Agreement, the Company
will cause Xxxxx Xxxxxxx to be elected or appointed to the Board of Directors.
At all times during the Shareholder Designee Period, the Company agrees, subject
to Section 3.1(d), to support the nomination of, and the Company's Nominating
Committee (as defined herein) shall recommend to the Board of Directors the
inclusion in the slate of nominees recommended by the Board of Directors to
shareholders for election as directors at each annual meeting of shareholders of
the Company: (i) no more than two persons who are executive officers of the
Company ("Management Directors"), (ii) (A) five Shareholder Designees, so long
as the Apollo/Blackstone Shareholders beneficially own 80% or more of the
Apollo/Blackstone Shares, (B) four Shareholder Designees, so long as the
Apollo/Blackstone Shareholders beneficially own 60% or more but less than 80% of
the Apollo/Blackstone Shares, (C) three Shareholder Designees, so long as the
Apollo/Blackstone Shareholders beneficially own 40% or more but less than 60% of
the Apollo/Blackstone Shares, (D) two Shareholder Designees, so long as the
Apollo/Blackstone Shareholders beneficially own 20% or more but less than 40% of
the Apollo/Blackstone Shares, and (E) one Shareholder Designee, so long as the
Apollo/Blackstone Shareholders beneficially own 10% or more but less than 20% of
the Apollo/Blackstone Shares (each a "Beneficial Ownership Threshold");
provided, however, that if at any time as a result of the Company's issuance of
Voting Securities the Shareholders beneficially own 9% or less of the Actual
Voting Power (the "Actual Voting Power Threshold"), the Apollo/Blackstone
Shareholders shall be entitled to no more than three Shareholder Designees (even
if the Apollo/Blackstone Shareholders would otherwise be entitled to a greater
number of Shareholder Designees pursuant to clauses (A) through (E) above), and
(iii) such other persons, each of whom is (A) recommended by the Nominating
Committee and (B) not an employee or officer of or outside counsel to the
Company or a partner, employee, director, officer, affiliate or associate (as
defined in Rule 12b-2 under the Exchange Act) of any Shareholder or any
affiliate of a Shareholder or as to which the Shareholders or their affiliates
own at least ten percent of the voting equity securities ("Unaffiliated
Directors"). If any vacancy (whether by death, retirement, disqualification,
removal from office or other cause, or by increase in number of directors)
occurs prior to a meeting of the Company's stockholders, the Board (i) may
appoint a member of management to fill a vacancy caused by a Management Director
ceasing to serve as a director, (ii) shall appoint, subject to Section 3.1(d), a
person designated by the Apollo/Blackstone Shareholders to fill a vacancy
created by a Shareholder Designee ceasing to serve as a director (except as a
result of the reduction of the number of Shareholder Designees entitled to be
included on the Board of
Page 86 of 112
Directors by reason of a decrease in the Apollo/Blackstone Shareholders'
beneficial ownership of Apollo/Blackstone Shares below any Beneficial Ownership
Threshold or by reasons of a decrease in the Shareholders' beneficial ownership
of Voting Securities below the Actual Voting Power Threshold), and (iii) may
appoint a person who qualifies as an Unaffiliated Director and is recommended by
the Nominating Committee pursuant to the procedures set forth in the following
paragraph to fill a vacancy created by an Unaffiliated Director ceasing to serve
as a director (provided, however, that in the case of a vacancy relating to an
Unaffiliated Director, if a majority of the Nominating Committee is unable to
recommend a replacement, then the Board seat with respect to this vacancy shall
remain vacant), and each such person shall be a Management Designee, Shareholder
Designee or Unaffiliated Director, as the case may be, for purposes of this
Agreement.
