<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.1)
Allied Waste Industries, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
019589
- --------------------------------------------------------------------------------
(CUSIP Number)
Michael A. Puglisi
Blackstone Management Associates III L.L.C.
345 Park Avenue
New York, New York 10154
(212) 935-2626
with a copy to
Wilson S. Neely, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
(212) 455-2000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
March 7, 1999
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Exchange Act") or otherwise subject to the liabilities of that section of
the Exchange Act but shall be subject to all other provisions of the Exchange
Act (however, see the Notes).
Page 1 of 17 Pages
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SCHEDULE 13D
CUSIP No. 019589100 Page 2 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Blackstone Capital Partners II Merchant Banking Fund L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT / /
TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 26,376,765
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 26,376,765
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
26,376,765
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.4%
14 TYPE OF REPORTING PERSON
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 019589100 Page 3 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Blackstone Offshore Capital Partners II L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT / /
TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 26,376,765
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 26,376,765
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
26,376,765
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.4%
14 TYPE OF REPORTING PERSON
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 019589100 Page 4 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Blackstone Family Investment Partnership II L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT / /
TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 26,376,765
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 26,376,765
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
26,376,765
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.4%
14 TYPE OF REPORTING PERSON
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 019589100 Page 5 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Blackstone Management Associates II L.L.C.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT / /
TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 26,376,765
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 26,376,765
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
26,376,765
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.4%
14 TYPE OF REPORTING PERSON
oo
<PAGE>
SCHEDULE 13D
CUSIP No. 019589100 Page 6 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Blackstone Capital Partners III Merchant Banking Fund L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT / /
TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
14 TYPE OF REPORTING PERSON
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 019589100 Page 7 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Blackstone Management Associates III L.L.C.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT / /
TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
14 TYPE OF REPORTING PERSON
OO
<PAGE>
SCHEDULE 13D
CUSIP No. 019589100 Page 8 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Peter G. Peterson
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT / /
TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 26,376,765
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 26,376,765
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
26,376,765
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.4%
14 TYPE OF REPORTING PERSON
IN
<PAGE>
SCHEDULE 13D
CUSIP No. 019589100 Page 9 of 17 Pagesy
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stephen A. Schwarzman
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT / /
TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 26,376,765
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 26,376,765
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
26,376,765
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.4%
14 TYPE OF REPORTING PERSON
IN
<PAGE>
Page 10 of 17 Pages
AMENDMENT PURSUANT TO RULE 13d-2
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
================================================================================
The Statement on Schedule 13D of Blackstone Capital Partners II
Merchant Banking Fund L.P., Blackstone Offshore Capital Partners II L.P.,
Blackstone Family Investment Partnership II L.P., Blackstone Management
Associates II L.L.C., Peter G. Peterson and Stephen A. Schwarzman, dated April
15, 1997, relating to the Common Stock, par value $0.01 per share, of Allied
Waste Industries, Inc., a Delaware corporation (the "Issuer"), is hereby amended
as set forth herein. Responses to each item below may be incorporated by
reference into each other item, as applicable. Capitalized terms used herein but
not defined shall have the meanings set forth in the original Statement.
Item 2. Identity and Background.
Item 2 is hereby amended by adding Blackstone Capital Partners III
Merchant Banking Fund L.P., a Delaware limited partnership ("BCP III"), and
Blackstone Management Associates III L.L.C., a Delaware limited liability
company ("BMA III"), to the list of Reporting Persons jointly filing the
Statement as well as to the definition of "Blackstone Entities." Furthermore,
each reference to BCP II and BMA II is hereby amended to include a parallel
reference to BCP III and BMA III, respectively.
Item 2 is further amended by deleting references to Anthony Grillo and
Glenn H. Hutchins from the list of Members and adding Robert L. Friedman and
Richard C. Lappin to the list of Members.
Schedule I is hereby amended by adding the following text after the
seventh paragraph thereof:
Apollo Management IV, L.P., a Delaware limited partnership ("Apollo
Management"), serves as manager of Apollo Investment Fund IV, L.P. and Apollo
Overseas Partners IV, L.P. (together, "Apollo IV"), private securities
investment funds, and manages their day-to-day operations. Apollo Management is
an affiliate of the Apollo Entities.
AIF IV Management, Inc., a Delaware corporation ("AIF IV Management"),
is principally engaged in the business of serving as general partner of Apollo
Management. Messrs. Leon D. Black and John J. Hannan serve as directors and
executive officers of AIF IV Management.
The business address of Apollo Management and AIF IV Management is 1301
Avenue of the Americas, New York, NY 10019. The business address of Apollo IV is
c/o Apollo Advisors IV, L.P., Two Manhattanville Road, Purchase, New York 10577.
<PAGE>
Page 11 of 17 Pages
Item 3. Source and Amount of Funds of Other Consideration.
Item 3 is hereby amended by adding the following text at the end
thereof:
The sources of funds for any future purchases by Blackstone (defined
below) of shares of the Issuer's preferred stock (as described below in Item 6)
will be capital contributions by the general and limited partners of Blackstone.
Item 4. Purpose of Transaction.
Item 4 is hereby amended by adding the following text at the end
thereof:
The response to Item 6 of this Schedule 13D is hereby incorporated by
reference.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Item 6 is hereby amended by adding the following text at the end
thereof:
On March 7, 1999, BCP III, on behalf of one or more affiliated
investment funds under common management and/or its designees ("Blackstone"),
entered into an equity commitment letter agreement (the "Equity Commitment
Letter Agreement") with Apollo Management (together with its designees,
"Apollo"), certain affiliates of Greenwich Street Investments II, L.L.C.
(together with its designees, "Greenwich Capital") and DLJ Merchant Banking
Partners II, L.P. and certain of its affiliates ("DLJ," and together with
Blackstone, Apollo and Greenwich Capital, the "Investors") pursuant to which the
Investors severally agreed, subject to certain conditions, to purchase from the
Issuer in a private placement an aggregate of 1,000,000 shares of a new series
of preferred stock (the "Preferred Stock"), which will initially be
unregistered, for an aggregate purchase price of $1 billion (collectively, the
"Equity Commitment"), including an equity commitment by Blackstone to purchase
350,000 shares of Preferred Stock for $350,000,000. The Equity Commitment was
made in connection with the Agreement and Plan of Merger, dated March 7, 1999
(the "Merger Agreement"), between the Issuer and Browning-Ferris Industries,
Inc. ("Browning-Ferris"), pursuant to which the Issuer proposed to acquire all
of the outstanding capital stock of Browning-Ferris (the "Acquisition"), and for
the purpose of providing the equity capital in support of the Acquisition. In
addition, the Acquisition is proposed to be funded with between $8 billion and
$9 billion principal amount of new indebtedness. Pursuant to the Equity
Commitment Letter Agreement, the commitment of the Investors will terminate upon
the occurrence of a number of events, including upon the termination of the
Merger Agreement, upon the Issuer's notification to the Investors that the
Issuer has elected not to consummate the Acquisition, or if the Acquisition has
not been consummated by December 31, 1999.
It is expected that a final allocation of the equity commitment by BCP
III will be made among Blackstone prior to the closing of the Acquisition. The
number of shares reported on the cover pages to this Schedule 13D excludes any
shares of Preferred Stock, which have not yet been created or issued.
