Execution Copy
THIRD AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
This Third Amended and Restated Shareholders Agreement, dated as of
December 18, 2003 (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, Blackstone
Capital Partners III Merchant Banking Fund L.P., a Delaware limited partnership
("BCP"), Blackstone Offshore Capital Partners II L.P., a Cayman Islands limited
partnership, Blackstone Offshore Capital Partners III L.P., a Cayman Islands
limited partnership ("BOC III"), Blackstone Family Investment Partnership II
L.P., a Delaware limited partnership, Blackstone Family Investment Partnership
III L.P., a Delaware limited partnership ("BFP III"), 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, Xxxxxxx X.
Xxxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxx and Xxxxx Xxxxxxxx (collectively, the
"Shareholders"), on the other hand, amending and restating in its entirety the
Second Amended and Restated Shareholders Agreement dated as of July 30, 1999
(the "Original Agreement"), by and between the Company, on the one hand, and
certain of the Shareholders, on the other hand.
WHEREAS, certain of the Shareholders purchased an aggregate of 11,776,765
shares (the "TPG Group Block") of the Company's common stock, par value $.01 per
share (the "Common Stock"), from TPG Partners, L.P., a Delaware limited
partnership, and TPG Parallel I, L.P., a Delaware limited partnership, and an
aggregate of
14,600,000 shares of Common Stock (the "Xxxxxxx Block" and together with the TPG
Group Block, the "Shares") from Xxxxxxx, Inc., a Canadian corporation;
WHEREAS, on July 30, 1999, certain of the Shareholders entered into (i) a
Preferred Stock Purchase Agreement (the "Preferred Stock Purchase Agreement")
pursuant to which certain of the Shareholders purchased an aggregate of
1,000,000 shares of Senior Convertible Preferred Stock, par value $.10 per
share, of the Company ("Senior Preferred Stock"), which is convertible into
shares of Common Stock, and (ii) an Amended and Restated Registration Rights
Agreement (the "Prior Registration Rights Agreement") granting certain
registration rights;
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, the Company and certain of the Shareholders have entered into an
Exchange Agreement, dated July 31, 2003 (the "Exchange Agreement"), pursuant to
which, upon the terms and subject to the conditions set forth in the Exchange
Agreement, the Shareholders will exchange their shares of Senior Preferred Stock
for shares of Common Stock to be issued by the Company (the "Exchange");
WHEREAS, concurrently herewith, the Company and the Shareholders are
entering into a Second Amended and Restated Registration Rights Agreement (the
"Registration Rights Agreement") which shall become effective at the time of
closing of the Exchange;
WHEREAS, a condition to closing the Exchange is that the Company and the
Shareholders enter into a Supplementary Shareholders Agreement and the Company
and the Shareholders agree that this Agreement fully incorporates the terms of
the Supplementary Shareholders Agreement and the execution and delivery of this
Agreement by the Company and the Shareholders satisfies the conditions in the
Exchange Agreement relating to entry into the Supplementary Shareholders
Agreement; and
WHEREAS, in recognition of the transactions contemplated by the Exchange
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, the parties hereto intending to be legally bound hereby,
the parties agree as follows, effective upon the closing of the Exchange:
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ARTICLE 1
Definitions; Representations and Warranties
SECTION 1.1 Definitions. Unless otherwise specified all references to
"days" shall be deemed to be references to calendar days. For purposes of this
Agreement, the following terms shall have the following meanings:
"Actual Voting Power" shall mean, as of the date of determination, the
total voting power of all the then outstanding securities of the Company at the
time then entitled to vote for the general election of directors, without giving
effect to securities issuable upon exercise or conversion of such outstanding
securities.
"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 and BFP III.
"Apollo/Blackstone Shares" means the TPG Group Block, the Xxxxxxx Block,
and the 87,295,000 shares of Common Stock to be issued to the Apollo/Blackstone
Shareholders pursuant to the Exchange Agreement.
"Beneficial ownership" by a Person of any Voting Securities shall be
determined in accordance with the term "beneficial ownership" as defined in Rule
13d-3 under the Exchange Act as in effect on the date of this Agreement and, in
addition, "beneficial ownership" shall include securities which such Person has
the right to acquire (irrespective of whether such right is exercisable
immediately or only after the passage of time, including the passage of time in
excess of sixty (60) days) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise. For purposes of this Agreement, a Shareholder
shall be deemed to beneficially own any Voting Securities beneficially
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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 Common Stock issued by the
Company in exchange for the shares of Senior Preferred Stock pursuant to the
Exchange Agreement.