At all times during the Shareholder Designee Period,
Unaffiliated Directors shall be designated exclusively by a majority of a
nominating committee (the "Nominating Committee"), which shall at all times
during the Shareholder Designee Period consist of not more than four persons,
two of whom shall be Shareholder Designees (or such lesser number of Shareholder
Designees as then serves on the Board of Directors) and two of whom shall be
either Management Directors or Unaffiliated Directors. If the Nominating
Committee is unable to recommend one or more persons to serve as Unaffiliated
Directors (except with respect to any vacancy created by an Unaffiliated
Director ceasing to serve as such), then the Board of Directors shall nominate
and recommend for election by stockholders an Unaffiliated Director then serving
on the Board of Directors. Notwithstanding the foregoing, if the
Apollo/Blackstone Shareholders beneficially own less than 50% of the
Apollo/Blackstone Shares, the Nominating Committee shall be comprised of
individuals only one of whom is a Shareholder Designee.
The foregoing provisions shall be effected pursuant to an
amendment to the Company's Bylaws in a form reasonably acceptable to the parties
to this Agreement, which shall not be further amended by the Board of Directors
during the Shareholder Designee Period.
Notwithstanding the foregoing, the Company shall have no
obligation to support the nomination, recommendation or election of any
Shareholder Designee pursuant to this Section 3.1(b) or any other obligation
under this Section 3.1 if the Apollo/Blackstone Shareholders are in breach of
any material provision of this Agreement.
(c) Upon any decrease in Apollo/Blackstone Shareholders'
beneficial ownership of Apollo/Blackstone Shares below any Beneficial Ownership
Threshold or
Page 87 of 112
any decrease in the Shareholders beneficial ownership of Voting Securities below
the Actual Voting Power Threshold, the Apollo/Blackstone Shareholders shall
cause a number of Shareholder Designees to offer to immediately resign from the
Company's Board of Directors such that the number of Shareholder Designees
serving on the Board of Directors immediately thereafter will be equal to the
number of Shareholder Designees which the Apollo/Blackstone Shareholders would
then be entitled to designate under Section 3.1(b). Upon termination of the
Shareholder Designee Period, the Apollo/Blackstone Shareholders shall promptly
cause all of the Shareholder Designees to offer to resign immediately from the
Board of Directors and any committees thereof and the Company's obligations
under this Section 3.1 shall terminate.
(d) Notwithstanding the provisions of this Section 3.1, the
Apollo/Blackstone Shareholders shall not be entitled to designate any person to
the Company's Board of Directors (or any committee thereof) in the event that
the Company receives a written opinion of its outside counsel that a Shareholder
Designee would not be qualified under any applicable law, rule or regulation to
serve as a director of the Company or if the Company objects to a Shareholder
Designee because such Shareholder Designee has been involved in any of the
events enumerated in Item 2(d) or (e) of Schedule 13D or such person is
currently the target of an investigation by any governmental authority or agency
relating to felonious criminal activity or is subject to any order, decree, or
judgment of any court or agency prohibiting service as a director of any public
company or providing investment or financial advisory services and, in any such
event, the Apollo/Blackstone Shareholders shall withdraw the designation of such
proposed Shareholder Designee and designate a replacement therefor (which
replacement Shareholder Designee shall also be subject to the requirements of
this Section). The Company shall use its reasonable best efforts to notify the
Apollo/Blackstone Shareholders of any objection to a Shareholder Designee
sufficiently in advance of the date on which proxy materials are mailed by the
Company in connection with such election of directors to enable the
Apollo/Blackstone Shareholders to propose a replacement Shareholder Designee in
accordance with the terms of this Agreement.
(e) Each Shareholder Designee serving on the Board of
Directors shall be entitled to all compensation and stock incentives granted to
directors who are not employees of the Company on the same terms provided to,
and subject to the same limitations applicable to, such directors.
SECTION 3.2. Voting. (a) Each Shareholder agrees that during
the Standstill Period such Shareholder shall, and shall cause its Affiliates and
any Person which is a member of any Group of which such Shareholder or any of
its Affiliates is a
Page 88 of 112
member to, be present, in person or represented by proxy, at all meetings of
shareholders of the Company so that all Voting Securities beneficially owned by
such Shareholder shall be counted for the purpose of determining the presence of
a quorum at such meetings. Each Shareholder agrees that during the Standstill
Period:
(i) In connection with the election of directors of
the Company, such Shareholder shall vote or cause to be voted all
Voting Securities beneficially owned by such Shareholder to elect those
individuals nominated in accordance with the provisions of Section 3.1.