The following is a summary of certain expected terms of the Preferred
Stock:
Liquidation Preference. The Preferred Stock will have an initial
liquidation preference of $1,000 per share, plus the value of accrued and unpaid
dividends (the "Liquidation Preference"). Upon any
<PAGE>
Page 12 of 17 Pages
liquidation, dissolution or other winding up of the affairs of the Issuer, and
before any distribution is made to any holder of any equity security of the
Issuer, the holders of the Preferred Stock will receive for each share of such
Preferred Stock the greater of (i) the Liquidation Preference and (ii) the
aggregate amount that would be payable to the holder if such share of Preferred
Stock had been converted into Common Stock immediately prior to the liquidation,
dissolution or winding up, as the case may be.
Dividends. Holders of Preferred Stock are entitled to receive quarterly
dividends at an annual rate as follows, but in no event less than the aggregate
quarterly dividend last declared with respect to the aggregate shares of Common
Stock into which the Preferred Stock is convertible: (i) with respect to
quarterly dividends accruing prior to the date on which stockholder approval for
the conversion of the Preferred Stock to Common Stock ("Stockholder Approval")
has been obtained, (A) 6.5% of the Liquidation Preference per annum during the
first six months after the date of issuance of the Preferred Stock (the "Issue
Date"), and (B) thereafter, 6.5% of the Liquidation Preference per annum plus an
additional 1% of the Liquidation Preference per annum for each six month period
after the Issue Date until Stockholder Approval is obtained (but not to exceed
12% of the Liquidation Preference per annum), and (ii) with respect to quarterly
dividends accruing on or after Stockholder Approval has been obtained, 6.5% of
the Liquidation Preference per annum; provided, that after the tenth anniversary
of the Issue Date, dividends shall accrue at the rate of 12% of the Liquidation
Preference per annum.
All dividends on the Preferred Stock that are not paid in cash as of
the applicable dividend payment date will be (i) added to the Liquidation
Preference as of such date and will thereafter no longer be payable in cash, and
(ii) with respect to dividends accruing on or after the fifth anniversary of the
Issue Date that are not paid in cash on the applicable dividend payment date,
will accrue at the rate of 12% of the then-applicable Liquidation Preference per
annum
Conversion Rights. From and after receipt of Stockholder Approval, each
share of Preferred Stock will be convertible at the option of the holder into
the number of fully paid and nonassessable shares of Common Stock equal to the
then-applicable Liquidation Preference divided by a conversion rate of $18.00.
For so long as Stockholder Approval has not been obtained, each share of
Preferred Stock will be convertible at the option of the holder into the number
of shares of a new series of junior preferred stock (the "Junior Preferred
Stock") determined pursuant to the preceding sentence. The Junior Preferred
Stock will be non redeemable, convertible into Common Stock on a share for share
basis (subject to certain restrictions), and will have at least all rights of
the Common Stock, including the right to participate no less than pari passu
with the Common Stock as to dividends and any other distributions declared on
the Common Stock, the right to preferred payments upon liquidation and the right
to vote with the Common Stock on a share for share basis. The conversion
privileges set forth above will include customary anti-dilution protection.
Optional Redemption. The Issuer will not have the right to redeem the
Preferred Stock prior to the later of (a) the third anniversary of the Issue
Date and (b) receipt of Stockholder Approval. Thereafter, the Issuer will have
the right to redeem the Preferred Stock, in whole but not in part, at the
then-applicable Liquidation Preference; provided, that if such redemption is
prior to the fifth anniversary of the Issue Date, the Issuer shall have such
right only if the average closing price of the Common Stock for the preceding
thirty consecutive trading days exceeds 150% of the conversion price then in
effect. Any such redemption shall be effected no earlier than thirty days after
the Investors receive notice of redemption.
Ranking. The Preferred Stock will rank senior to all existing and
future classes of common or preferred stock of the Issuer.
<PAGE>
Page 13 of 17 Pages
Voting Rights. Holders of Preferred Stock and Junior Preferred Stock
have the right to vote, together with the Common Stock, as a single class, on
all matters on which holders of the Common Stock are entitled to vote, based
upon the number of shares of Common Stock then issuable upon the conversion of
such Preferred Stock or in lieu of whose issuance the Junior Preferred Stock was
issued. The Preferred Stock and the Junior Preferred Stock will each be entitled
to vote as a separate class with respect to amendments to the Issuer's
certificate of incorporation, by merger or otherwise, that adversely affect the
rights of each such class of stock. In addition, for so long as any shares of
Preferred Stock or Junior Preferred Stock remain outstanding, the holders of
Preferred Stock and Junior Preferred Stock, voting separately as a class, will
have the right to elect the number of directors of the Issuer that Blackstone
and Apollo or their affiliates would be entitled to elect as described below.
Stockholder Approval. The Issuer has agreed to used its best efforts to
obtain Stockholder Approval and has entered into certain specific undertakings
in that regard.
Change of Control. Upon a change of control, the Issuer will offer to
purchase any and all shares of Preferred Stock at 101% of the then-applicable
Liquidation Preference.
Preferred Stock Purchase Agreement. The shares of Preferred Stock will
be issued pursuant to a stock purchase agreement reasonably satisfactory to the
Investors. Such stock purchase agreement will contain a customary agreement by
the Investors to vote any shares of Common Stock, Preferred Stock and Junior
Preferred Stock beneficially owned by them or their affiliates in favor of
Stockholder Approval.
Investment Agreement. The Investors will also enter into an Amended and
Restated Investment Agreement, which will, among other things, add the new
Investors as parties thereto, allocate certain rights and obligations among the
Investors, provide that each party will vote in accordance with the terms
thereof, and provide certain restrictions on the transfer of shares by the new
Investors in a manner unavailable to affiliates under Federal securities laws.
The Issuer, the Reporting Persons and certain affiliates of Apollo
(such affiliates of Apollo, together with the Reporting Persons, the
"Shareholders") have entered into a second letter agreement on March 7, 1999
(the "Amendments Letter Agreement") providing for certain amendments to (i) the
Amended Shareholders Agreement and (ii) the Registration Rights Agreement.
In accordance with the Amendments Letter Agreement, upon the issuance
of the Preferred Stock to the Investors, the Amended Shareholders Agreement will
be amended, among other things, (i) to expand the terms of the Amended
Shareholders Agreement, generally, to cover the Preferred Stock, any securities
into which the Preferred Stock is convertible and the Common Stock, (ii) to
extend the standstill periods relating to (a) certain acquisitions and other
actions, and (b) certain dispositions to a period of ten years and one year from
the Issue Date, respectively (subject to earlier termination in certain
circumstances), (iii) to extend the period during which Shareholders have the
right to designate directors of the Issuer to ten years from the Issue Date, and
(iv) to increase from four to five the maximum number of directors of the Issuer
that the Shareholders are entitled to designate, subject to a reduction in the
number of such designees if the Shareholders decrease their ownership of shares
by specified percentages.
In further accordance with the Amendments Letter Agreement, upon the
issuance of the Preferred Stock to the Investors, the Registration Rights
Agreement will be amended to provide, among other things, (i) that the
definition of Registrable Securities will include Preferred Stock and any
securities into which it is convertible, (ii) for six additional demand
registrations (in addition to the three demand registrations currently
<PAGE>
Page 14 of 17 Pages
provided) covering the Preferred Stock, any securities into which it is
convertible and the Common Stock, (iii) for a minimum number of shares and
minimum gross proceeds relating to shares for which Blackstone and Apollo may
demand registration, and (iv) for certain piggyback rights for the
non-Apollo/Blackstone-affiliated Shareholders.
The foregoing descriptions do not purport to be complete and are
qualified in their entirety by reference to the Equity Commitment Letter
Agreement and the Amendments Letter Agreement, a copy of each of which has been
filed as an exhibit to this Schedule 13D and is incorporated herein by
reference.