"DLJ Parent Entities" mean and includes Credit Suisse First Boston Private
Equity, Inc., Credit Suisse First Boston (USA), Inc. and Credit Suisse First
Boston, LLC. and any Person that, directly or indirectly, controls Credit Suisse
First Boston (USA), 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., DLJ EAB Partners, L.P. and DLJ ESC II L.P.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Greenwich Street Shareholders" shall mean Greenwich Street
Capital Partners II, L.P., GSCP Offshore Fund, L.P., Greenwich Fund, L.P.,
Greenwich Street Employees Fund, L.P. and TRV Executive Fund, L.P.
"Group" shall mean a "group" as such term is used in Section 13(d)(3) of
the Exchange Act as in effect on the date of this Agreement.
"Laws" shall mean all applicable foreign, federal, state and local laws,
statutes, rules, regulations, codes and ordinances.
"Person" shall mean any individual, Group, corporation, general or limited
partnership, limited liability company, governmental entity, joint venture,
estate, trust, association, organization or other entity of any kind or nature.
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"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 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
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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 Common Stock issued pursuant to the Exchange
Agreement), (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
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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
BOC III recitals
BFP III recitals
Beneficial Ownership Threshold 3.1(b)
Common Stock recitals
Company recitals
Credit Agreement 1.2(e)
Disposition 4.1
Exempt Affiliate 2.1
Future Major Investor 2.3
HSR Act 1.2(c)
Information 3.4
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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 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 Exchange 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
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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 Exchange Act, the New York
Stock Exchange, or as disclosed in the Exchange 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 Exchange Agreement, or any of the
transactions contemplated hereby and thereby.
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 any predecessor to the Original Agreement and (ii) the shares of Common
Stock which are subject to the Exchange 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
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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 Conversion Shares, and (y) with respect to the
Greenwich Street Shareholders, on the date on which the Greenwich Street
Shareholders no longer own any 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) an acquisition as a result of a stock split,
stock dividend or similar recapitalization, (B) the acquisition of shares
of Common Stock which are subject to the Exchange 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 and as reduced to reflect any such
acquisitions pursuant to Section 2.1(a)(i)(C) of the Original Agreement) 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
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shares, this Section 2.1 shall be deemed to not have been violated; and
provided, further, that no violation of this provision shall be deemed to
have occurred by reason of the indirect acquisition of beneficial ownership
of securities resulting from (x) investments in investment funds as to
which no Shareholder or Affiliate thereof has control or power to control
with respect to voting or investment decisions or (y) acquisitions of
securities by a limited partner in any Shareholder or Affiliates thereof as
to which limited partner no Shareholder or its Affiliates has control or
power to control;
(ii) make or cause to be made any proposal for a Reorganization
Transaction except for Dispositions in accordance with Article 4;
(iii) form, join or in any way participate in a Group with respect to
any securities of the Company or its Affiliates, other than with other
Shareholders or Affiliates of any Shareholder; provided, however, that in
the case of securities other than Voting Securities, Shareholders may
participate in a Group with respect thereto with the prior approval of a
majority of the entire Board of Directors (which approval is requested in a
manner which does not require disclosure publicly or to any third party);
(iv) make, or in any way cause or participate in, any "solicitation"
of "proxies" to vote (as those terms are defined in Regulation 14A under
the Exchange Act) with respect to the Company or its Affiliates, or
communicate with, seek to advise, encourage or influence any Person, in any
manner, with respect to the voting of, securities of the Company or its
Affiliates, or become a "participant" in any "election contest" (as those
terms are defined or used in Rule 14a-11 under the Exchange Act) with
respect to the Company or its Affiliates (other than non-public
communications with other Shareholders or Affiliates of any Shareholder
which would not require public disclosure by any Person or solicitation of
proxies in support of the election of Shareholder Designees, Management
Directors and Unaffiliated Directors nominated by the Board of Directors in
accordance with Section 3.1 hereof in circumstances in which a third party
is soliciting parties for the election of nominees not nominated by the
Board of Directors);
