SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Rutland, Vermont, on this 7th day of
August, 1997.
CASELLA WASTE SYSTEMS, INC.
By: /s/ John W. Casella
----------------------------------
John W. Casella
President and Chief Executive
Officer
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers, directors and authorized representatives of
Casella Waste Systems, Inc. hereby severally constitute and appoint John W.
Casella, James W. Bohlig and Jeffrey A. Stein, and each of them singly, our
true and lawful attorneys with full power to them, and each of them singly, to
sign for us and in our names in the capacities indicated below, the
Registration Statement on Form S-1 filed herewith and any and all pre-effective
and post-effective amendments to said Registration Statement, and any
subsequent Registration Statement for the same offering which may be filed
under Rule 462(b), and generally to do all such things in our names and on our
behalf in our capacities as officers and directors to enable Casella Waste
Systems, Inc. to comply with the provisions of the Securities Act of 1933, as
amended, and all requirements of the Securities and Exchange Commission, hereby
ratifying and confirming our signatures as they may be signed by our said
attorneys, or any of them, to said Registration Statement and any and all
amendments thereto or to any subsequent Registration Statement for the same
offering which may be filed under Rule 462(b).
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- ---------------------------- ----------------------------------- ---------------
/s/ John W. Casella President, Chief Executive Officer
- ------------------------- and Chairman
John W. Casella August 7, 1997
/s/ James W. Bohlig Senior Vice President and Chief
- ------------------------- Operating Officer, Director
James W. Bohlig August 7, 1997
/s/ Jerry S. Cifor Vice President and Chief Financial
- ------------------------- Officer (Principal Accounting and
Jerry S. Cifor Financial Officer) August 7, 1997
/s/ Douglas R. Casella Director August 7, 1997
- -------------------------
Douglas R. Casella
/s/ John F. Chapple III Director August 7, 1997
- -------------------------
John F. Chapple III
/s/ Kenneth H. Mead Director August 7, 1997
- -------------------------
Kenneth H. Mead
/s/ Michael F. Cronin Director August 7, 1997
- -------------------------
Michael F. Cronin
/s/ Gregory B. Peters Director August 7, 1997
- -------------------------
Gregory B. Peters
/s/ C. Andrew Russell Director August 7, 1997
- -------------------------
C. Andrew Russell
II-6
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CASELLA WASTE SYSTEMS, INC.,
a Delaware Corporation
Incorporated March 1, 1993
Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware
The undersigned, John W. Casella, is President and Secretary, of
Casella Waste Systems, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"). The
Corporation's Certificate of Incorporation was initially filed in the Office of
the Secretary of State of the State of Delaware on March 1, 1993. The
undersigned, as President and Secretary of the Corporation, do hereby certify
that (a) the Board of Directors duly adopted a resolution pursuant to Sections
242 and 245 of the General Corporation Law of the State of Delaware proposing
that this Amended and Restated Certificate of Incorporation (the "Restated
Certificate" or "Certificate of Incorporation") be approved and declaring the
adoption of such Restated Certificate to be advisable; and (b) the stockholders
of the Corporation duly approved this Restated Certificate by written consent in
accordance
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with Sections 228, 242 and 245 of the General Corporation Law of the State of
Delaware, and written notice of such consent has been given to all stockholders
who have not consented in writing to this Restated Certificate.
FIRST. The name of the Corporation is:
Casella Waste Systems, Inc.
SECOND. The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD. The nature of the business or purposes to be conducted or
promoted by the Corporation is as follows:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is (i) 10,000,000 shares of Class A
Common Stock, $.01 par value per share ("Class A Common Stock"), (ii) 1,000,000
shares of Class B Common Stock, $.01 par value per share ("Class B Common
Stock", and collectively with the Class A Common Stock, the "Common Stock") and
(iii) 4,941,250 shares of Preferred Stock, $.01 par value per share ("Preferred
Stock").
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
thereof in respect of each class of capital stock of the Corporation.
A. COMMON STOCK.
1. General. The voting, dividend and liquidation rights of the holders
of the Common Stock are subject to and qualified by the rights of the holders of
the Preferred Stock of any series as may be designated in this Restated
Certificate or by the Board of Directors upon any issuance of the Preferred
Stock of any series.
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2. Voting. The holders of the Class A Common Stock are entitled to one
vote for each share of Class A Common Stock held at all meetings of stockholders
(and written actions in lieu of meetings). The holders of the Class B Common
Stock are entitled to ten (10) votes for each share of Class B Common Stock held
at all meetings of stockholders (and written actions in lieu of meetings). The
holders of the Class A Common Stock and the Class B Common Stock shall vote
together as a single class. There shall be no cumulative voting.
The number of authorized shares of Class A Common Stock may be
increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the stock
of the Corporation entitled to vote, irrespective of the provisions of Section
242(b)(2) of the General Corporation Law of Delaware.
3. Dividends. Dividends may be declared and paid on the Common Stock
from funds lawfully available therefor as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock. The Corporation shall not declare or pay any
dividends or other distributions (as defined below) on shares of Class A Common
Stock until the holders of the Class B Common Stock then outstanding shall have
first received, or simultaneously receive, a cash dividend on each outstanding
share of Class B Common Stock in an amount at least equal to the product of (i)
the per share amount, if any, of the dividends or other distributions to be
declared, paid or set aside for the Class A Common Stock, multiplied by (ii) the
number of whole shares of Class A Common Stock into which such share of Class B
Common Stock is then convertible.