The Reporting Persons retain the right to change their investment
intent, to propose one or more possible transaction to the Issuer's board, to
acquire additional shares of preferred stock or Common Stock from time to time
or to sell or otherwise dispose of all or part of the Preferred Stock, Junior
Preferred Stock or Common Stock beneficially owned or acquired by them in any
manner permitted by law. In the event of a material change in the present plans
or intentions of the Reporting Persons, the Reporting Persons will further amend
this Schedule 13D to reflect such change.
The statements in this Schedule 13D shall not be construed as an
admission that the Reporting Persons and any other persons or entities
constitute a "group" for purposes of Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules thereunder. Further, the Reporting
Persons disclaim any pecuniary interest in any securities of the Issuer held by
any other person or entity.
<PAGE>
Page 15 of 17 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
BLACKSTONE CAPITAL PARTNERS II
MERCHANT BANKING FUND L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES II L.L.C., its general partner
By: /s/ Howard Lipson
-----------------------------------------------
Member
BLACKSTONE OFFSHORE CAPITAL PARTNERS II L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES II L.L.C., its general partner
By: /s/ Howard Lipson
-----------------------------------------------
Member
BLACKSTONE FAMILY INVESTMENT PARTNERSHIP II L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES II L.L.C., its general partner
By: /s/ Howard Lipson
-----------------------------------------------
Member
BLACKSTONE MANAGEMENT ASSOCIATES II L.L.C.
By: /s/ Howard Lipson
-----------------------------------------------
Member
<PAGE>
Page 16 of 17 Pages
BLACKSTONE CAPITAL PARTNERS III MERCHANT
BANKING FUND L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES III L.L.C., its general partner
By: /s/ Howard Lipson
-----------------------------------------------
Member
BLACKSTONE MANAGEMENT ASSOCIATES III L.L.C.
By: /s/ Howard Lipson
-----------------------------------------------
Member
/s/ Howard Lipson
----------------------------------------------------
Peter G. Peterson
By: Howard A. Lipson Attorney-in-fact
/s/ Howard Lipson
----------------------------------------------------
Stephen A. Schwarzman
By: Howard A. Lipson Attorney-in-fact
Dated: March 10, 1999
<PAGE>
Page 17 of 17 Pages
EXHIBIT INDEX
The Exhibit Index is hereby amended by adding the following text at the end
thereof, the documents to which such text refers being attached hereto:
Exhibit 99.11 Equity Commitment Letter Agreement, dated as of March 7, 1999,
by and among Blackstone, Apollo, Greenwich Capital and DLJ, on
the one hand, and the Issuer, on the other, relating to the
purchase of 1,000,000 shares of the Issuer's Preferred Stock
Exhibit 99.12 Amendments Letter Agreement, dated as of March 7, 1999,
between Blackstone, Apollo and the Issuer, relating to certain
amendments to the Amended Shareholders Agreement and the
Registration Rights Agreement
Exhibit 99.13 Joint Filing Agreement, dated as of March 10, 1999, by and
among BCP II, BOCP II, BFIP II, BMA II, BCP III and BMA III
relating to the filing of a joint amendment to Schedule 13D
Exhibit 99.14 Power of Attorney of Peter G. Peterson, dated as of March 10,
1999
Exhibit 99.15 Power of Attorney of Stephen A. Schwarzman, dated as of
March 10, 1999
<PAGE>
Exhibit 99.11
March 7, 1999
Allied Waste Industries, Inc.
15880 North Greenway-Hayden Loop
Scottsdale, Arizona 85260
Equity Commitment Letter
------------------------
Ladies and Gentlemen:
You have advised us that you have entered into an agreement, dated the
date hereof (the "Agreement"), with the corporation referred to as Blue (the
"Target") pursuant to which you will acquire (the "Acquisition") all of the
outstanding capital stock of the Target. References to the "Company" mean you
and your subsidiaries. Capitalized terms used but not otherwise defined herein
shall have the meaning given thereto in the Agreement.
You have advised us that the total funds necessary to consummate the
Acquisition and to pay related fees and expenses will be approximately $9
billion. (The approximate sources and uses of the funds necessary to consummate
the Acquisition are set forth on Exhibit A hereto.) Such funds will be provided
by (i) the incurrence of up to $9.750 billion principal amount of indebtedness
(the "Bank Financing") under a replacement bank credit facility on the terms set
forth in the bank commitment letter, dated the date hereof (the "Bank Commitment
Letter"), and (ii) the issuance and sale by you of 1,000,000 shares (the
"Shares") of a newly created series of preferred stock having the terms set
forth on Exhibit B hereto, at an aggregate purchase price of $1.0 billion
(together with the Bank Financing, the "Financing"). The Acquisition, the
Financing and the other transactions contemplated hereby are collectively
referred to herein as the "Transactions."
You agree to sell to each of the undersigned, or one or more of their
respective affiliated investment funds under management and/or designees
(collectively, the "Investors"), and each of the undersigned, severally and not
jointly, commits to
purchase, or to cause one or more of its affiliated investment funds under
management and/or designees to purchase, upon the terms and subject to the
conditions set forth or referred to herein and the Exhibits attached hereto,
including, but not limited to Exhibit C (collectively, the "Commitment Letter"),
the number of Shares set forth under its name on the signature page hereto. The
purchase of the Shares shall take place simultaneously with the consummation of
the Merger, on a date that you will designate to us in writing no later than ten
days prior to such date.
Upon the earlier of (i) the effective time of the Merger and (ii) the
Target paying or becoming obligated to pay the Company any amounts by reason of,
or in connection with, the termination of the Agreement (including, without
limitation, any amounts payable pursuant to Section 5.11(b) of the Agreement),
you shall as promptly as reasonably practicable pay by wire transfer of
immediately available funds to Apollo Management IV, LP or its designees
("Apollo"), Blackstone Management Partners III LLC ("Blackstone"), GSCP, Inc.
and DLJ Merchant Banking II, Inc., or its designee, a non-refundable transaction
fee of $11.0 million, $8.75 million, $2.5 million and $2.75 million,
respectively.
You agree (a) to indemnify and hold harmless us, our affiliates and
partners, and the respective officers, directors, members, employees, advisors
and agents of each of us, our affiliates and partners (each, an "indemnified
person"), from and against (and to reimburse each indemnified person as the same
are incurred) any and all losses, claims, damages, liabilities, costs and
expenses (collectively, "Losses") to which any indemnified person may become
subject or incur directly or indirectly based upon, arising out of, or in
connection with this Commitment Letter, the Financing, the use of the proceeds
thereof, the other Transactions (including the Acquisition) or any related
transaction or any claim, litigation, investigation or proceeding relating to
any of the foregoing, regardless of whether any indemnified person is a party
thereto, and to reimburse each indemnified person upon demand for any reasonable
legal or other reasonable out of pocket expenses incurred in connection with
investigating or defending any of the foregoing, provided that the foregoing
indemnity will not, as to any indemnified person, apply to Losses to the extent
they are found by a final, non-appealable judgment of a court to arise from the
willful misconduct or gross negligence of such indemnified person, and (b)
whether or not the Financing is consummated, to reimburse us and our affiliates
on demand for all reasonable out-of-pocket expenses (including, but not limited
to, reasonable expenses of due diligence, consultant's fees and expenses, travel
expenses, and reasonable fees, charges and disbursements of counsel) incurred in
connection with the Transactions and any related documentation or the amendment,
modification or waiver thereof. No indemnified person shall be
2
<PAGE>
liable for any indirect, consequential or punitive damages in connection with
this Commitment Letter, the definitive financing documentation or its activities
related to the Transactions.