(ii) In connection with any proposal for a
Reorganization Transaction, such Shareholder shall vote or cause to be
voted, or consent with respect to, all Voting Securities beneficially
owned by such Shareholder in the manner recommended by a majority of
the entire Board of Directors.
(iii) In connection with other proposals submitted to
shareholders of the Company, such Shareholder shall be free to vote or
cause to be voted, or consent with respect to, all Voting Securities
beneficially owned by such Shareholder in its discretion.
SECTION 3.3. Notices of Dispositions of Voting Securities. Not
later than the tenth day following the end of any calendar month during the
Standstill Period in which one or more Dispositions of Voting Securities by a
Shareholder or any of its Affiliates shall have occurred, such Shareholder shall
use its reasonable best efforts to give written notice to the Company of all
such Dispositions (in the case of Dispositions by Affiliates, to the extent it
has knowledge) unless any such Disposition has been reflected in a public filing
that was delivered to the Company on or in advance of the date upon which notice
thereof under this Section 3.3 would have been due. Such notice shall state the
date upon which each such Disposition was effected, the number and type of
Voting Securities involved in each such Disposition, the means by which each
such Disposition was effected and, to the extent known, the identity of the
Person acquiring Voting Securities.
SECTION 3.4. Access to Information. The Company will provide
each Shareholder during normal business hours with reasonable prior written
notice with (i) access to the books and records of the Company and information
relating to the Company, its properties, operations, financial condition and
affairs ("Information") and (ii) the opportunity to consult with management of
the Company from time to time regarding the Company, its properties, operations,
finances and affairs. Certain of the Shareholders have requested the Information
and consultation rights provided herein to enable the Shares held by such
Shareholders to qualify as a "venture capital investment" as to which such
Shareholders have "management rights," in each case as
Page 89 of 112
such terms are defined in Department of Labor Regulation Section 2510.3-101(d);
provided, however, that nothing herein shall require the Company to furnish such
Shareholders with more than rights of access to Information and consultation
provided herein regardless of whether such rights are sufficient for such
Shareholders to comply with venture capital operating company requirements. In
furtherance of the foregoing, the Company agrees to inform the Shareholders with
respect to any corporate actions which the Company considers to be major or
significant, including, without limitation, extraordinary dividends, mergers,
acquisitions or dispositions of significant assets, issuances of significant
amounts of debt or equity and material amendments to the certificate of
incorporation or by-laws of the Company, and (subject to the limitations
specified in the proviso in the preceding sentence) to provide the Shareholders
with the opportunity to consult with management of the Company with respect to
such matters. The Shareholders agree to hold in strict confidence all nonpublic
Information furnished to them and to use all Information only in connection with
the management of their investment in the Company, except that the Shareholders
may disclose any information that (i) is or becomes generally available to the
public other than as a result of disclosure by the Shareholders, and (ii) is or
becomes available to the Shareholders from a source other than the Company;
provided, however, that, to the knowledge of the Shareholders, the source is not
bound by a confidentiality obligation with the Company in respect thereof. If
any Shareholder is required by a court or administrative agency to disclose any
of the nonpublic Information, the Shareholder shall promptly notify the Company
of such requirement so that the Company may at its own expense oppose such
requirement or seek a protective order and request confidential treatment of
such Information. It is agreed that if the Shareholder is nonetheless compelled
to disclose the Information, the Shareholder may disclose such portion of the
Information which is legally required without liability hereunder. In any event,
the Shareholder will not oppose action by the Company to obtain a protective
order or other reliable assurance that confidential treatment will be accorded
the Information. Nothing herein shall permit any Shareholder to disclose
material non-public Information to permit such Shareholder to purchase or sell
securities of the Company in compliance with the federal securities laws.