4. Liquidation. Upon the dissolution or liquidation of the Corporation,
whether voluntary or involuntary, holders of Common Stock will be entitled to
receive all assets of the Corporation available for distribution to its
stockholders (treating Class A Common Stock and Class B Common Stock equally for
this purpose), subject to any preferential rights of any then outstanding
Preferred Stock.
5. Optional Conversion of Class B Common Stock. The holders of the
Class B Common Stock shall have conversion rights as follows (the "Class B
Conversion Rights"):
(a) Right to Convert. Each holder of Class B Common
Stock shall have
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the right, at any time, to convert any or all shares of Class B Common Stock
held by such holder, without the payment of additional consideration by the
holder thereof, into fully paid and nonassessable shares of Class A Common Stock
at a rate of one share of Class A Common Stock for each share of Class B Common
Stock so converted (subject to adjustment as provided below) (the "Conversion
Rate").
(b) Fractional Shares. No fractional shares of Class A Common
Stock shall be issued upon conversion of the Class B Common Stock. In lieu of
any fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the fair market
value per share of Class A Common Stock, as determined by the Board of Directors
in their reasonable judgment.
(c) Mechanics of Conversion.
(i) In order for a holder of Class B Common Stock to
convert shares of Class B Common Stock into shares of Class A Common Stock, such
holder shall surrender the certificate or certificates for such shares of Class
B Common Stock, at the office of the transfer agent for the Class B Common Stock
(or at the principal office of the Corporation if the Corporation serves as its
own transfer agent), together with written notice as to the number of shares of
Class B Common Stock that such holder elects to convert. Such notice shall state
such holder's name or the names of the nominees in which such holder wishes the
certificate or certificates for shares of Class A Common Stock to be issued. If
required by the Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by a written instrument or instruments of transfer, in
form satisfactory to the Corporation, duly executed by the registered holder or
his or its attorney duly authorized in writing. The date of receipt of such
certificates and notice by the transfer agent (or by the Corporation if the
Corporation serves as its own transfer agent) shall be the conversion date
("Conversion Date"). The Corporation shall, as soon as practicable after the
Conversion Date, issue and deliver at such office to such holder of Class B
Common Stock, or to his or its nominees, (x) a certificate or certificates for
the number of shares of Class A Common Stock to which such holder shall be
entitled, together with cash in lieu of any fraction of a share, and (y) a
certificate for the balance of the shares of Class B Common Stock represented by
the certificate or certificates surrendered to the Corporation, if any, not so
converted.
(ii) The Corporation shall at all times when the
Class B Common Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the Class B Stock, such number of its duly authorized shares of Class A Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding Class B Common Stock.
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(iii) Upon any such conversion, no adjustment to the
conversion rate shall be made for any declared but unpaid dividends on the Class
B Common Stock surrendered for conversion or on the Class A Common Stock
delivered upon conversion.
(iv) All shares of Class B Common Stock which shall
have been surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares, including
the rights, if any, to receive notices and to vote, shall immediately cease and
terminate on the Conversion Date, except only the right of the holders thereof
to receive shares of Class A Common Stock in exchange therefor and payment of
any dividends declared but unpaid thereon. Any shares of Class B Common Stock so
converted shall be retired and cancelled and shall not be reissued, and the
Corporation (without the need for stockholder action) may from time to time take
such appropriate action as may be necessary to reduce the authorized Class B
Common Stock accordingly.
(v) The Corporation shall pay any and all issue and
other taxes that may be payable in respect of any issuance or delivery of shares
of Class A Common Stock upon conversion of shares of Class B Common Stock
pursuant to this Section 5. The Corporation shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of shares of Class A Common Stock in a name other than
that in which the shares of Class B Common Stock so converted were registered,
and no such issuance or delivery shall be made unless and until the person or
entity requesting such issuance has paid to the Corporation the amount of any
such tax or has established, to the satisfaction of the Corporation, that such
tax has been paid.
(d) Stock Splits and Combinations. The Corporation shall not
effect a subdivision or combination of the outstanding Class A Common Stock
unless an equal subdivision or combination shall have been effected on the Class
B Common Stock, and vice versa.
(e) Adjustment for Reclassification, Exchange, or
Substitution. If the Class A Common Stock issuable upon the conversion of the
Class B Common Stock shall be changed into the same or a different number of
shares of any class or classes of stock, whether by capital reorganization,
reclassification, or otherwise (other than a subdivision or combination of
shares or stock dividend provided for above, or a
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reorganization, merger, consolidation, or sale of assets provided for below),
then and in each such event the holder of each such share of Class B Common
Stock shall have the right thereafter to convert such share into the kind and
amount of shares of stock and other securities and property receivable upon such
reorganization, reclassification, or other change, by holders of the number of
shares of Class A Common Stock into which such shares of Class B Common Stock
might have been converted immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as provided
herein.