You hereby represent and covenant that (a) to the best of your
knowledge, all information (excluding information of a general economic nature
and financial projections) concerning you, the Target, the Acquisition, and the
other Transactions (the "Information") that has been or will be prepared by or
on behalf of you or any of your authorized representatives and that has been
made or will be made available to us or any of our authorized representatives in
connection with the Transactions, when taken as a whole, will at the time made
available be correct in all material respects and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not materially misleading in light of
the circumstances under which such statements are made, (b) all financial
projections concerning you, the Acquisition, and the other Transactions or, to
the best of your knowledge, the Target (the "Projections") that have been
prepared by or on behalf of you or the Target or any of your or its authorized
representatives and that have been or will be made available to us or any of our
authorized representatives in connection with the Transactions have been and at
the time made available will be prepared in good faith based upon assumptions
believed by you to be reasonable and (c) the transactions contemplated by the
Commitment Letter have been approved by a majority of the members of the
Company's board of directors who are not affiliated with the purchasers of the
Shares and the directors have received an opinion of Chase Securities Inc. to
the effect that the transactions contemplated by this Commitment Letter are fair
to the Company from a financial point of view. You agree to supplement the
Information and the Projections from time to time until the effective time of
the Merger so that the representations and covenants in the preceding sentence
remain correct.
This Commitment Letter and our commitment hereunder shall not be
assignable by you (and any purported assignment shall be null and void), are
solely for the benefit of the parties hereto and do not confer any benefits
upon, or create any rights in favor of, any person other than the parties hereto
and the indemnified persons referred to above. This Commitment Letter may not
be amended or waived except by an instrument in writing signed by each party
hereto. This Commitment Letter may be executed in any number of counterparts,
each of which shall be an original, and all of which, when taken together, shall
constitute one agreement. Delivery of an executed signature page of this
Commitment Letter by facsimile transmission shall be as effective as delivery of
a manually executed counterpart hereof. This Commitment Letter is the
3
<PAGE>
only agreement that has been entered into between us relating to our commitment
with respect to any Shares and sets forth the entire understanding of the
parties with respect thereto (other than a separate agreement regarding certain
modifications to the existing shareholders' and registration rights agreements
among you and certain of our affiliates).
This Commitment Letter shall be governed by and construed in
accordance with the laws of the State of New York. EACH OF THE PARTIES HERETO
IRREVOCABLY AGREES TO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF
THIS COMMIT MENT LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER. You
irrevocably and unconditionally submit to the exclusive jurisdiction of any
state or federal court sitting in the Borough of Manhattan, The City of New
York, over any suit, action or proceeding arising out of or relating to this
Commitment Letter. Service of any process, summons, notice or document by
registered mail addressed to you at your address set forth above shall be
effective service of process against you for any such suit, action or proceeding
brought in any such court. You irrevocably and uncondition ally waive any
objection to the laying of venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding has
been brought in an inconvenient forum. A final judgment in any such suit,
action or proceeding brought in any such court may be enforced in any other
courts to whose jurisdiction you are or may be subject, by suit upon judgment.
This Commitment Letter is delivered to you on the understanding that
you shall not, and shall cause your directors, officers, employees, agents and
advisors (collectively, "Representatives") not to, directly or indirectly,
disclose this Commitment Letter or any of its terms or substance to any other
person except (i) on a confidential basis to your Representatives who are
directly involved in the consideration of this matter and agree to keep this
Commitment Letter and its terms and substance confidential, (ii) as may be
compelled in a judicial or administrative proceeding (in which case you agree to
inform us promptly thereof), (iii) on a confidential basis, to Target and its
Representatives who are directly involved in the consideration of the
Acquisition so long as Target has agreed to keep, and to cause its
Representatives to keep, this Commitment Letter and its terms and substance
confidential (except as contemplated by clause (iv) of this sentence), (iv) the
reference to this Commitment Letter in the Agreement and (v) to the extent
required under applicable securities laws. Notwithstanding the foregoing, any
press release or filing with the Securities and Exchange Commission disclosing
this Commitment Letter or the terms or substance
4
<PAGE>
hereof shall be subject to our prior review and consent, which shall not be
unreasonably withheld or delayed.
Our commitment in this Commitment Letter will terminate at 5:00 p.m.,
New York City time, on March 8, 1999, unless on or prior to such time you sign
and return an enclosed counterpart of this Commitment Letter and, if so accepted
on or prior to such time, the commitment contained herein will terminate at 5:00
p.m., New York City time, on the earliest of (i) the termination of the
Agreement, (ii) the material amendment of the Agreement or the waiver by the
Company of any of the conditions or covenants contained therein, in each case
without the approval of Apollo and Blackstone, which may be given or withheld in
their sole discretion, (iii) the date you notify us that you have elected not to
consummate the Merger, (iv) the date of execution and delivery of a definitive
agreement among us with respect to the purchase and sale of the Shares and (v)
December 31, 1999 (or such later date as may be agreed to by you and us). The
reimbursement, fee, indemnification, choice of law, submission to jurisdiction
and confidentiality provisions contained herein shall remain in full force and
effect regardless of whether definitive financing documentation shall be
executed and delivered and notwithstanding the termination of this Commitment
Letter or our commitment contained herein.
5
<PAGE>
If the foregoing correctly sets forth our agreement, please indicate
your acceptance of the terms hereof by returning to us executed counterparts
hereof.
Very truly yours,
APOLLO MANAGEMENT IV, L.P.
By: /s/ David B. Kaplan
----------------------------------
Name: David B. Kaplan
Title: Vice President
Number of shares: 440,000
Aggregate purchase price: $440,000,000
BLACKSTONE CAPITAL PARTNERS III
MERCHANT BANKING FUND L.P.
By: Blackstone Management
Associates III L.L.C.,
its General Partner
By: /s/ Howard A. Lipson
---------------------------
Name: Howard A. Lipson
Title: Senior Managing Director
Number of shares: 350,000
Aggregate purchase price: $350,000,000
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
GREENWICH STREET EMPLOYEES FUND, L.P.
TRV EXECUTIVE FUND, L.P.
By: GREENWICH STREET
INVESTMENTS II, L.L.C.,
their General Partner
By: /s/ Sanjay Patel
------------------------------
Name: Sanjay Patel
Title: Senior Managing Director
Number of shares 100,000
Aggregate purchase price $100,000,000
DLJMB FUNDING II, INC.
By: DLJMB Funding, Inc.
By: /s/ Ivy Dodes
-------------------------------
Name: Ivy Dodes
Title: Vice President
Number of shares: 15,707.286
Aggregate purchase price: $15,707,286
DLJ MERCHANT BANKING PARTNERS II, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By: /s/ Ivy Dodes
--------------------------------
Name: Ivy Dodes
Title: Vice President
Number of shares: 68,155.846
Aggregate purchase price: $68,155,846
DLJ MERCHANT BANKING PARTNERS II-A, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By: /s/ Ivy Dodes
---------------------------------
Name: Ivy Dodes
Title: Vice President
Number of shares: 2,714.282
Aggregate purchase price: $2,714,282
DLJ DIVERSIFIED PARTNERS, L.P.
By: DLJ Diversified Partners, Inc.
Managing General Partner
By: /s/ Ivy Dodes
---------------------------------
Name: Ivy Dodes
Title: Vice President
Number of shares: 3,984.699
Aggregate purchase price: $3,984,699
DLJ DIVERSIFIED PARTNERS-A, L.P.
By: DLJ Diversified Partners, Inc.