ARTICLE 4
---------
Transfer Restrictions
---------------------
SECTION 4.1. Restrictions on Dispositions. During the
Standstill Period, each Shareholder shall not, and shall cause its Affiliates
not to, directly or indirectly (including, without limitation, through the
disposition or transfer of control of another Person), sell, assign, donate,
transfer, pledge, hypothecate, grant any option with respect to or otherwise
dispose of any interest in (or enter into an agreement or understanding with
respect to the foregoing) any Voting Securities (a "Disposition"), except as set
forth below in this Section 4.1. Without limiting the generality of the
Page 90 of 112
foregoing, any sale of securities held by any Shareholder or any of its
Affiliates which is currently (or following the passage of time, the occurrence
of any event or the giving of notice), directly or indirectly, exchangeable or
exercisable for, or convertible into, any Voting Securities shall constitute a
Disposition of such Voting Securities.
Dispositions may be effected by a Shareholder during the
Standstill Period as follows:
(a) No Dispositions of any nature may be made prior to the
first anniversary of the purchase of the Senior Preferred Stock pursuant to the
Preferred Stock Purchase Agreement, except pursuant to Sections 4.1(b) through
4.1(f).
(b) As of the date of purchase of the shares of Senior
Preferred Stock pursuant to the Preferred Stock Purchase Agreement (the
"Purchase Date"), with respect to the Shares, and after the first anniversary of
the Purchase Date, with respect to all other Voting Securities, Dispositions of
Voting Securities may be made at any time in compliance with the Registration
Rights Agreement.
(c) As of the Purchase Date, with respect to the Shares, and
after the first anniversary of the Purchase Date, with respect to all other
Voting Securities, Dispositions of Voting Securities may be made pursuant to
sales effected in accordance with Rule 144 under the Securities Act (a "Rule 144
Sale"); provided that such Dispositions shall not be made to any Person who or
which would immediately thereafter, to the knowledge of such Shareholder, any of
its Affiliates, or such Shareholder's broker, beneficially own Voting Securities
representing 9% or more of the Total Voting Power (and such Person shall have
provided a certificate to such effect).
(d) As of the Purchase Date, with respect to the Shares, and
after the first anniversary of the Purchase Date, with respect to all other
Voting Securities, Dispositions may be made to any Person (other than pursuant
to a Reorganization Transaction) that would, following such sale, beneficially
own no more than 9% of the Total Voting Power (and such Person shall have
provided a certificate to such effect).
(e) Dispositions may be made pursuant to a merger transaction
or other business combinations or a tender offer for outstanding shares of
Common Stock which is recommended to the shareholders of the Company generally
by at least a majority of the entire Board of Directors, on the terms and
conditions of such transaction available to all other holders of shares of
Common Stock or on terms and conditions recommended by at least a majority of
the entire Board of Directors (excluding the Apollo/Blackstone Designees) as to
the Preferred Stock and Junior Preferred Stock.
Page 91 of 112
(f) Dispositions may be made by a Shareholder to (i) any other
Shareholder or (ii) any Related Person of any Shareholder that executes an
instrument in form and substance satisfactory to the Company in which it makes
the representations and warranties set forth in Section 1.3(b) as of the date of
the execution of such instrument and agrees to be bound by the terms of this
Agreement as if an original signatory to this Agreement (such transferee, a
"Related Transferee"), in which case such Related Transferee shall thereafter be
a "Shareholder" for all purposes of this Agreement.
(g) With respect to Voting Securities which are, by their
terms, convertible into or exercisable or exchangeable for other Voting
Securities such conversion, exercise or exchange shall not be deemed a
Disposition. Without limiting the foregoing, the Company acknowledges that the
conversion of shares of Senior Preferred Stock or shares of Junior Preferred
Stock into Conversion Shares shall not be a Disposition.
(h) Each Shareholder agrees that during the Standstill Period,
without the consent of the managing underwriter(s) in an underwritten offering
in respect of the Company's Voting Securities, it will not effect any sale or
distribution of Voting Securities (other than in connection with such
Shareholder's own registration pursuant to paragraph (b) of this Section 4.1),
including a Rule 144 Sale, during the ten (10) day period prior to, and during
the ninety (90) day period beginning on, the effective date of the registration
statement filed by the Company in respect of such underwritten offering, or any
shorter period as may apply to the Company and its affiliates.