B. PREFERRED STOCK.
Preferred Stock may be issued from time to time in one or more series,
each of such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors of the Corporation as hereinafter provided. Any shares of
Preferred Stock which may be redeemed, purchased or acquired by the Corporation
may be reissued except as otherwise provided by law. Different series of
Preferred Stock shall not be construed to constitute different classes of shares
for the purposes of voting by classes unless expressly provided.
Authority is hereby expressly granted to the Board of Directors from
time to time to issue the Preferred Stock in one or more series, and in
connection with the creation of any such series, by resolution or resolutions
providing for the issue of the shares thereof, to determine and fix such voting
powers, full or limited, or no voting powers, and such designations, preferences
and relative participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including without
limitation thereof, dividend rights, special voting rights, conversion rights,
redemption privileges and liquidation preferences, as shall be stated and
expressed in such resolutions, all to the full extent now or hereafter permitted
by the General Corporation Law of Delaware. Without limiting the generality of
the foregoing, the resolutions providing for issuance of any series of Preferred
Stock may provide that such series shall be superior or rank equally or be
junior to the Preferred Stock of any other series to the extent permitted by
law. Except as otherwise specifically provided in this Certificate of
Incorporation or otherwise by agreement, no vote of the holders of the Preferred
Stock or Common Stock shall be a prerequisite to the issuance of any shares of
any series of the Preferred Stock authorized by and complying with the
conditions of this Certificate of Incorporation, the right to have such vote
being expressly waived by all present and future holders of the capital stock of
the Corporation.
C. SERIES PREFERRED STOCK.
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Six hundred sixteen thousand six hundred twenty (616,620) shares of the
authorized and unissued shares of Preferred Stock of the Corporation are hereby
designated "Series A Redeemable Preferred Stock" (the "Series A Preferred
Stock"), One million four hundred two thousand four hundred sixty-one
(1,402,461) shares of the authorized and unissued shares of Preferred Stock of
the Corporation are hereby designated "Series B Redeemable Preferred Stock" (the
"Series B Preferred Stock"), One million (1,000,000) shares of the authorized
and unissued shares of Preferred Stock of the Corporation are hereby designated
as "Series C Redeemable Preferred Stock" (the "Series C Preferred Stock"), and
One million nine hundred twenty-two thousand one hundred sixty-nine (1,922,169)
shares of the authorized and unissued shares of Preferred Stock of the
Corporation are hereby designated as "Series D Convertible Preferred Stock" (the
"Series D Preferred Stock"), with the following rights, preferences, powers,
privileges and restrictions, qualifications and limitations. Collectively, the
Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred
Stock and the Series D Preferred Stock are sometimes referred to as the "Series
Preferred Stock", and the Series D Preferred Stock is sometimes referred to as
the "Convertible Preferred Stock".
1. Dividends.
(a) The Corporation shall not declare or pay any dividends or
other distributions (as defined below) on shares of Common Stock until the
holders of the Convertible Preferred Stock then outstanding shall have first
received, or simultaneously receive, a cash dividend on each outstanding share
of Convertible Preferred Stock in an amount at least equal to the product of (i)
the per share amount, if any, of the dividends or other distributions to be
declared, paid or set aside for the Common Stock, multiplied by (ii) the number
of whole shares of Common Stock into which such share of Convertible Preferred
Stock is then convertible.
(b) For purposes of this Section 1, unless the context
requires otherwise, "distribution" shall mean the transfer of cash or property
without consideration, whether by way of dividend or otherwise, payable other
than in Common Stock or other securities of the Corporation, or the purchase or
redemption of shares of the Corporation (other than repurchases of Common Stock
held by employees or directors of, or consultants to, the Corporation upon
termination of their employment or services pursuant to agreements providing for
such repurchase at a price equal to the original issue price of such shares and
other than redemptions in
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liquidation or dissolution of the Corporation) for cash or property, including
any such transfer, purchase or redemption by a subsidiary of this Corporation.
2. Liquidation, Dissolution or Winding Up; Certain Mergers,
Consolidations and Asset Sales.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Corporation available for distribution to its stockholders, after and
subject to the payment in full of all amounts required to be distributed to the
holders of any other class or series of stock of the Corporation ranking on
liquidation prior and in preference to the Series Preferred Stock (collectively
referred to as "Senior Preferred Stock"), but before any payment shall be made
to the holders of Common Stock or any other class or series of stock ranking on
liquidation junior to the Series Preferred Stock (such Common Stock and other
stock being collectively referred to as "Junior Stock") by reason of their
ownership thereof, an amount equal (i)(A) $1.50 per share of Series A Preferred
Stock; (B) $2.00 per share of Series B Preferred Stock; (C) $7.00 per share of
Series C Preferred Stock; and (D) $7.00 per share of Series D Preferred Stock
(subject, in each case, to appropriate adjustment in the event of any stock
dividend, stock split, combination or other similar recapitalization affecting
such shares), plus any cash dividends declared but unpaid thereon, or (ii) in
the case of Series D Preferred Stock, if greater than the amount described in
clause (i) above, such amount per share as would have been payable had such
share been converted into Common Stock pursuant to Section 4 immediately prior
to such liquidation, dissolution or winding up. If upon any such liquidation,
dissolution or winding up of the Corporation the remaining assets of the
Corporation available for distribution to its stockholders shall be insufficient
to pay the holders of shares of Series Preferred Stock the full amount to which
they shall be entitled, the holders of shares of Series Preferred Stock and any
class or series of stock ranking on liquidation on a parity with the Series
Preferred Stock shall share ratably in any distribution of the remaining assets
and funds of the Corporation in proportion to the respective amounts which would
otherwise be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to such shares were paid
in full.