Managing General Partner
By: /s/ Ivy Dodes
---------------------------------
Name: Ivy Dodes
Title: Vice President
Number of shares: 1,479.781
Aggregate purchase price: $1,479,781
DLJ MILLENNIUM PARTNERS, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By: /s/ Ivy Dodes
---------------------------------
Name: Ivy Dodes
Title: Vice President
Number of shares: 1,102.004
Aggregate purchase price: $1,102,004
DLJ MILLENNIUM PARTNERS-A, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By: /s/ Ivy Dodes
---------------------------------
Name: Ivy Dodes
Title: Vice President
Number of shares: 214.936
Aggregate purchase price: $214,936
DLJ FIRST ESC L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By: /s/ Ivy Dodes
---------------------------------
Name: Ivy Dodes
Title: Vice President
Number of shares: 131.148
Aggregate purchase price: $131,148
DLJ OFFSHORE PARTNERS II, C.V.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By: /s/ Ivy Dodes
---------------------------------
Name: Ivy Dodes
Title: Vice President
Number of shares: 3,351.548
Aggregate purchase price: $3,351,548
DLJ EAB PARTNERS, L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By: /s/ Ivy Dodes
---------------------------------
Name: Ivy Dodes
Title: Vice President
Number of shares: 306.011
Aggregate purchase price: $306,011
DLJ ESC II L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By: /s/ Ivy Dodes
---------------------------------
Name: Ivy Dodes
Title: Vice President
Number of shares: 12,852.459
Aggregate purchase price: $12,852,459
Accepted and agreed to as
of the date first written above by:
ALLIED WASTE INDUSTRIES, INC.
By: /s/ Steven Helm
-------------------------------
Name: Steven Helm
Title: Vice President
<PAGE>
Exhibit A
Sources and Uses of Funds on the Merger Date
(in million of dollars)
For Consolidated Entity
<TABLE>
<CAPTION>
Use of Funds Sources of Funds
------------ ----------------
<S> <C> <C> <C>
Consideration for Shares $7,065.0 Revolving Facility $ 0.0
Consideration for Options for BFI 291.7 Senior Unsecured Increasing 2,500.0
Rate Note Facility and/or Senior
Subordinated Notes
Severance and Termination 177.0 Asset Sale Term Loan Facility 1,500.0
Payments
Repayment of Commercial Paper 740.5 Tranche A Facility 2,250.0
of BFI
Repayment of existing Senior 319.8 Tranche B Facility 1,000.0
Secured Credit Facility of
Borrower
Excess Cash 47.3 Tranche C Facility 1,000.0
Transaction Costs 100.0 Equity Contribution 750.0
--------
Financing Fees 258.7 Total Sources $9,000.0
-------- ========
Total Uses $9,000.0
========
</TABLE>
<PAGE>
Exhibit B
$1,000,000,000 Convertible Preferred Stock
Summary of Proposed Terms
Investors......... Those parties signatory to the commitment letter to which
this term sheet is attached (the "Commitment Letter") and
their respective affiliated funds under management and/or
designees (the "Investors").
Issuer............ Allied Waste Industries, Inc., a Delaware corporation
(the "Company").
Issue............. 1,000,000 shares of Series _ Senior Convertible Preferred
Stock, par value $.10 per share (the "Preferred Stock").
Liquidation
Preference........ $1,000 per share of Preferred Stock, plus the value of
accrued and unpaid dividends through and including the
date of determination (the "Liquidation Preference").
Upon any liquidation, dissolution or other winding up of
the affairs of the Company, before any distribution or
payment is made to any equity security of the Company
ranking junior to the Preferred Stock, the holders of the
Preferred Stock shall be paid the greater of (a) the
Liquidation Preference or (b) the amount that would be
payable to the holders of shares of Preferred Stock if the
holders of the Preferred Stock had converted all outstand
ing shares of Preferred Stock into shares of common stock,
par value $.01 per share, of the Company (the "Common
Stock"), immediately prior to such liquidation,
dissolution or other winding up.
Initial Aggregate
Liquidation
Preference........ $1,000,000,000.
Purchase Price.... On the date of issuance of the Preferred Stock (the "Issue
Date"), the Investors shall purchase the Preferred Stock
for total cash consideration equal to $1,000,000,000 or
$1,000 per share.
Registration/
Transfer.......... The Preferred Stock will be sold in a private placement
directly by the Company to the Investors and initially
shall not be registered under the Securities Act of 1933,
as amended.
The Company shall enter into an amended and restated
registration rights agreement with the Investors providing
the rights contemplated by that certain letter agreement
dated the date of the Commitment Letter (the "Letter
Agreement").
Dividends......... Dividends shall accrue from the Issue Date at an annual
rate equal to the greater of:
(a) (i) with respect to dividends accruing prior to the
earlier of the date the Stockholder Approval (as defined
below) is obtained and the tenth anniversary of the Issue
Date, (A) 6.5% of the Liquidation Preference per annum
during the first six months following the Issue Date and
(B) thereafter, 6.5% of the Liquidation Preference per
annum plus an additional 1% of the Liquidation Prefer ence
per annum for each six month period after the Issue Date
until the Stockholder Approval is obtained, (ii) with
respect to dividends accruing on or after the date the
Stockholder Approval has been obtained and on or before
the tenth anniversary of the Issue Date, 6.5% of the
Liquidation Preference per annum, or (iii) with respect to
dividends accruing after the tenth anniversary of the
2
<PAGE>
Issue Date, 12% of the Liquidation Preference per annum;
and
(b) the quarterly dividend last declared, as of such
Dividend Payment Date, by the board of directors of the
Company with respect to the Common Stock.
Notwithstanding the foregoing, (i) dividends shall never
accrue at a rate in excess of 12% of the Liquidation
Preference per annum and (ii) any dividends accruing on or
after the fifth anniversary of the Issue Date that are not
paid in cash on the applicable Dividend Payment Date shall
accrue at 12% of the Liquidation Preference per annum.
Dividends shall be payable, in cash, when, as and if
declared by the board of directors of the Company, and if
not paid on the applicable Dividend Payment Date, shall be
added to the Liquidation Preference on such Dividend
Payment Date. Thereafter, such dividend will no longer be
payable in cash. "Dividend Payment Date" means March 31,
June 30, September 30 and December 31 of each year.
Conversion
Rights.......... From and after receipt of the Stockholder Approval, each
share of Preferred Stock shall be convertible at the
option of the holder initially into the number of fully
paid and nonassessable shares of Common Stock equal to the
Liquidation Preference at the time of conversion divided
by $18.00.
For so long as the Stockholder Approval is not obtained,
the Preferred Stock shall be convertible at the option of
the holder into the number of shares of Series _ Junior
Preferred Stock, par value $.10 per share, of the Com pany
(the "Junior Preferred Stock"), determined pursuant to the
preceding paragraph. Depositary share arrange ments will
be put in place to the extent necessary due to
3
<PAGE>
authorized share limitations. The Junior Preferred Stock
shall be non-redeemable and shall at least have all rights
of a share of Common Stock (including, but not limited to,
ranking no less than pari passu with the Common Stock as
to dividends and any other distributions de clared on the
Common Stock and payment upon liquida tion). The Junior
Preferred Stock will be entitled to vote with the Common
Stock on a share for share basis and shall, to the extent
permitted by the rules of any applica ble stock exchange
or other trading market, be convert ible share for share
into Common Stock, subject to adjustments to voting and
conversion rights, if any, for depositary share
arrangements.
The conversion privileges set forth above shall include
customary anti-dilution protection.
Listing......... The Company shall use its reasonable best efforts to cause
the shares of Common Stock and, to the extent permitted,
the Junior Preferred Stock (if, as and when issued and
offered pursuant to an effective registration statement)
issuable upon conversion of the Preferred Stock to be
listed or otherwise eligible for trading on each principal
trading market for the Common Stock.