(v) initiate, propose or, except with the prior approval of a majority
of the entire Board of Directors (which approval is requested in a manner
which does not require disclosure publicly or to any third parties)
otherwise solicit stockholders for the approval of one or more stockholder
proposals with respect to the Company or its Affiliates or induce or
attempt to induce any other Person to initiate any stockholder proposal or
seek election to or seek to place a
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representative on the Board of Directors of the Company (except pursuant to
Section 3.1 of this Agreement) or its Affiliates or seek the removal of any
member of the Board of Directors of the Company or its Affiliates (for this
purpose, the actions of the Shareholder Designees in communicating (without
public disclosure or disclosure to third parties) with the Board of
Directors in their capacity as directors of the Company, and non-public
communication by a Shareholder with other Shareholders or Affiliates of any
Shareholder which would not require public disclosure by any Person, shall
not be deemed to be in contravention of this paragraph (v));
(vi) in any manner, agree, attempt, seek or propose (other than making
any request for permission with respect thereto which would not require
disclosure publicly or to any third party) to deposit any securities of the
Company or its Affiliates in any voting trust or similar arrangement or to
subject any securities of the Company or its Affiliates to any other voting
or proxy agreement, arrangement or understanding (other than any such
agreements or understandings with other Shareholders or Affiliates of any
Shareholder);
(vii) offer, sell or transfer any Voting Securities or rights to
receive Voting Securities except for Dispositions in accordance with
Article 4;
(viii) disclose any intention, plan or arrangement, or make any public
announcement (or request permission to make any such announcement other
than making any request for permission which would not require disclosure
publicly or to any third party), or induce any other Person to take any
action, inconsistent with the foregoing;
(ix) enter into any negotiations, arrangements or understandings with
any third party with respect to any of the foregoing;
(x) advise, assist or encourage or finance (or assist or arrange
financing to or for) any other Person in connection with any of the
foregoing;
(xi) otherwise act in concert with others, to seek to control or
influence the management, Board of Directors or policies of the Company or
its Affiliates (for this purpose, the actions of the Shareholder Designees
in their capacity as directors of the Company shall not be deemed to be in
contravention of this paragraph (xi)); or
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(xii) request a waiver of any of the provisions of any of paragraphs
(i) through (xii) of this Section 2.1 (except any request which would not
require disclosure publicly or to any third party);
provided, that this Section 2.1 shall not restrict or inhibit the rights of a
Shareholder to exercise its voting rights as a stockholder of the Company
(subject to Section 3.2).
(b) Affiliates of Shareholders who (i) are not Apollo/Blackstone
Shareholders or their Affiliates, (ii) are not Related Transferees of any
Shareholder, (iii) are not in possession of any material non-public Information
provided to Shareholders by the Company, its subsidiaries or representatives
pursuant to Section 3.4 hereof or otherwise, and (iv) do not have voting or
dispositive power over any 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. Based upon the foregoing representations and warranties in
this Section 2.1(c), the Company will consider the DLJ 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.
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(c) The Company shall file a petition in bankruptcy or for reorganization
or for an arrangement or any composition, readjustment, liquidation, dissolution
or similar relief pursuant to Title 11 of the United States Code or under any
similar present or future federal law or the law of any other jurisdiction or
shall be adjudicated a bankrupt or insolvent, or consent to the appointment of
or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Company or for all or any
substantial part of its property, or shall make a general assignment for the
benefit of its creditors.
(d) A petition or answer shall be filed proposing the adjudication of the
Company as bankrupt or its reorganization or arrangement, or any composition,
readjustment, liquidation, dissolution or similar relief with respect to it
pursuant to Title 11 of the United States Code or under any similar present or
future federal law or the law of any other jurisdiction, and the Company shall
consent to or acquiesce in the filing thereof, or such petition or answer shall
not be discharged or denied within 60 days after the filing thereof.
(e) The Company shall be in material breach of its obligations to
Shareholders under the Registration Rights Agreement and such breach shall not
have been cured within 20 days after receipt by the Company from Shareholders of
a written notice specifying such breach and requiring it to be remedied, and the
Company shall not in good faith be contesting whether such breach has occurred.
(f) If the Company shall, in breach of its obligations under this
Agreement, fail to nominate for election to the Board of Directors any
Shareholder Designee who satisfies the requirements for designation to the Board
of Directors set forth in Section 3.1(d).