(b) After the payment of all preferential amounts required to
be paid to the holders of Senior Preferred Stock, Series Preferred Stock and any
other class or series of stock of the Corporation ranking on liquidation on a
parity with the Series Preferred Stock, upon the dissolution, liquidation or
winding up of the Corporation, the holders of shares of Junior Stock then
outstanding shall be entitled to receive the remaining assets and funds of the
Corporation available for distribution to
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its stockholders.
(c) Any merger or consolidation of the Corporation into or
with another corporation (except one in which the holders of capital stock of
the Corporation immediately prior to such merger or consolidation continue to
hold, directly or indirectly, more than 50% by voting power of the capital stock
of the surviving corporation), or the sale of all or substantially all the
assets of the Corporation, shall be deemed to be a liquidation of the
Corporation, in which case each holder of Series Preferred Stock shall be
entitled to receive the amount payable to such holder pursuant to Subsection
2(a) above. The amount deemed distributed to the holders of Series Preferred
Stock upon any such merger or consolidation shall be the cash or the value of
the property, rights or securities distributed to such holders by the acquiring
person, firm or other entity. The value of such property, rights or other
securities shall be determined in good faith by the Board of Directors of the
Corporation.
3. Voting.
(a) Each holder of outstanding shares of Convertible Preferred
Stock shall be entitled to one vote for each whole share of Class A Common Stock
into which the shares of Convertible Preferred Stock held by such holder are
then convertible (as adjusted from time to time pursuant to Section 4 hereof),
at each meeting of stockholders of the Corporation (and written actions of
stockholders in lieu of meetings) with respect to any and all matters presented
to the stockholders of the Corporation for their action or consideration. Except
as provided by law, by the provisions of Subsection 3(b) below or by the
provisions establishing any other series of Series Preferred Stock, holders of
Convertible Preferred Stock shall vote together with the holders of Common Stock
as a single class. The shares of Series A Preferred Stock, Series B Preferred
Stock and Series C Preferred Stock shall be non-voting.
(b) The Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Series Preferred Stock so as
to affect adversely the Series Preferred Stock, without the written consent or
affirmative vote of the holders of a majority of the then outstanding shares of
Series Preferred Stock, given in writing or by vote at a meeting, consenting or
voting (as the case may be) separately as a class. For this purpose, without
limiting the generality of the foregoing, the authorization of any shares of
capital stock with preference or priority over the Series Preferred Stock, or
any series thereof, as to the right to receive either dividends or amounts
distributable upon
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liquidation, dissolution or winding up of the Corporation shall be deemed to
affect adversely the Series Preferred Stock, or any series thereof, and the
authorization of any shares of capital stock on a parity with Series Preferred
Stock, or any series thereof, as to the right to receive either dividends or
amounts distributable upon liquidation, dissolution or winding up of the
Corporation shall not be deemed to affect adversely the Series Preferred Stock.
The number of authorized shares of Series Preferred Stock may be increased or
decreased (but not below the number of shares then outstanding) by the directors
of the Corporation pursuant to Section 151 of the General Corporation Law of
Delaware or by the affirmative vote of the holders of a majority of the then
outstanding shares of the Common Stock, Series Preferred Stock and all other
classes or series of stock of the Corporation entitled to vote thereon, voting
as a single class, irrespective of the provisions of Section 242(b)(2) of the
General Corporation Law of Delaware.
4. Optional Conversion. The holders of the Convertible Preferred Stock
(i.e., not including the Series A Preferred Stock, Series B Preferred Stock or
Series C Preferred Stock) shall have conversion rights as follows (the
"Conversion Rights"):
(a) Right to Convert. Each holder of Convertible Preferred
Stock shall have the right, at any time, to convert all (and not less than all)
of the shares of a series of Convertible Preferred Stock held by such holder,
without the payment of additional consideration by the holder thereof, into such
number of fully paid and nonassessable shares of Class A Common Stock as is
determined by multiplying the number of shares of such series of Convertible
Preferred Stock held by such holder, times a fraction the numerator of which is
$7.00 in the case of Series D Preferred Stock and the denominator of which is
the applicable Conversion Price (as defined below) in effect at the time of
conversion. The "Conversion Price" shall initially be $7.00 in the case of
Series D Preferred Stock. Such initial Conversion Price, and the rate at which
shares of Convertible Preferred Stock may be converted into shares of Class A
Common Stock, shall be subject to adjustment as provided below.
(b) Fractional Shares. No fractional shares of Class A Common
Stock shall be issued upon conversion of the Convertible Preferred Stock. In
lieu of any fractional shares to which the holder would otherwise be entitled,
the Corporation shall pay cash equal to such fraction multiplied by the then
effective Conversion Price.
(c) Mechanics of Conversion.