Optional
Redemption
Rights.......... The Company shall not have the right to redeem the
Preferred Stock prior to the later of (a) the third
anniver sary of the Issue Date and (b) receipt of the
Stockholder Approval. Thereafter, the Company shall have
the right to redeem the Preferred Stock, in whole but not
in part, at the Liquidation Preference; provided, if such
redemp tion is prior to the fifth anniversary of the Issue
Date, the Company shall have such right only if the
average closing price of the Common Stock (as reported
(absent manifest error) in The Wall Street Journal), for
the thirty consecutive trading days ending on the date of
notice of the Company's intent to redeem the Preferred
Stock exceeds 150% of the conversion price, as then in
effect.
4
<PAGE>
Any such redemption shall be effected no earlier
than thirty days after the Investors receive such notice
of redemption.
Ranking.......... The Preferred Stock shall rank senior to all existing and
future classes of common or preferred stock of the
Company.
Voting Rights.... The Preferred Stock and the Junior Preferred Stock shall
have the right to vote, together with the Common Stock, as
a single class, on all matters on which the Company's
common stockholders are entitled to vote. For purposes of
such voting, (a) each share of Preferred Stock shall have
the number of votes equal to the number of shares of
Common Stock then issuable upon conversion of such share
of Preferred Stock (without regard to whether the
Stockholder Approval has been obtained) and (b) each share
of Junior Preferred Stock will 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.
For so long as any shares of Preferred Stock or Junior
Preferred Stock are outstanding, the holders of Preferred
Stock and Junior Preferred Stock, voting separately as a
class, shall have the right to elect the number of
directors of the Company that Apollo and Blackstone or
their affiliates would be entitled to elect pursuant to
the Second Amended and Restated Share Agreement (the
"Stockholders' Agreement"), by and among the Company and
the Investors. Such directors will be deemed to be the
directors elected by Apollo and Blackstone under the
Stockholders' Agreement.
The Preferred Stock and the Junior Preferred Stock shall
each be entitled to vote as a separate class with respect
to amendments to the Company's certificate of incorpora
tion, by merger or otherwise, that adversely affect the
rights of each such class of stock.
5
<PAGE>
Stockholder
Approval......... To comply with the requirements of the New York Stock
Exchange, the Company shall use its reasonable best
efforts to obtain stockholder approval of the conversion
of the Preferred Stock into shares of Common Stock (the
"Stockholder Approval"). If feasible, the Company shall
present a proposal for the Stockholder Approval (to
gether, to the extent consistent with their fiduciary
duties, with the affirmative recommendation of a majority
of the members of the Company's board of directors not
affiliated with the Investors or their affiliates) at the
Company's 1999 annual meeting of its stockholders. Unless
previously adopted, the Company shall resubmit a proposal
for the Stockholder Approval at the next two annual
meetings of its stockholders, at two special meetings of
its stockholders convened at the Investors' request and at
any other meetings chosen by the Company.
Change of
Control.......... Upon the occurrence of a change of control, the Com pany
shall offer to purchase any and all of the shares of
Preferred Stock at 101% of the Liquidation Preference.
Preferred Stock
Purchase
Agreement........ The shares of Preferred Stock shall be issued pursuant to
a stock purchase agreement reasonably satisfactory to the
Investors (including the form of the certificate of desig
nation attached thereto). Such stock purchase agreement
shall contain (a) representations and warranties substan
tially similar to those in the definitive documentation
for the Debt Financing (which shall not serve as
conditions to closing but shall otherwise survive the
closing) and (b) other representations and warranties
relating to organization, capitalization, validity of the
shares and similar matters (which shall serve as
conditions to, and survive, the closing); indemnities;
covenants; and conditions precedent subject to the
foregoing, customary for agreements of such type and a
covenant on the part of (i) the Investors to vote any
shares of Common Stock,
6
<PAGE>
Preferred Stock and Junior Preferred Stock beneficially
owned by them, or their affiliates, entitled to vote with
respect to the Stockholder Approval for such proposal and
(ii) the Company to provide Rule 144A(d) informa tion.
Those matters that are not covered or made clear by the
Commitment Letter or this term sheet are subject to
approval by the Investors (it being understood that the
terms and conditions of the definitive documents shall not
be inconsistent with the provisions of this term sheet or
the Commitment Letter).
Other
Agreements........ The Investors and the Company will also enter into the
Stockholders Agreement contemplated by the Letter
Agreement. The Investors will enter into an amendment of
the existing Investment Agreement which will, among other
things, add the new Investors as parties, provide that
each party thereto will vote in accordance with the terms
thereof, and provide certain restrictions on the transfer
of shares of the Investors other than Apollo and
Blackstone to the effect that such Investors shall not
transfer any shares, beneficially owned by them, of the
Company in a manner not available to affiliates under the
Federal securities laws.
7
<PAGE>
Exhibit C
---------
CONDITIONS
----------
Each Investor's several commitment pursuant to the Commitment Letter,
dated March 7, 1999 (the "Commitment Letter"), is subject to the satisfaction of
the following conditions (capitalized terms used but not defined herein shall,
unless otherwise specified, have the meanings assigned to such terms in the
Commitment Letter):
(i) the preparation, execution and delivery of definitive documents
relating to the purchase and sale of the Shares reasonably satisfactory to
each of the Investors;
(ii) the Acquisition and each of the other Transactions (other than
the purchase by such Investor of the Shares to be purchased by it) shall
have been consummated or shall be consummated simultaneously with the other
Transac tions, without any waiver by the Company of the conditions thereto
without the prior written consent of the Investors affiliated with Apollo
and Blackstone, which may be given or withheld in their sole discretion;
and the Bank Financing shall be consummated on terms that in all material
respects are as favorable to the Company and the Investors as those set
forth in the Bank Commitment Letter;
(ii) the termination or expiration of all applicable waiting periods
under the Hart-Scott-Rodino Antitrust Improvements Act of 1975, as amended,
and the rules promulgated thereunder (the "HSR Act"), provided, that with
respect to the purchase of the Shares such Investor has used its reasonable
best efforts to obtain clearance under the HSR Act prior to satisfaction of
the conditions to the Agreement and the Bank Financing (other than the
purchase of the Shares).
<PAGE>
EXHIBIT 99.12
March 7, 1999
Allied Waste Industries, Inc.
15880 North Greenway-Hayden Loop
Scottsdale, Arizona 85260
Ladies and Gentlemen:
Reference is made to (a) the letter agreement dated the date hereof
(the "Commitment Letter") among you (the "Company"), Apollo Management IV LP
("Apollo"), Blackstone Capital Partners III Merchant Banking Fund L.P.
("Blackstone") and certain non-Apollo/Blackstone-affiliated investors, pursuant
to which Apollo and Blackstone and such other investors have severally agreed to
purchase shares (the "Additional Shares") of the Company's convertible preferred
stock (having the terms described therein) in connection with the Company's
acquisition (the "Acquisition") of the corporation referred to as Blue (the
"Target"), (b) the Amended and Restated Shareholders Agreement, dated as of
April 21, 1997 (the "Shareholders Agreement"), by and between the Company, on
the one hand, and certain affiliates of Apollo (collectively, the "Apollo
Funds") and certain affiliates of Blackstone (collectively, the "Blackstone
Funds"), on the other hand, and (c) the Registration Rights Agreement, dated as
of April 21, 1997 (the "Registration Rights Agreement"), by and between the
Company, on the one hand, and the Apollo Funds and the Blackstone Funds, on the
other hand. Capitalized terms used but not defined herein shall have the
meanings set forth in the Shareholders Agreement.