ARTICLE 5
---------
Miscellaneous
-------------
SECTION 5.1. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, telex, fax or air courier
guaranteeing delivery:
(a) If to the Company, to:
Allied Waste Industries, Inc.
00000 Xxxxx Xxxxxxxx-Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxx, Esq.
Fax: (000) 000-0000
Page 92 of 112
with copies to:
Xxxxxxxxx Xxxxx
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxx XxXxxxxxx, Esq.
Fax: (000) 000-0000
and to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxx
Fax: (000) 000-0000
or to such other person or address as the Company shall furnish to Shareholders
in writing;
(b) If to Shareholders, to:
Apollo Management, L.P.
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Fax: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000
and:
Page 93 of 112
The Blackstone Group
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
and:
Greenwich Street Investment II, L.L.C.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Nissan
Fax: (000) 000-0000
and:
DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxxxxxxx
Fax: (000) 000-0000
and
Attn: Xxx Xxxxx
Fax: (000) 000-0000
Page 94 of 112
with a copy to:
DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxx
Fax: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
or to such other person or address as Shareholders shall furnish to the Company
in writing.
All such notices, requests, demands and other communications
shall be deemed to have been duly given: at the time of delivery by hand, if
personally delivered; five (5) Business Days after being deposited in the mail,
postage prepaid, if mailed domestically in the United States (and seven (7)
Business Days if mailed internationally); when answered back, if telexed; when
receipt acknowledged, if telecopied; and on the Business Day for which delivery
is guaranteed, if timely delivered to an air courier guaranteeing such delivery.
SECTION 5.2. Legends. (a) If requested in writing by the
Company, a Shareholder shall present or cause to be presented promptly all
certificates representing Voting Securities beneficially owned by such
Shareholder or any of its Affiliates, for the placement thereon of a legend
substantially to the following effect, which legend will remain thereon so long
as such legend is required under applicable securities laws:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. SUCH SHARES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF SUCH A REGISTRATION THEREUNDER OTHER
Page 95 of 112
THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS AND DELIVERY TO ALLIED WASTE INDUSTRIES, INC. OF
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT TO THE
EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER
THOSE LAWS."
(b) Each Shareholder shall present or cause to be presented
promptly all certificates representing Voting Securities beneficially owned by
such Shareholder or any of its Affiliates, for the placement thereon of a legend
substantially to the following effect, which legend will remain thereon during
the Standstill Period as long as such Voting Securities are beneficially owned
by any Shareholder or an Affiliate of any Shareholder:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF A SECOND AMENDED AND RESTATED SHAREHOLDERS
AGREEMENT, DATED AS OF JULY 30, 1999, BETWEEN ALLIED WASTE
INDUSTRIES, INC. ("ALLIED") AND CERTAIN STOCKHOLDERS OF ALLIED
NAMED THEREIN AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN
ACCORDANCE THEREWITH. A COPY OF SAID AGREEMENT IS ON FILE AT
THE OFFICE OF THE CORPORATE SECRETARY OF ALLIED"
(c) The Company may enter a stop transfer order with the
transfer agent or agents of Voting Securities against any Disposition not in
compliance with the provisions of this Agreement.
SECTION 5.3. Enforcement. Shareholders, on the one hand, and
the Company, on the other hand, acknowledge and agree that irreparable injury to
the other party would occur in the event any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached and that such injury would not be adequately compensable in damages. It
is accordingly agreed that, in addition to any other remedies which may be
available at law or in equity, each party hereto (the "Moving Party") shall be
entitled to specific enforcement of, and injunctive relief to prevent any
violation of, the terms of this Agreement, and the other parties hereto will not
take action, directly or indirectly, in opposition to the Moving
Page 96 of 112
Party seeking such relief on the grounds that any other remedy or relief is
available at law or in equity. The parties further agree that no bond shall be
required as a condition to the granting of any such relief.