(i) In order for a holder of Convertible Preferred
Stock to convert shares of Convertible Preferred Stock into shares of Class A
Common Stock, such holder shall surrender the certificate or certificates for
such shares of Convertible
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Preferred Stock, at the office of the transfer agent for the Convertible
Preferred Stock (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with written notice that
such holder elects to convert all of the shares of the Convertible Preferred
Stock represented by such certificate or certificates. Such notice shall state
such holder's name or the names of the nominees in which such holder wishes the
certificate or certificates for shares of Class A Common Stock to be issued. If
required by the Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by a written instrument or instruments of transfer, in
form satisfactory to the Corporation, duly executed by the registered holder or
his or its attorney duly authorized in writing. The date of receipt of such
certificates and notice by the transfer agent (or by the Corporation if the
Corporation serves as its own transfer agent) shall be the conversion date
("Conversion Date"). The Corporation shall, as soon as practicable after the
Conversion Date, issue and deliver at such office to such holder of Convertible
Preferred Stock, or to his or its nominees, a certificate or certificates for
the number of shares of Class A Common Stock to which such holder shall be
entitled, together with cash in lieu of any fraction of a share.
(ii) The Corporation shall at all times when the
Convertible Preferred Stock shall be outstanding, reserve and keep available out
of its authorized but unissued stock, for the purpose of effecting the
conversion of the Convertible Preferred Stock, such number of its duly
authorized shares of Class A Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding Convertible Preferred
Stock. Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value of the shares of Class A Common Stock
issuable upon conversion of the Convertible Preferred Stock, the Corporation
will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Corporation may validly and legally issue fully paid
and nonassessable shares of Common Stock at such adjusted Conversion Price.
(iii) Upon any such conversion, no adjustment to the
Conversion Price shall be made for any declared but unpaid dividends on the
Convertible Preferred Stock surrendered for conversion or on the Class A Common
Stock delivered upon conversion.
(iv) All shares of Convertible Preferred Stock which
shall have been surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares, including
the rights, if any, to
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receive notices and to vote, shall immediately cease and terminate on the
Conversion Date, except only the right of the holders thereof to receive shares
of Class A Common Stock in exchange therefor and payment of any dividends
declared but unpaid thereon. Any shares of Convertible Preferred Stock so
converted shall be retired and cancelled and shall not be reissued, and the
Corporation (without the need for stockholder action) may from time to time take
such appropriate action as may be necessary to reduce the authorized Convertible
Preferred Stock accordingly.
(v) The Corporation shall pay any and all issue and
other taxes that may be payable in respect of any issuance or delivery of shares
of Class A Common Stock upon conversion of shares of Convertible Preferred Stock
pursuant to this Section 4. The Corporation shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of shares of Class A Common Stock in a name other than
that in which the shares of Convertible Preferred Stock so converted were
registered, and no such issuance or delivery shall be made unless and until the
person or entity requesting such issuance has paid to the Corporation the amount
of any such tax or has established, to the satisfaction of the Corporation, that
such tax has been paid.
(d) Adjustments to Conversion Price for Diluting Issues:
(i) Special Definitions. For purposes of this
Subsection 4(d), the following definitions shall apply:
(A) "Option" shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire Common Stock or
Convertible Securities, excluding options described in Subsection 4(d)(i)(D)(IV)
below.
(B) "Original Issue Date" shall mean the
date on which a share of Convertible Preferred Stock was first issued.
(C) "Convertible Securities" shall mean any
evidences of indebtedness, shares or other securities directly or indirectly
convertible into or exchangeable for Common Stock.
(D) "Additional Shares of Common Stock"
shall mean all shares of Class A Common Stock issued (or, pursuant to Subsection
4(d)(iii) below, deemed to be issued) by the Corporation after the Original
Issue Date, other than shares of Class A Common Stock issued or issuable:
(I) upon conversion of any
Convertible Securities
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outstanding on the Original Issue Date, or upon exercise of any Options
outstanding on the Original Issue Date;
(II) as a dividend or distribution
on Series Preferred Stock;
(III) by reason of a dividend, stock
split, split-up or other distribution on shares of Common Stock that is covered
by Subsection 4(e) or 4(f) below;
(IV) to employees or directors of,
or consultants to, the Corporation pursuant to plans adopted by the Board of
Directors of the Corporation; or
(V) upon the conversion or exercise
of the subordinated note or warrants issued or issuable in connection with the
acquisition by the Corporation of Sawyer Environmental Services and Sawyer
Environmental Recovery Facilities, Inc. (up to 158,590 shares in the aggregate),
upon the exercise of warrants issuable in connection with the acquisition by the
Corporation of Northeast Waste Services, Ltd. (up to 100,000 shares in the
aggregate), and upon the exercise of the warrant (no. R1995-1) issued to
Springer Sanitation Services, Inc.
(ii) No Adjustment of Conversion Price. No adjustment
in the number of shares of Common Stock into which any series of the Convertible
Preferred Stock is convertible shall be made, by adjustment in the applicable
Conversion Price thereof: (a) unless the consideration per share (determined
pursuant to Subsection 4(d)(v)) for an Additional Share of Common Stock issued
or deemed to be issued by the Corporation is less than the applicable Conversion
Price for such series in effect on the date of, and immediately prior to, the
issue of such Additional Shares, or (b) if prior to such issuance, the
Corporation receives written notice from the holders of more than 50% of the
then outstanding shares of such series of Series Preferred Stock agreeing that
no such adjustment shall be made as the result of the issuance of Additional
Shares of Common Stock.