In consideration of the execution and delivery by Apollo, Blackstone
and the non-Apollo/Blackstone-affiliated investors of the Commitment Letter, the
Company hereby agrees with Apollo, the Apollo Funds, Blackstone, the Blackstone
Funds and such other investors as follows:
1. Waiver of Standstill Provisions. The Company waives any breach by
the Shareholders of Article 2 of the Shareholders Agreement to the extent such
breach relates to the Additional Shares to be acquired pursuant to the
Commitment Letter (including the shares into which the Additional Shares are
convertible) or the matters covered by this letter agreement.
2. Amendment of Shareholders Agreement. The Company, the
Shareholders, Apollo and Blackstone agree that, concurrent with the execution
and delivery of a definitive purchase agreement with respect to the Additional
Shares, they (together with any additional designees of Apollo or Blackstone who
purchase any Additional Shares) will enter into a Second Amended and Restated
Shareholders Agreement substantially identical to the Shareholders Agreement but
reflecting the modifications described below. The effectiveness of such
amendment will be conditioned on issuance of the Additional Shares to Apollo,
Blackstone and any of their designees as contemplated by the Commitment Letter.
All of the purchasers of the Additional Shares will be Shareholders for purposes
of such amended
2
<PAGE>
Shareholders Agreement, except as specified below. The Company represents that
this letter agreement and the amendments to the Shareholders Agreement
contemplated hereby have been approved by a majority of the directors of the
Company other than the Shareholder Designees.
(a) Definitions.
(i) For purposes of the definitions of "Actual Voting Power" and
"Voting Securities" and other defined terms in which such terms appear, the
Additional Shares and the shares of Junior Preferred Stock (as described in
Exhibit C to the Commitment Letter) into which Additional Shares are
converted shall be deemed from the date of issuance thereof to be shares
then entitled to vote for the general election of directors,
notwithstanding that such shares may not then possess such power due to the
absence of the Stockholders Approval (as defined in Exhibit C to the
Commitment Letter) or otherwise. Each Additional Share will be deemed at
each date of determination to have the number of votes that would be
represented by the number of shares of Common Stock into which such
Additional Share would otherwise then be convertible. Each share of Junior
Preferred Stock will be deemed at each 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.
(ii) For purposes of all calculations throughout the amended
Shareholders Agreement concerning Share ownership and percentage interests,
the Additional Shares acquired by investors other than Apollo and
Blackstone and their affiliates shall be disregarded, provided, that for
purposes of the proviso contained in subclause (D) of clause (ii) of
Section 3.1(b), Additional Shares (including the shares into which they are
converted) that are held by all the Shareholders will be included.
(b) Representations and Warranties. The representations and
warranties in Article 1 shall be restated, with appropriate modifications as
warranted by the circumstances. The accuracy of representations and warranties
in the Shareholders Agreement shall not serve as conditions to closing under the
purchase agreement.
(c) Standstill.
(i) Clause (A) of Section 2.1 will refer to the tenth anniversary of
the issuance of the Additional Shares. In subclause (ii) of clause (B) of
Section 2.1, the following language will be added: "; PROVIDED, that the
Shareholders at such time are entitled to designate not more than one
director pursuant to Article 3".
(ii) Subparagraph (iv) of Section 2.1 will be modified to make clear
that the Shareholders can participate in any election contest to the extent
it relates to the solicitation of proxies to elect Shareholder Designees
and Unaffiliated Directors nominated by the Nominating Committee (as such
terms are defined in the Shareholders Agreement) in the circumstance where
there is a competing slate of nominees in respect of which proxies are
being solicited.
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(iii) The Company will consider in good faith appropriate carve-outs
from the standstill provisions as they would otherwise apply to customary
investment banking and brokerage activities of Shareholders' affiliates.
(d) Board Representation and Voting.
(i) The director designation rights contained in Article 3 will be
vested exclusively in the Apollo/Blackstone-affiliated Shareholders and
their respective Related Transferees.
(ii) Section 3.1(a) will refer to the tenth anniversary of the
issuance of the Additional Shares. During the Shareholder Designee Period,
the Board of Directors will consist of no more than 13 directors. The
additional two directors will be designated exclusively by the Nominating
Committee in accordance with the procedures set forth in the Shareholders
Agreement.
(iii) Section 3.1(b) will refer to the Company's obligation to
support the nomination and election of the persons specified in clauses
(i), (ii) and (iii) of such Section.
(iv) Subclauses (A) through (D) of clause (ii) of Section 3.1(b) will
be modified to reflect the following matrix:
% of Shares Owned # of Shareholder Designees
----------------- --------------------------
80% - 100.0% 5
60% - 79.9% 4
40% - 59.9% 3
20% - 39.9% 2
10% - 19.9% 1
0% - 9.9% 0
For purposes of such matrix, "Shares" will be deemed to include the TPG
Group Block, the Laidlaw Block and the Additional Shares (calculated on an
as converted basis).
(v) The proviso contained in subclause (D) of clause (ii) of Section
3.1(b) will be modified, such that the number of Shareholder Designees will
be reduced to three (even if the above matrix would otherwise call for a
greater number) if the Shareholders are diluted below the 9% threshold
referred to therein.
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<PAGE>
(vi) The Company will provide those Investors whose designees are
not on the board of directors such access to information and opportunity
for consultation with the Company as will enable such Investors to comply
with venture capital operating company requirements.
(vii) The Company's bylaws will be amended as appropriate to reflect
the changes described herein.
(e) Transfer Restrictions. The transfer restrictions of Article 4 of
the amended Shareholders Agreement will apply to the Additional Shares and the
shares into which they are converted, except that paragraphs (a), (b), (c) and
(d) will refer to the first anniversary of the date of issuance of the
Additional Shares.
3. Amendment of Registration Rights Agreement. The Company, the
Shareholders, Apollo and Blackstone agree that, concurrent with the execution
and delivery of a definitive purchase agreement with respect to the Additional
Shares, they (together with any additional designees of Apollo or Blackstone who
purchase any Additional Shares) will enter into an Amended and Restated
Registration Rights Agreement substantially identical to the Registration Rights
Agreement but reflecting the following modifications. The effectiveness of such
amendment will be conditioned on issuance of the Additional Shares to Apollo,
Blackstone and any of their designees as contemplated by the Commitment Letter.
The Company represents that the amendments to the Registration Rights Agreement
contemplated hereby have been approved by a majority of the directors of the
Company other than the Shareholder Designees.
(a) Appropriate modifications will be made to reflect that the
Registrable Securities (as defined in the Registration Rights Agreement) also
include the Additional Shares and the securities into which they may be
converted.
(b) There will be a total of nine (as opposed to the current three)
demand registrations, which will be vested exclusively in the Apollo/Blackstone-
affiliated Shareholders and their Related Transferees.
(c) Clause (y) of Section 2.3(c) will refer to six months rather than
twelve months, i.e., the Shareholders will have the ability to demand up to two
registrations per year. For purposes of clause (x) of Section 2.3(c), an
incidental registration opportunity with respect to Common Stock will not serve
to prevent the exercise of a demand registration right with respect to
Additional Shares during the 90 day period referred to in such clause (x),
provided, that the securities to be marketed and sold are limited to shares of
preferred stock in the form of Additional Shares.
(d) Clause (z) of Section 2.3(c) will be clarified to provide that
the Company's ability to rely on such clause in order not to be required to
effect a registration or file a post-effective amendment (as contemplated by the
introduction to Section 2.3) will continue only so long as the Company continues
in good faith to pursue the proposed filing and offer.
