-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D1L4r304iPWt5HuJTTh1LOaiekI5mFFpInvif97s/U8Fa1QpkBbxde2M8PvRa62c vWfujtdspW6iwgs6dU13pg== 0000889812-99-000810.txt : 19990312 0000889812-99-000810.hdr.sgml : 19990312 ACCESSION NUMBER: 0000889812-99-000810 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19990311 GROUP MEMBERS: BLACKSTONE CAPITAL PARTNERS II MERCHANT BANKING FUND LP GROUP MEMBERS: BLACKSTONE CAPITAL PARTNERS III MERCHANT BANKING FUND L.P. GROUP MEMBERS: BLACKSTONE FAMILY INVESTMENT PARTNERSHIP II L.P. GROUP MEMBERS: BLACKSTONE MANAGEMENT ASSOCIATES II L.L.C. GROUP MEMBERS: BLACKSTONE MANAGEMENT ASSOCIATES III L.L.C. GROUP MEMBERS: BLACKSTONE OFFSHORE CAPITAL PARTNERS II L.P. GROUP MEMBERS: PETER G. PETERSON GROUP MEMBERS: STEPHEN A. SCHWARZMAN SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ALLIED WASTE INDUSTRIES INC CENTRAL INDEX KEY: 0000848865 STANDARD INDUSTRIAL CLASSIFICATION: REFUSE SYSTEMS [4953] IRS NUMBER: 880228636 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-43433 FILM NUMBER: 99563571 BUSINESS ADDRESS: STREET 1: 15880 NORTH GREENWAY-HADEN LOOP STREET 2: SUITE 100 CITY: SCOTTSDALE STATE: AZ ZIP: 85260 BUSINESS PHONE: 6024232946 MAIL ADDRESS: STREET 1: 7201 E CAMELBACK RD STREET 2: STE 375 CITY: SCOTTSDALE STATE: AZ ZIP: 85251 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BLACKSTONE CAPITAL PARTNERS II MERCHANT BANKING FUND LP CENTRAL INDEX KEY: 0001070839 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O THE BLACKSTONE GROUP STREET 2: 345 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10154 BUSINESS PHONE: 2129352626 MAIL ADDRESS: STREET 1: C/O THE BLACKSTONE GROUP STREET 2: 345 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10154 SC 13D/A 1 AMENDMENT NO. 1 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 EX-99.11 2 EQUITY COMMITTMENT LETTER AGREEMENT 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 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 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 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 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 Exhibit A Sources and Uses of Funds on the Merger Date (in million of dollars) For Consolidated Entity
Use of Funds Sources of Funds ------------ ---------------- 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 ========
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 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 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 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 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 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 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). EX-99.12 3 AMENDMENTS LETTER AGREEMENT 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 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. 3 (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. 4 (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 (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 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 Accepted and agreed to: ALLIED WASTE INDUSTRIES, INC. By:/s/ Steven Helm ---------------------------- Name: Steven Helm Title: Vice President EX-99.13 4 JOINT FILING AGREEMENT 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 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 EX-99.14 5 POWER OF ATTORNEY OF PETER G. PETERSON 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 EX-99.15 6 POWER OF ATTORNEY OF STEPHEN A. SCHWARZMAN 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 -----END PRIVACY-ENHANCED MESSAGE-----