SECTION 2.3. Modification Upon Subsequent Agreement. If (a) the Company
enters into any agreement, understanding or arrangement with any other Person or
Group (each a "Future Major Investor") relating to the Company's obligation,
whether absolute, contingent, current or future, to support or cause the
nomination of one or more Persons to the Board of Directors at the request of
the Future Major Investor, and (b) such agreement, understanding or arrangement
contains any terms with respect to the matters covered by this Article 2 that
are more favorable to the Future Major Investor than those provided to the
Shareholders hereunder, then this Article 2 shall be automatically modified to
include the more favorable terms and thereby provide the Shareholders with
rights at least as favorable and obligations no more burdensome as those given
to the Future Major Investor.
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ARTICLE 3
Board Representation and Voting
SECTION 3.1. Board Representation. (a) Until the earlier to occur of the
tenth anniversary of the purchase of shares of Senior Preferred Stock pursuant
to the Preferred Stock Purchase Agreement and the date on which the
Apollo/Blackstone Shareholders own, collectively, less than 20% of the
Apollo/Blackstone Shares (the "Shareholder Designee Period"), the Board of
Directors shall consist of no more than thirteen (13) directors during the
Shareholder Designee Period.
For so long as the Apollo/Blackstone Shareholders are entitled to at least
two Shareholder Designees under this Agreement, the Apollo/Blackstone
Shareholders shall be entitled to have one Shareholder Designee serve on each
committee of the Board of Directors other than any committee formed for the
purpose of considering matters relating to the Shareholders and as set forth
below with respect to the Nominating Committee and other than such committees on
which membership of a Shareholder Designee is prohibited by applicable law or by
the rules of the New York Stock Exchange.
(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
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Shareholders beneficially own 9% or less of the Actual Voting Power (the "Actual
Voting Power Threshold"), the Apollo/Blackstone Shareholders shall be entitled
to no more than three Shareholder Designees (even if the Apollo/Blackstone
Shareholders would otherwise be entitled to a greater number of Shareholder
Designees pursuant to clauses (A) through (E) above), and (iii) such other
persons, each of whom is (A) recommended by the Nominating Committee and (B) not
an employee or officer of or outside counsel to the Company or a partner,
employee, director, officer, affiliate or associate (as defined in Rule 12b-2
under the Exchange Act) of any Shareholder or any affiliate of a Shareholder or
as to which the Shareholders or their affiliates own at least ten percent of the
voting equity securities ("Unaffiliated Directors"). If any vacancy (whether by
death, retirement, disqualification, removal from office or other cause, or by
increase in number of directors) occurs prior to a meeting of the Company's
stockholders, the Board (i) may appoint a member of management to fill a vacancy
caused by a Management Director ceasing to serve as a director, (ii) shall
appoint, subject to Section 3.1(d), a person designated by the Apollo/Blackstone
Shareholders to fill a vacancy created by a Shareholder Designee ceasing to
serve as a director (except as a result of the reduction of the number of
Shareholder Designees entitled to be included on the Board of Directors by
reason of a decrease in the Apollo/Blackstone Shareholders' beneficial ownership
of Apollo/Blackstone Shares below any Beneficial Ownership Threshold or by
reasons of a decrease in the Shareholders' beneficial ownership of Voting
Securities below the Actual Voting Power Threshold), and (iii) may appoint a
person who qualifies as an Unaffiliated Director and is recommended by the
Nominating Committee pursuant to the procedures set forth in the following
paragraph to fill a vacancy created by an Unaffiliated Director ceasing to serve
as a director (provided, however, that in the case of a vacancy relating to an
Unaffiliated Director, if a majority of the Nominating Committee is unable to
recommend a replacement, then the Board seat with respect to this vacancy shall
remain vacant), and each such person shall be a Management Designee, Shareholder
Designee or Unaffiliated Director, as the case may be, for purposes of this
Agreement.
At all times during the Shareholder Designee Period, Unaffiliated Directors
shall be designated exclusively by a majority of a nominating committee (the
"Nominating Committee"), which shall at all times during the Shareholder
Designee Period consist of not more than four persons, two of whom shall be
Shareholder Designees (or such lesser number of Shareholder Designees as then
serves on the Board of Directors) and two of whom shall be either Management
Directors or Unaffiliated Directors. If the Nominating Committee is unable to
recommend one or more persons to serve as Unaffiliated Directors (except with
respect to any vacancy created by an Unaffiliated Director ceasing to serve as
such), then the Board of Directors shall nominate and recommend for election by
stockholders an Unaffiliated Director then serving on the Board of Directors.