(iii) Issue of Securities Deemed Issue of Additional
Shares of Common Stock.
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If the Corporation at any time or from time to time after the Original
Issue Date shall issue any Options or Convertible Securities or shall fix a
record date for the determination of holders of any class of securities entitled
to receive any such Options or Convertible Securities, then the maximum number
of shares of Common Stock (as set forth in the instrument relating thereto
without regard to any provision contained therein for a subsequent adjustment of
such number) issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of Common Stock
issued as of the time of such issue or, in case such a record date shall have
been fixed, as of the close of business on such record date, provided that
Additional Shares of Common Stock shall not be deemed to have been issued unless
the consideration per share (determined pursuant to Subsection 4(d)(v) hereof)
of such Additional Shares of Common Stock would be less than the applicable
Conversion Price in effect on the date of and immediately prior to such issue,
or such record date, as the case may be, and provided further that in any such
case in which Additional Shares of Common Stock are deemed to be issued:
(A) No further adjustment in the Conversion
Price shall be made upon the subsequent issue of Convertible Securities or
shares of Common Stock upon the exercise of such Options or conversion or
exchange of such Convertible Securities;
(B) If such Options or Convertible
Securities by their terms provide, with the passage of time or otherwise, for
any increase in the consideration payable to the Corporation, upon the exercise,
conversion or exchange thereof, the Conversion Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon any such increase
becoming effective, be recomputed to reflect such increase insofar as it affects
such Options or the rights of conversion or exchange under such Convertible
Securities;
(C) Upon the expiration or termination of
any unexercised Option, the Conversion Price shall be readjusted as if such
Option had never been issued; and
(D) In the event of any change in the number
of shares of Common Stock issuable upon the exercise, conversion or exchange of
any Option or Convertible Security, including, but not limited to, a change
resulting from the anti-dilution provisions thereof, the Conversion Price then
in effect shall forthwith be readjusted to such Conversion Price as would have
obtained had the adjustment which was made upon the issuance of such Option or
Convertible Security not exercised or
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converted prior to such change been made upon the basis of such change.
(iv) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common Stock.
In the event the Corporation shall at any time after the Original Issue
Date issue Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to Subsection 4(d)(iii), but excluding
shares issued as a stock split or combination as provided in Subsection 4(e) or
upon a dividend or distribution as provided in Subsection 4(f)), without
consideration or for a consideration per share less than the applicable
Conversion Price in effect on the date of and immediately prior to such issue,
then and in such event, such Conversion Price shall be reduced, concurrently
with such issue, to a price (calculated to the nearest cent) determined by
multiplying such Conversion Price by a fraction, (A) the numerator of which
shall be (1) the number of shares of Common Stock outstanding immediately prior
to such issue plus (2) the number of shares of Common Stock which the aggregate
consideration received or to be received by the Corporation for the total number
of Additional Shares of Common Stock so issued or deemed to be issued would
purchase at such Conversion Price; and (B) the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issue
plus the number of such Additional Shares of Common Stock so issued or deemed to
be issued; provided that, (i) for the purpose of this Subsection 4(d)(iv), all
shares of Common Stock issuable upon exercise or conversion of Options or
Convertible Securities outstanding immediately prior to such issue shall be
deemed to be outstanding, and (ii) the number of shares of Common Stock deemed
issuable upon exercise or conversion of such outstanding Options and Convertible
Securities shall not give effect to any adjustments to the conversion price or
conversion rate of such Options or Convertible Securities resulting from the
issuance of Additional Shares of Common Stock that is the subject of this
calculation.
(v) Determination of Consideration. For purposes of
this Subsection 4(d), the consideration received by the Corporation for the
issue of any Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration
shall:
(I) insofar as it consists of cash,
be computed at
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the aggregate of cash received by the Corporation, excluding amounts paid or
payable for accrued interest;
(II) insofar as it consists of
property other than cash, be computed at the fair market value thereof at the
time of such issue, as determined in good faith by the Board of Directors; and
(III) in the event Additional
Shares of Common Stock are issued together with other shares or securities or
other assets of the Corporation for consideration which covers both, be the
proportion of such consideration so received, computed as provided in clauses
(I) and (II) above, as determined in good faith by the Board of Directors.
(B) Options and Convertible Securities. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Subsection 4(d)(iii),
relating to Options and Convertible Securities, shall be determined by dividing
(x) the total amount, if any,
received or receivable by the Corporation as consideration for the issue of such
Options or Convertible Securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration) payable to the Corporation upon the exercise of such Options
or the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by
(y) the maximum number of shares of
Common Stock (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such number)
issuable upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
(vi) Multiple Closing Dates. In the event the
Corporation shall issue on more than one date Additional Shares of Common Stock
which are comprised of shares of the same series or class of Preferred Stock,
and such issuance dates occur within a period of no more than 120 days, then the
Conversion Price shall be adjusted only once on account of such issuances, with
such adjustment to occur upon the final such issuance and to give effect to all
such issuances as if they occurred on the date of the final such issuance.
