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AGREEMENT
This Agreement (the "Agreement") dated September 17, 1996 is by and
between Allied Waste Industries, Inc., a Delaware corporation ("Allied"), TPG
Partners, L.P., a Delaware limited partnership ("TPG") and TPG Parallel I,
L.P., a Delaware limited partnership ("TPG Parallel").
WHEREAS, Allied and TPG have entered into the Securities Purchase
Agreement (the "TPG Agreement") dated October 27, 1994 (the "TPG Agreement")
which provides for the purchase (the "Purchase") of 11,709,602 shares of
Allied's common stock, par value $0.01 per share (the "Common Stock"), by TPG
and TPG Parallel.
WHEREAS, the Purchase was closed on January 30, 1995 and certain
covenants set forth in the TPG Agreement remain in effect.
WHEREAS, Allied and TPG desire to amend certain provisions of the TPG
Agreement and enter into other agreements set forth herein, all conditioned
upon the closing (the "Closing") of the transactions set forth in the Stock
Purchase Agreement by and between Allied and Polaris Inc., among others, dated
September 17, 1996 (the "Polaris Agreement").
NOW, THEREFORE, in consideration of the foregoing, Allied, TPG and TPG
Parallel hereby agree as follows:
1. AGREEMENTS REGARDING THE TPG AGREEMENT.
(a) TPG agrees that the consummation of the transactions
contemplated by the Polaris Agreement, including any schedule or
exhibit thereto, shall not constitute a "Change of Control" as defined
in Section 1.3(c)(iv) of the TPG Agreement.
(b) Upon the occurrence of the Closing and the election
of the Board of Directors contemplated by Section 2, below:
(i) The last sentence of Section 4.2(a) is hereby
amended to read as follows in its entirety:
The Purchaser shall be entitled to three
demands pursuant to this Section 4.2(a).
(ii) the following sentence is added at the end of
paragraph (a) of Section 4.2 of the TPG
Agreement:
If, in the case of an underwritten public
offering of Shares or Exercise Shares
registered pursuant to this Section 4.2(a),
the
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managing underwriter therefor concludes in
its reasonable judgment that the number of
shares to be registered would materially
adversely affect such offering, the number of
Shares and Exercise Shares to be registered,
together with the number of shares of Common
Stock or other securities proposed to be
registered by other Persons shall be reduced.
In such event, the Shares and Exercise Shares
registered pursuant to this Section 4.2(a)
shall have priority and no Shares or Exercise
Shares shall be so reduced until all shares
of Common Stock proposed to be registered by
any other Person have been entirely
eliminated;
(iii) the last sentence of Section 6.2 of the TPG
Agreement shall be amended to read as follows
in its entirety:
The terms of this Section 6.2 shall terminate
upon the earlier to occur of (x) the fifth
anniversary of the Closing Date or (y) if,
at any time, Texas Pacific Group, TPG
Partners, L.P., TPG Parallel I, L.P., and
their respective Affiliates (as that term is
defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended) own less
than either: (i) securities of the Company
representing 6.5% of the Common Stock
outstanding from time to time (calculated on a
fully diluted basis) or (ii) 5,888,637 shares
of the Common Stock;
(iv) the second proviso of the first sentence of
Section 6.2 is hereby amended to read as
follows in its entirety:
provided further, however, that the foregoing
covenant will expire on the occurrence of any
of the following: (i) the making of an offer
or proposal by a Person that would result in
a Change of Control; (ii) the failure of any
TPG Designee (as defined in the Agreement
between the Purchaser and the Company dated
September 17, 1996) to be nominated by the
Company to the Company's Board of Directors;
or (iii) a breach by the Company of the
covenants contained in Article IV hereof.
(v) Section 7.3 of the TPG Agreement is hereby
deleted in its entirety;
(c) Except as set forth in this Agreement, the TPG
Agreement shall remain in full force and effect.
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2. AGREEMENT. Allied, TPG and TPG Parallel agree as follows:
(a) Allied agrees to nominate for election to its Board
of Directors three representatives designated by TPG ("TPG's
Designees"), one of whom may be an Affiliate of TPG and two of whom
will not be Affiliates of TPG. All TPG Designees must be acceptable
to Allied, which approval will not be unreasonably withheld. Allied
agrees that Xxxx X. Xxxxx and Xxxxxxx X. Xxxxxx are acceptable as
initial TPG Designees of TPG. All TPG Designees will be compensated
at a level commensurate with the compensation of Allied's outside
directors. The TPG Designees shall be nominated by Allied for
election at each annual meeting of Allied's stockholders, subject to
the termination of this provision as set forth below. Upon election
to the Board of Directors, the TPG Designees will enjoy service on the
various committees of the Board of Directors commensurate with the
number of Board seats held by TPG Designees as well as one seat on the
newly formed Nominating Committee.
(b) Effective as of the Closing, Allied will amend its
bylaws to provide that the board of directors of Allied (the "Board of
Directors") will have 12 members, and will use its best efforts to
cause as soon as practicable after the Closing the members of the
Board of Directors to be Xxxxx X. Xxxxxx, Xxxxxx X. Xxx Xxxxxxx,
Xxxxx Xxxxxx, Xxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx, Xxxx X. Xxxxx,
Xxxxxxx X. Xxxxxx, two members nominated by Polaris (the "Polaris
Nominees") that are reasonably acceptable to Allied, and three new
outside directors (the "New Directors") to be selected by a nominating
committee of the Board of Directors comprised of Xxxxx X. Xxxxxx,
Xxxxx X. Xxxxxxx and Xxxx X. Xxxxxxx. The New Directors shall be
acceptable to TPG, in its sole discretion. Subsequent nominees to the
Board of Directors (other than the TPG Designees) shall not be subject
to approval by TPG. If any duly elected TPG Designee fails to
complete his term, TPG may designate a new TPG Designee that is
reasonably acceptable to Allied to replace such TPG Designee.
(c) TPG and TPG Parallel agree to cause all Allied
securities beneficially owned by them or their affiliates to be
present at all stockholder meetings called by the Board of Directors
of Allied so that they may be counted for the purpose of determining
the presence of a quorum at such meetings.
(d) The provisions of this Section 2 shall terminate if,
at any time, Texas Pacific Group, TPG Partners, L.P., TPG Parallel I,
L.P. and their respective Affiliates own less than either: (i)
securities of the Company representing 6.5% of the Company's Common
Stock outstanding from time to time (calculated on a fully diluted
basis) or (ii) 5,888,637 shares of Common Stock.
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IN WITNESS WHEREOF, Allied, TPG and TPG Parallel have duly executed
this Agreement as of the first date written above.
ALLIED WASTE INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: Chief Executive Officer
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TPG PARTNERS, L.P.
By TPG GenPar, L.P., general partner
By TPG Advisors, Inc., general partner
By: /s/ Xxxxx X. X'Xxxxx
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Name: Xxxxx X. X'Xxxxx
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Title: Vice President
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TPG PARALLEL I, L.P.
By TPG GenPar, L.P., general partner
By TPG Advisors, Inc., general partner
By: /s/ Xxxxx X. X'Xxxxx
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Name: Xxxxx X. X'Xxxxx
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Title: Vice President
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