Notwithstanding the foregoing, if the
-15-
Apollo/Blackstone Shareholders beneficially own less than 50% of the
Apollo/Blackstone Shares, the Nominating Committee shall be comprised of
individuals only one of whom is a Shareholder Designee.
The foregoing provisions shall be effected pursuant to an amendment to the
Company's Bylaws in a form reasonably acceptable to the parties to this
Agreement, which shall not be further amended by the Board of Directors during
the Shareholder Designee Period.
Notwithstanding the foregoing, the Company shall have no obligation to
support the nomination, recommendation or election of any Shareholder Designee
pursuant to this Section 3.1(b) or any other obligation under this Section 3.1
if the Apollo/Blackstone Shareholders are in breach of any material provision of
this Agreement.
(c) Upon any decrease in Apollo/Blackstone Shareholders' beneficial
ownership of Apollo/Blackstone Shares below any Beneficial Ownership Threshold
or any decrease in the Shareholders beneficial ownership of Voting Securities
below the Actual Voting Power Threshold, the Apollo/Blackstone Shareholders
shall cause a number of Shareholder Designees to offer to immediately resign
from the Company's Board of Directors such that the number of Shareholder
Designees serving on the Board of Directors immediately thereafter will be equal
to the number of Shareholder Designees which the Apollo/Blackstone Shareholders
would then be entitled to designate under Section 3.1(b). Upon termination of
the Shareholder Designee Period, the Apollo/Blackstone Shareholders shall
promptly cause all of the Shareholder Designees to offer to resign immediately
from the Board of Directors and any committees thereof and the Company's
obligations under this Section 3.1 shall terminate.
(d) Notwithstanding the provisions of this Section 3.1, the
Apollo/Blackstone Shareholders shall not be entitled to designate any person to
the Company's Board of Directors (or any committee thereof) in the event that
the Company receives a written opinion of its outside counsel that a Shareholder
Designee would not be qualified under any applicable law, rule or regulation to
serve as a director of the Company or if the Company objects to a Shareholder
Designee because such Shareholder Designee has been involved in any of the
events enumerated in Item 2(d) or (e) of Schedule 13D or such person is
currently the target of an investigation by any governmental authority or agency
relating to felonious criminal activity or is subject to any order, decree, or
judgment of any court or agency prohibiting service as a director of any public
company or providing investment or financial advisory services and, in any such
event, the Apollo/Blackstone Shareholders shall withdraw the designation of such
-16-
proposed Shareholder Designee and designate a replacement therefor (which
replacement Shareholder Designee shall also be subject to the requirements of
this Section). The Company shall use its reasonable best efforts to notify the
Apollo/Blackstone Shareholders of any objection to a Shareholder Designee
sufficiently in advance of the date on which proxy materials are mailed by the
Company in connection with such election of directors to enable the
Apollo/Blackstone Shareholders to propose a replacement Shareholder Designee in
accordance with the terms of this Agreement.
(e) Each Shareholder Designee serving on the Board of Directors shall be
entitled to all compensation and stock incentives granted to directors who are
not employees of the Company on the same terms provided to, and subject to the
same limitations applicable to, such directors.
SECTION 3.2. Voting. (a) Each Shareholder agrees that during the Standstill
Period such Shareholder shall, and shall cause its Affiliates and any Person
which is a member of any Group of which such Shareholder or any of its
Affiliates is a member to, be present, in person or represented by proxy, at all
meetings of shareholders of the Company so that all Voting Securities
beneficially owned by such Shareholder shall be counted for the purpose of
determining the presence of a quorum at such meetings. Each Shareholder agrees
that during the Standstill Period:
(i) In connection with the election of directors of the Company, such
Shareholder shall vote or cause to be voted all Voting Securities
beneficially owned by such Shareholder to elect those individuals nominated
in accordance with the provisions of Section 3.1.
(ii) In connection with any proposal for a Reorganization Transaction,
such Shareholder shall vote or cause to be voted, or consent with respect
to, all Voting Securities beneficially owned by such Shareholder in the
manner recommended by a majority of the entire Board of Directors.