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(e) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the Original Issue Date
effect a subdivision of the outstanding Class A Common Stock, the Conversion
Prices then in effect immediately before that subdivision shall be
proportionately decreased. If the Corporation shall at any time or from time to
time after the Original Issue Date combine the outstanding shares of Class A
Common Stock, the Conversion Prices then in effect immediately before the
combination shall be proportionately increased. Any adjustment under this
paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(f) Adjustment for Certain Dividends and Distributions. In the
event the Corporation at any time, or from time to time after the Original Issue
Date shall make or issue, or fix a record date for the determination of holders
of Class A Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Class A Common Stock, then and in each such
event the Conversion Prices for the Convertible Preferred Stock then in effect
shall be decreased as of the time of such issuance or, in the event such a
record date shall have been fixed, as of the close of business on such record
date, by multiplying each such Conversion Price for the Convertible Preferred
Stock then in effect by a fraction:
(1) the numerator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, and
(2) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date plus
the number of shares of Common Stock issuable in payment of such
dividend or distribution;
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Conversion Price for each series of Convertible Preferred Stock
shall be recomputed accordingly as of the close of business on such record date
and thereafter each such Conversion Price shall be adjusted pursuant to this
paragraph as of the time of actual payment of such dividends or distributions;
and provided further, however, that no such adjustment shall be made if the
holders of such series of Convertible Preferred
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Stock simultaneously receive a dividend or other distribution of shares of
Common Stock in a number equal to the number of shares of Common Stock as they
would have received if all outstanding shares of Convertible Preferred Stock had
been converted into Class A Common Stock on the date of such event.
(g) Adjustments for Other Dividends and Distributions. In the
event the Corporation at any time or from time to time after the Original Issue
Date shall make or issue, or fix a record date for the determination of holders
of Class A Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Corporation other than shares of Class A Common
Stock, then and in each such event provision shall be made so that the holders
of the Convertible Preferred Stock shall receive upon conversion thereof in
addition to the number of shares of Class A Common Stock receivable thereupon,
the amount of securities of the Corporation that they would have received had
the Convertible Preferred Stock been converted into Class A Common Stock on the
date of such event and had they thereafter, during the period from the date of
such event to and including the conversion date, retained such securities
receivable by them as aforesaid during such period, giving application to all
adjustments called for during such period under this paragraph with respect to
the rights of the holders of the Convertible Preferred Stock; and provided
further, however, that no such adjustment shall be made with respect to a series
of Convertible Preferred Stock if the holders of such series simultaneously
receive a dividend or other distribution of such securities in an amount equal
to the amount of such securities as they would have received if all outstanding
shares of such series had been converted into Class A Common Stock on the date
of such event.
(h) Adjustment for Reclassification, Exchange, or
Substitution. If the Class A Common Stock issuable upon the conversion of the
Convertible Preferred Stock shall be changed into the same or a different number
of shares of any class or classes of stock, whether by capital reorganization,
reclassification, or otherwise (other than a subdivision or combination of
shares or stock dividend provided for above, or a reorganization, merger,
consolidation, or sale of assets provided for below), then and in each such
event the holder of each such share of Convertible Preferred Stock shall have
the right thereafter to convert such share into the kind and amount of shares of
stock and other securities and property receivable upon such reorganization,
reclassification, or other change, by holders of the number of shares of Class A
Common Stock into which such shares of Convertible Preferred Stock might have
been converted immediately prior to such reorganization, reclassification, or
change, all subject to further adjustment as provided herein.
(i) No Impairment. The Corporation will not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets,
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consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Convertible Preferred Stock against impairment.
(j) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 4,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Convertible Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Convertible Preferred Stock, furnish or cause to be
furnished to such holder a similar certificate setting forth (i) such
adjustments and readjustments, (ii) the Conversion Price then in effect, and
(iii) the number of shares of Class A Common Stock and the amount, if any, of
other property which then would be received upon the conversion of such
Convertible Preferred Stock.
(l) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or
any other distribution) on its Class A Common Stock payable in Class A Common
Stock or other securities of the Corporation;
(ii) that the Corporation subdivides or combines
its outstanding shares of Class A Common Stock;
(iii) of any reclassification of the Class A Common
Stock of the Corporation (other than a subdivision or combination of its
outstanding shares of Class A Common Stock or a stock dividend or stock
distribution thereon), or of any consolidation or merger of the Corporation into
or with another corporation, or of the sale of all or substantially all of the
assets of the Corporation; or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Corporation;
-19-
then the Corporation shall cause to be filed at its principal office or at the
office of the transfer agent of the Convertible Preferred Stock, and shall cause
to be mailed to the holders of the Convertible Preferred Stock at their last
addresses as shown on the records of the Corporation or such transfer agent, at
least ten days prior to the date specified in (A) below or twenty days before
the date specified in (B) below, a notice stating
(A) the record date of such dividend, distribution,
subdivision or combination, or, if a record is not to be taken, the date as of
which the holders of Class A Common Stock of record to be entitled to such
dividend, distribution, subdivision or combination are to be determined, or
(B) the date on which such reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Class A
Common Stock of record shall be entitled to exchange their shares of Class A
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution or winding up.