5
<PAGE>
(e) The last sentence of the first paragraph of Section 2.2 will
provide that a demand registration may be invoked if it involves at least
2,500,000 shares or such lesser number of shares as would yield gross proceeds
of not less than $50 million based on the average closing price of the Common
Stock over the ten trading day period preceding the date of the demand.
Comparable levels will be established if the shares to be registered and sold
consist of Preferred Stock (with the gross proceeds based on liquidation
preference). An appropriate conforming modification will be made to Section 4.4
as it applies to transferees of demand registration rights.
(f) The second parenthetical in Section 2.4(j) will be modified to
state that appropriate members of senior management of the Company will provide
customary due diligence assistance and will participate in customary "road show"
presentations in substantially the same manner as they would in a primary
registered public offering by the Company of its Common Stock after taking into
account reasonable business requirements of the Company in determining the
scheduling and duration of the road show.
(g) The non-Apollo/Blackstone-affiliated Shareholders will not have
piggyback rights with respect to the first three demand registrations unless
such registrations involve Additional Shares (or shares into which they are
converted). If during such first three demand registrations, both TPG/Laidlaw
equity and Additional Shares are included, the TPG/Laidlaw equity shall have
priority in the case of underwriters cutbacks, with any Additional Shares being
entitled to participate (subject to cutbacks) pro rata based on the Investors'
relative holdings of Additional Shares (including for all purposes the shares
into which they are converted). Piggyback rights will be available on a full
pro rata basis with respect to the next six demand registrations.
4. Miscellaneous. This letter agreement will be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to conflict of laws principles thereof. This letter agreement
may not be amended except pursuant to an instrument in writing signed by each
party hereto. This letter agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which will
constitute one and the same instrument.
6
<PAGE>
If the foregoing corresponds with your understanding of our agreement,
kindly sign this letter agreement in the appropriate space below, and this
letter agreement will become a binding agreement among the undersigned.
APOLLO INVESTMENT FUND III, L.P.
APOLLO OVERSEAS PARTNERS III, L.P.
APOLLO (U.K.) PARTNERS III, L.P.
By: Apollo Advisors II, L.P.
By: Apollo Capital Management II, Inc.
By:/s/ David B. Kaplan
--------------------------------------
Title: Vice President
------------------------------------
BLACKSTONE CAPITAL PARTNERS II
MERCHANT BANKING FUND L.P.
BLACKSTONE OFFSHORE CAPITAL
PARTNERS II L.P.
BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP II L.P.
By: Blackstone Management Associates II L.L.C.
By:/s/ Howard A. Lipson
--------------------------------------
Title: Senior Managing Director
APOLLO MANAGEMENT IV LP
By:/s/ David B. Kaplan
---------------------------------------
Title: Vice President
------------------------------------
BLACKSTONE CAPITAL PARTNERS III
MERCHANT BANKING FUND L.P.
By: Blackstone Management Associates III L.L.C.,
its general partner
By:/s/ Howard A. Lipson
--------------------------------------
Title: Member
7
<PAGE>
Accepted and agreed to:
ALLIED WASTE INDUSTRIES, INC.
By:/s/ Steven Helm
----------------------------
Name: Steven Helm
Title: Vice President
<PAGE>
EXHIBIT 99.13
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) of the Securities Exchange
Act of 1934, as amended, the undersigned hereby agree to the joint filing on
behalf of each of us of an amendment to Schedule 13D relating to the Common
Stock, par value $.01 per share, of Allied Waste Industries, a Delaware
corporation, and that any subsequent amendments thereto filed by any of us will
be filed on behalf of each of us. This Agreement may be included as an exhibit
to such joint filing.
BLACKSTONE CAPITAL PARTNERS II
MERCHANT BANKING FUND L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES II L.L.C., its general partner
By: /s/ Howard Lipson
----------------------------------------
Member
BLACKSTONE OFFSHORE CAPITAL PARTNERS II L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES II L.L.C., its general partner
By: /s/ Howard Lipson
----------------------------------------
Member
BLACKSTONE FAMILY INVESTMENT PARTNERSHIP
II L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES II L.L.C., its general partner
By: /s/ Howard Lipson
----------------------------------------
Member
BLACKSTONE MANAGEMENT ASSOCIATES II L.L.C.
By: /s/ Howard Lipson
----------------------------------------
Member
<PAGE>
BLACKSTONE CAPITAL PARTNERS III
MERCHANT BANKING FUND L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES III L.L.C., its general partner
By: /s/ Howard Lipson
-----------------------------------------
Member
BLACKSTONE MANAGEMENT ASSOCIATES III L.L.C.
By: /s/ Howard Lipson
-----------------------------------------
Member
/s/ Howard Lipson
---------------------------------------------
Peter G. Peterson
By: Howard A. Lipson Attorney-in-fact
/s/ Howard Lipson
---------------------------------------------
Stephen A. Schwarzman
By: Howard A. Lipson Attorney-in-fact
Dated: March 10, 1999
<PAGE>
EXHIBIT 99.14
POWER OF ATTORNEY
Know all men by these presents that Peter G. Peterson does
hereby make, constitute and appoint Michael Puglisi and Howard A. Lipson as true
and lawful attorneys-in-fact of the undersigned with full powers of substitution
and revocation, for and in the name, place and stead of the undersigned (both in
the undersigned's individual capacity and as a member of any limited liability
company or limited partnership for which the undersigned is otherwise authorized
to sign), to execute and deliver such forms as may be required to be filed from
time to time with the Securities and Exchange Commission with respect to any
investments of Blackstone Capital Partners II Merchant Banking Fund L.P.,
Blackstone Offshore Capital Partners II L.P., Blackstone Family Investment
Partnership II L.P., Blackstone Capital Partners III Merchant Banking Fund L.P.,
Blackstone Offshore Capital Partners III L.P. or Blackstone Family Investment
Partnership III L.P. and/or affiliates thereof in the common or preferred stock
of Allied Waste Industries, Inc. (including any amendments or supplements to any
reports from schedules previously filed by such persons or entities) pursuant to
Sections 13(d) and 16(a) of the Securities Exchange Act of 1934, as amended,
including without limitation, Schedules 13D, and statements on Form 3, Form 4
and Form 5.
/s/ Peter G. Peterson
--------------------------------
Name: Peter G. Peterson
[Notary signature and seal]
March 10, 1999
<PAGE>
EXHIBIT 99.15
POWER OF ATTORNEY
Know all men by these presents that Stephen A. Schwarzman does
hereby make, constitute and appoint Michael Puglisi and Howard A. Lipson as true
and lawful attorneys-in-fact of the undersigned with full powers of substitution
and revocation, for and in the name, place and stead of the undersigned (both in
the undersigned's individual capacity and as a member of any limited liability
company or limited partnership for which the undersigned is otherwise authorized
to sign), to execute and deliver such forms as may be required to be filed from
time to time with the Securities and Exchange Commission with respect to any
investments of Blackstone Capital Partners II Merchant Banking Fund L.P.,
Blackstone Offshore Capital Partners II L.P., Blackstone Family Investment
Partnership II L.P., Blackstone Capital Partners III Merchant Banking Fund L.P.,
Blackstone Offshore Capital Partners III L.P. or Blackstone Family Investment
Partnership III L.P. and/or affiliates thereof in the common or preferred stock
of Allied Waste Industries, Inc. (including any amendments or supplements to any
reports from schedules previously filed by such persons or entities) pursuant to
Sections 13(d) and 16(a) of the Securities Exchange Act of 1934, as amended,
including without limitation, Schedules 13D, and statements on Form 3, Form 4
and Form 5.
/s/ Stephen A. Schwarzman
-------------------------------
Name: Stephen A. Schwarzman
[Notary signature and seal]
March 10, 1999