(iii) In connection with other proposals submitted to shareholders of
the Company, such Shareholder shall be free to vote or cause to be voted,
or consent with respect to, all Voting Securities beneficially owned by
such Shareholder in its discretion.
SECTION 3.3. Notices of Dispositions of Voting Securities. Not later than
the tenth day following the end of any calendar month during the Standstill
Period in which one or more Dispositions of Voting Securities by a Shareholder
or any of its Affiliates shall have occurred, such Shareholder shall use its
reasonable best efforts to give written notice to the Company of all such
Dispositions (in the case of Dispositions
-17-
by Affiliates, to the extent it has knowledge) unless any such Disposition has
been reflected in a public filing that was delivered to the Company on or in
advance of the date upon which notice thereof under this Section 3.3 would have
been due. Such notice shall state the date upon which each such Disposition was
effected, the number and type of Voting Securities involved in each such
Disposition, the means by which each such Disposition was effected and, to the
extent known, the identity of the Person acquiring Voting Securities.
SECTION 3.4. Access to Information. The Company will provide each
Shareholder during normal business hours with reasonable prior written notice
with (i) access to the books and records of the Company and information relating
to the Company, its properties, operations, financial condition and affairs
("Information") and (ii) the opportunity to consult with management of the
Company from time to time regarding the Company, its properties, operations,
finances and affairs. Certain of the Shareholders have requested the Information
and consultation rights provided herein to enable the Shares held by such
Shareholders to qualify as a "venture capital investment" as to which such
Shareholders have "management rights," in each case as such terms are defined in
Department of Labor Regulation Section 2510.3-101(d); provided, however, that
nothing herein shall require the Company to furnish such Shareholders with more
than rights of access to Information and consultation provided herein regardless
of whether such rights are sufficient for such Shareholders to comply with
venture capital operating company requirements. In furtherance of the foregoing,
the Company agrees to inform the Shareholders with respect to any corporate
actions which the Company considers to be major or significant, including,
without limitation, extraordinary dividends, mergers, acquisitions or
dispositions of significant assets, issuances of significant amounts of debt or
equity and material amendments to the certificate of incorporation or by-laws of
the Company, and (subject to the limitations specified in the proviso in the
preceding sentence) to provide the Shareholders with the opportunity to consult
with management of the Company with respect to such matters. The Shareholders
agree to hold in strict confidence all nonpublic Information furnished to them
and to use all Information only in connection with the management of their
investment in the Company, except that the Shareholders may disclose any
information that (i) is or becomes generally available to the public other than
as a result of disclosure by the Shareholders, and (ii) is or becomes available
to the Shareholders from a source other than the Company; provided, however,
that, to the knowledge of the Shareholders, the source is not bound by a
confidentiality obligation with the Company in respect thereof. If any
Shareholder is required by a court or administrative agency to disclose any of
the nonpublic Information, the Shareholder shall promptly notify the Company of
such requirement so that the Company may at its own expense oppose such
requirement or seek a protective order and request confidential treatment of
such Information. It is agreed that if the Shareholder is nonetheless
-18-
compelled to disclose the Information, the Shareholder may disclose such portion
of the Information which is legally required without liability hereunder. In any
event, the Shareholder will not oppose action by the Company to obtain a
protective order or other reliable assurance that confidential treatment will be
accorded the Information. Nothing herein shall permit any Shareholder to
disclose material non-public Information to permit such Shareholder to purchase
or sell securities of the Company in compliance with the federal securities
laws.
ARTICLE 4
Transfer Restrictions
SECTION 4.1. Restrictions on Dispositions. During the Standstill Period,
each Shareholder shall not, and shall cause its Affiliates not to, directly or
indirectly (including, without limitation, through the disposition or transfer
of control of another Person), sell, assign, donate, transfer, pledge,
hypothecate, grant any option with respect to or otherwise dispose of any
interest in (or enter into an agreement or understanding with respect to the
foregoing) any Voting Securities (a "Disposition"), except as set forth below in
this Section 4.1. Without limiting the generality of the foregoing, any sale of
securities held by any Shareholder or any of its Affiliates which is currently
(or following the passage of time, the occurrence of any event or the giving of
notice), directly or indirectly, exchangeable or exercisable for, or convertible
into, any Voting Securities shall constitute a Disposition of such Voting
Securities.