SECTION 5.4. Entire Agreement. This Agreement constitutes the
entire agreement and understanding of the parties with respect to the
transactions contemplated hereby; provided that the Original Shareholders
Agreement shall remain in full force and effect until the closing of the
purchase and sale of the Senior Preferred Stock pursuant to the Preferred Stock
Purchase Agreement and the representations and warranties of the parties set
forth in Sections 1.2 and 1.3 of the Original Agreement shall survive and shall
be deemed to be not amended or otherwise affected by this Agreement. This
Agreement may be amended only by a written instrument duly executed by the
parties or their respective successors or assigns; provided, however, that any
amendment or waiver by the Company shall be made only with the prior approval of
a majority of the directors of the Company other than Shareholder Designees.
SECTION 5.5. Severability. Whenever possible, each provision
or portion of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law, rule or regulation in any jurisdiction,
such invalidity, illegality or unenforceability will not affect any other
provision or portion of any provision in such jurisdiction, and this Agreement
will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision or portion of any provision shall
have been replaced with a provision which shall, to the maximum extent
permissible under such applicable law, rule or regulation, give effect to the
intention of the parties as expressed in such invalid, illegal or unenforceable
provision.
SECTION 5.6. Headings. Descriptive headings contained in the
Agreement are for convenience only and will not control or affect the meaning or
construction of any provision of this Agreement.
SECTION 5.7. Counterparts. For the convenience of the parties,
any number of counterparts of this Agreement may be executed by the parties, and
each such executed counterpart will be an original instrument.
SECTION 5.8. No Waiver. Any waiver by any party of a breach of
any provision of this Agreement shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other
provision of this Agreement. The failure of a party to insist upon strict
adherence to any term of this Agreement on one or more occasions shall not be
considered a waiver or deprive that
Page 97 of 112
party of the right thereafter to insist upon strict adherence to that term or
any other term of this Agreement.
SECTION 5.9. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Company and Shareholders, and to
their respective successors and assigns other than, in the case of Shareholders,
transferees that are not Related Transferees, including any successors to the
Company or Shareholders or their businesses or assets as the result of any
merger, consolidation, reorganization, transfer of assets or otherwise, and any
subsequent successor thereto, without the execution or filing of any instrument
or the performance of any act; provided that no party may assign this Agreement
without the other party's prior written consent, except by the Shareholders to a
Shareholder or a Related Transferee as expressly provided in this Agreement (and
that nothing herein restricts the transfer of any of the rights of Shareholders
under the Registration Rights Agreement in accordance the terms of the
Registration Rights Agreement).
SECTION 5.10. Governing Law. This Agreement will be governed
by and construed and enforced in accordance with the internal laws of the State
of Delaware, without giving effect to the conflict of laws principles thereof.
SECTION 5.11. Further Assurances. From time to time on and
after the date of this Agreement, the Company and Shareholders, as the case may
be, shall deliver or cause to be delivered to the other party hereto such
further documents and instruments and shall do and cause to be done such further
acts as the other parties hereto shall reasonably request to carry out more
effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure that it is protected in acting hereunder.
SECTION 5.12. Consent to Jurisdiction and Service of Process.
Any legal action or proceeding with respect to this Agreement or any matters
arising out of or in connection with this Agreement, and any action for
enforcement of any judgment in respect thereof shall be brought exclusively in
the state or federal courts located in the State of Delaware, and, by execution
and delivery of this Agreement, the Company and Shareholders each irrevocably
consent to service of process out of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, or by recognized international express carrier
or delivery service, to the Company or Shareholders at their respective
addresses referred to in this Agreement. The Company and Shareholders each
hereby irrevocably waives any objection which it may now or hereafter have to
the laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Agreement brought in the courts referred to above
and hereby further
Page 98 of 112
irrevocably waives and agrees, to the extent permitted by applicable law, not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing in this
Agreement shall affect the right of any party hereto to serve process in any
other manner permitted by law.