Dispositions may be effected by a Shareholder during the Standstill Period
as follows:
(a) No Dispositions of any nature of the shares of Common Stock acquired
pursuant to the Exchange Agreement may be made prior to the first anniversary of
the acquisition of shares of Common Stock pursuant to the Exchange Agreement,
except pursuant to Sections 4.1(e) and 4.1(f). For avoidance of doubt, nothing
in this Section 4.1(a) shall impose limitations on Dispositions of the TPG Group
Block or the Xxxxxxx Block.
(b) As of the date of the acquisition of shares of Common Stock pursuant to
the Exchange Agreement (the "Purchase Date"), with respect to the Shares and any
other shares of Common Stock acquired in compliance with the Original Agreement,
and after the first anniversary of the Purchase Date, with respect to the
Conversion Shares, Dispositions of Voting Securities may be made at any time in
compliance with the Registration Rights Agreement.
-19-
(c) As of the Purchase Date, with respect to the Shares and any other
shares of Common Stock acquired in compliance with the Original Agreement, and
after the first anniversary of the Purchase Date, with respect to all other
Conversion Shares, 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 any other
shares of Common Stock acquired in compliance with the Original Agreement, and
after the first anniversary of the Purchase Date, with respect to the Conversion
Shares, 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.
(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 exchange of shares of
Senior Preferred Stock for 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
-20-
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
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;
-21-
(b) If to Shareholders, to:
Apollo Management, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
and:
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 LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
and:
Greenwich Street Investment II, L.L.C.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
-22-
and:
DLJ Merchant Banking II, Inc.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Shearman & Sterling LLP
000 Xxxxxxxxx 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
-23-
THE ABSENCE OF SUCH A REGISTRATION THEREUNDER OTHER THAN PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS AND DELIVERY TO ALLIED WASTE
INDUSTRIES, INC. OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT TO
THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THOSE
LAWS."
(b) Each Shareholder shall present or cause to be presented promptly all
certificates representing Voting Securities beneficially owned by such
Shareholder or any of its Affiliates, for the placement thereon of a legend
substantially to the following effect, which legend will remain thereon during
the Standstill Period as long as such Voting Securities are beneficially owned
by any Shareholder or an Affiliate of any Shareholder:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS
OF A THIRD AMENDED AND RESTATED SHAREHOLDERS AGREEMENT, DATED AS OF
DECEMBER 18, 2003, 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
-24-
injunctive relief to prevent any violation of, the terms of this Agreement, and
the other parties hereto will not take action, directly or indirectly, in
opposition to the Moving Party seeking such relief on the grounds that any other
remedy or relief is available at law or in equity. The parties further agree
that no bond shall be required as a condition to the granting of any such
relief.
SECTION 5.4. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties with respect to the transactions
contemplated hereby; provided that the Original Shareholders Agreement shall
remain in full force and effect until the closing of the Exchange pursuant to
the Exchange Agreement and the representations and warranties of the parties set
forth in Sections 1.2 and 1.3 of the Original Agreement and in Sections 1.2 and
1.3 of the Amended and Restated Shareholders Agreement dated as of April 21,
1997, by and between the Company and certain of the Shareholders, 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.
-25-
SECTION 5.8. No Waiver. Any waiver by any party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
SECTION 5.9. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Company and Shareholders, and to their
respective successors and assigns other than, in the case of Shareholders,
transferees that are not Related Transferees, including any successors to the
Company or Shareholders or their businesses or assets as the result of any
merger, consolidation, reorganization, transfer of assets or otherwise, and any
subsequent successor thereto, without the execution or filing of any instrument
or the performance of any act; provided that no party may assign this Agreement
without the other party's prior written consent, except by the Shareholders to a
Shareholder or a Related Transferee as expressly provided in this Agreement (and
that nothing herein restricts the transfer of any of the rights of Shareholders
under the Registration Rights Agreement in accordance the terms of the
Registration Rights Agreement).
SECTION 5.10. Governing Law. This Agreement will be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware, without giving effect to the conflict of laws principles thereof.
SECTION 5.11. Further Assurances. From time to time on and after the date
of this Agreement, the Company and Shareholders, as the case may be, shall
deliver or cause to be delivered to the other party hereto such further
documents and instruments and shall do and cause to be done such further acts as
the other parties hereto shall reasonably request to carry out more effectively
the provisions and purposes of this Agreement, to evidence compliance herewith
or to assure that it is protected in acting hereunder.
SECTION 5.12. Consent to Jurisdiction and Service of Process. Any legal
action or proceeding with respect to this Agreement or any matters arising out
of or in connection with this Agreement, and any action for enforcement of any
judgment in respect thereof shall be brought exclusively in the state or federal
courts located in the State of Delaware, and, by execution and delivery of this
Agreement, the Company and Shareholders each irrevocably consent to service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, or by recognized international express
-26-
carrier or delivery service, to the Company or Shareholders at their respective
addresses referred to in this Agreement. The Company and Shareholders each
hereby irrevocably waives any objection which it may now or hereafter have to
the laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Agreement brought in the courts referred to above
and hereby further irrevocably waives and agrees, to the extent permitted by
applicable law, not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
Nothing in this Agreement shall affect the right of any party hereto to serve
process in any other manner permitted by law.
SECTION 5.13. Shareholder Action. The Company shall be entitled to rely
upon any written notice, designation, or instruction signed by Apollo Management
IV, L.P. and BCP (the "Representatives") as a notice, designation or instruction
of all Shareholders and the Company shall not be liable to any Shareholder if
the Company acts in accordance with and relies upon such writing.
Notwithstanding the foregoing, however, the Company shall not be entitled to
rely upon any written notice, designation or instruction signed by the
Representatives as a notice, designation or instruction of the DLJ Shareholders
or the Greenwich Street Shareholders if such notice, designation or instruction
states that it relates to the first parenthetical proviso contained in the first
paragraph of Section 2.1(a) or Section 2.1(b), 3.2(a)(iii), 3.4, 4.1(c), 5.4 or
5.9 of this Agreement (the "Specific Rights"). Each of the Shareholders
acknowledges that the Representatives have full power and authority to act on
their behalf; provided, however, that none of the DLJ Shareholders and the
Greenwich Street Shareholders acknowledge the power or authority of the
Representatives to act on their behalf with respect to the Specific Rights.
-27-
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:
-28-
APOLLO/AW LLC
By: Apollo Management IV, L.P.
its Manager
By: AIF IV Management, Inc.
its General Partner
By:
-----------------------------
Name:
Title:
APOLLO INVESTMENT FUND III, L.P.
APOLLO OVERSEAS PARTNERS III, L.P.
APOLLO (UK) PARTNERS III, L.P.
By: Apollo Advisors II, L.P.
its General Partner
By: Apollo Capital Management II, Inc.
its General Partner
By:
-----------------------------
Name:
Title:
-29-
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:
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.
-30-
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:
-----------------------------
Name:
Title:
GREENWICH FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:
-----------------------------
Name:
Title:
GREENWICH STREET EMPLOYEES FUND, L.P.
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:
-----------------------------
Name:
Title:
TRV EXECUTIVE FUND, L.P.
-31-
By: GREENWICH STREET INVESTMENTS II, L.L.C.,
its General Partner
By:
-----------------------------
Name:
Title:
DLJMB FUNDING II, INC.
By:
-----------------------------
Name:
Title:
DLJ MERCHANT BANKING PARTNERS II, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:
-----------------------------
Name:
Title:
-32-
DLJ MERCHANT BANKING PARTNERS II-A, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:
-----------------------------
Name:
Title:
DLJ DIVERSIFIED PARTNERS, L.P.
By: DLJ Diversified Partners, Inc.
Managing General Partner
By:
-----------------------------
Name:
Title:
DLJ DIVERSIFIED PARTNERS-A, L.P.
By: DLJ Diversified Partners, Inc.
Managing General Partner
By:
-----------------------------
Name:
Title:
-33-
DLJ MILLENNIUM PARTNERS, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:
-----------------------------
Name:
Title:
DLJ MILLENNIUM PARTNERS-A, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By:
-----------------------------
Name:
Title:
DLJ FIRST ESC L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By:
-----------------------------
Name:
Title:
-34-
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:
-35-
DLJ ESC II L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By:
-----------------------------
Name:
Title:
---------------------------------------
Xxxxxxx X. Xxxxxx
---------------------------------------
Xxxx Xxxxxxx
---------------------------------------
Xxxxxxx Xxxxx
---------------------------------------
Xxxxx Xxxxxxxx
-36-
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
By:
-----------------------------
Name:
Title:
-37-