SECTION 5.13. Shareholder Action. The Company shall be
entitled to rely upon any written notice, designation, or instruction signed by
Apollo Management IV, L.P. and BCP (the "Representatives") as a notice,
designation or instruction of all Shareholders and the Company shall not be
liable to any Shareholder if the Company acts in accordance with and relies upon
such writing. Notwithstanding the foregoing, however, the Company shall not be
entitled to rely upon any written notice, designation or instruction signed by
the Representatives as a notice, designation or instruction of the DLJ
Shareholders or the Greenwich Street Shareholders if such notice, designation or
instruction states that it relates to the first parenthetical proviso contained
in the first paragraph of Section 2.1(a) or Section 2.1(b), 3.2(a)(iii), 3.4,
4.1(c), 5.4 or 5.9 of this Agreement (the "Specific Rights"). Each of the
Shareholders acknowledges that the Representatives have full power and authority
to act on their behalf; provided, however, that none of the DLJ Shareholders and
the Greenwich Street Shareholders acknowledge the power or authority of the
Representatives to act on their behalf with respect to the Specific Rights.
Page 99 of 112
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first referred to above.
ALLIED WASTE INDUSTRIES, INC.
By:___________________________
Name:
Title:
APOLLO INVESTMENT FUND IV, L.P.
APOLLO OVERSEAS PARTNERS IV, L.P.
By: Apollo Advisors IV, L.P.
its General Partner
By: Apollo Capital Management IV, Inc.
its General Partner
By:__________________________
Name:
Title:
APOLLO/AW LLC
By: Apollo Management IV, L.P.
its Manager
By: AIF IV Management, Inc.
its General Partner
By:__________________________
Name:
Title:
Page 100 of 112
APOLLO INVESTMENT FUND III, L.P.
APOLLO OVERSEAS PARTNERS III, L.P.
APOLLO (UK) PARTNERS III, L.P.
By: Apollo Advisors II, L.P.
its General Partner
By: Apollo Capital Management II, Inc.
its General Partner
By:__________________________
Name:
Title:
BLACKSTONE CAPITAL PARTNERS III
MERCHANT BANKING FUND X.X.
XXXXXXXXXX OFFSHORE CAPITAL PARTNERS III X.X.
XXXXXXXXXX FAMILY INVESTMENT PARTNERSHIP III L.P.
By: Blackstone Management Associates III L.L.C.
its General Partner
By:__________________________
Name:
Title:
BLACKSTONE CAPITAL PARTNERS II MERCHANT BANKING FUND, X.X.
XXXXXXXXXX OFFSHORE CAPITAL PARTNERS II, X.X.
XXXXXXXXXX FAMILY INVESTMENT PARTNERSHIP II, L.P.
By: Blackstone Management Associates II L.L.C.
its General Partner
Page 101 of 112
By:_________________________
Name:
Title:
GREENWICH STREET CAPITAL PARTNERS II, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:_________________________
Name:
Title:
GSCP OFFSHORE FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:_________________________
Name:
Title:
Page 102 of 112
GREENWICH FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:________________________
Name:
Title:
GREENWICH STREET EMPLOYEES FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:_________________________
Name:
Title:
TRV EXECUTIVE FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:_________________________
Name:
Title:
DLJMB FUNDING II, INC.
Page 103 of 112
By:________________________
Name:
Title:
DLJ MERCHANT BANKING PARTNERS II, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:_________________________
Name:
Title:
DLJ MERCHANT BANKING PARTNERS II-A, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:___________________________
Name:
Title:
DLJ DIVERSIFIED PARTNERS, L.P.
By: DLJ Diversified Partners, Inc.
Managing General Partner
By:___________________________
Name:
Title:
Page 104 of 112
DLJ DIVERSIFIED PARTNERS-A, L.P.
By: DLJ Diversified Partners, Inc.
Managing General Partner
By:__________________________
Name:
Title:
DLJ MILLENNIUM PARTNERS, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:__________________________
Name:
Title:
DLJ MILLENNIUM PARTNERS-A, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:___________________________
Name:
Title:
Page 105 of 112
DLJ FIRST ESC L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By:____________________________
Name:
Title:
DLJ OFFSHORE PARTNERS II, C.V.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:___________________________
Name:
Title:
DLJ EAB PARTNERS, L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By:___________________________
Name:
Title:
Page 106 of 112
DLJ ESC II L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By:___________________________
Name:
Title:
Page 107 of 112