5. Mandatory Conversion.
With respect to each series of Convertible Preferred Stock:
(a) Upon the closing of the sale of shares of Class A Common
Stock of the Corporation, at a price at least equal to 175% of the
then-applicable Conversion Price for such series in a public offering pursuant
to an effective registration statement under the Securities Act of 1933, as
amended, resulting in at least $20 million of gross proceeds to the Corporation
(such offering being referred to as a "Qualified Offering" and the closing date
thereof being referred to as the "Mandatory Conversion Date"), (i) all
outstanding shares of such series of Convertible Preferred Stock shall
automatically be converted into shares of the Class A Common Stock, at the then
effective conversion rate and (ii) the number of authorized shares of Preferred
Stock shall be automatically reduced by the number of shares of Preferred Stock
that had been designated as such series of Convertible Preferred Stock, and all
provisions included under the caption "Series Preferred Stock", and all
references to such series of Series Preferred Stock insofar as they relate to
such series (but with no impact on any other series which is not so converted),
shall be deleted and shall be of no further force or effect.
(b) All holders of record of shares of such series of
Convertible Preferred Stock shall be given written notice of the Mandatory
Conversion Date and the
-20-
place designated for mandatory conversion of all such shares of such series of
Convertible Preferred Stock pursuant to this Section 5. Such notice need not be
given in advance of the occurrence of the Mandatory Conversion Date. Such notice
shall be sent by first class or registered mail, postage prepaid, to each record
holder of such series of Convertible Preferred Stock at such holder's address
last shown on the records of the transfer agent for such series of Convertible
Preferred Stock (or the records of the Corporation, if it serves as its own
transfer agent). Upon receipt of such notice, each holder of shares of such
series of Convertible Preferred Stock shall surrender his or its certificate or
certificates for all such shares to the Corporation at the place designated in
such notice, and shall thereafter receive certificates for the number of shares
of Public Offering Common Stock to which such holder is entitled pursuant to
this Section 5. On the Mandatory Conversion Date, all rights with respect to
such series of Convertible Preferred Stock so converted, including the rights,
if any, to receive notices and vote (other than as a holder of Public Offering
Common Stock) will terminate, except only the rights of the holders thereof,
upon surrender of their certificate or certificates therefor, to receive
certificates for the number of shares of Public Offering Common Stock into which
such series of Convertible Preferred Stock has been converted, and payment of
any declared but unpaid dividends thereon. If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly executed by the registered holder or by his or its attorney
duly authorized in writing. As soon as practicable after the Mandatory
Conversion Date and the surrender of the certificate or certificates for such
series of Convertible Preferred Stock, the Corporation shall cause to be issued
and delivered to such holder, or on his or its written order, a certificate or
certificates for the number of full shares of Public Offering Common Stock
issuable on such conversion in accordance with the provisions hereof and cash as
provided in Subsection 4(b) in respect of any fraction of a share of Public
Offering Common Stock otherwise issuable upon such conversion.
(c) All certificates evidencing shares of such series of
Convertible Preferred Stock which are required to be surrendered for conversion
in accordance with the provisions hereof shall, from and after the Mandatory
Conversion Date, be deemed to have been retired and cancelled and the shares of
such series of Convertible Preferred Stock represented thereby converted into
Public Offering Common Stock for all purposes, notwithstanding the failure of
the holder or holders thereof to surrender such certificates on or prior to such
date. The Corporation may thereafter take such appropriate action (without the
need for stockholder action) as may be necessary to
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reduce the authorized shares of such series of Convertible
Preferred Stock accordingly.
6. Optional Redemption.
(a) At any time and from time to time, the Corporation may, at
the option of its Board of Directors, redeem the Series A Preferred Stock, the
Series B Preferred Stock and/or the Series C Preferred Stock (the "Redeemable
Preferred Stock"), in whole or in part, by paying: $1.50 per share of Series A
Preferred Stock; $2.00 per share of Series B Preferred Stock and $7.00 per share
of Series C Preferred Stock (subject to appropriate adjustment for stock splits,
stock dividends, combinations or other similar recapitalizations affecting such
shares) in cash (hereinafter referred to as the "Redemption Price") for the
applicable series.
(b) In the event of any redemption of only a part of a series
of the then outstanding Redeemable Preferred Stock, the Corporation shall effect
such redemption pro rata among the holders thereof based on the aggregate
redemption price payable for all of the outstanding shares of such series of
Redeemable Preferred Stock on the date of the Redemption Notice (as defined
below).
(c) At least 10 days prior to the date fixed for any
redemption of Redeemable Preferred Stock (hereinafter referred to as the
"Redemption Date"), written notice shall be mailed, by first class or registered
mail, postage prepaid, to each holder of record of shares of Redeemable
Preferred Stock to be redeemed, at his or its address last shown on the records
of the transfer agent of the Redeemable Preferred Stock (or the records of the
Corporation, if it serves as its own transfer agent), notifying such holder of
the election of the Corporation to redeem such shares, specifying the Redemption
Date and calling upon such holder to surrender to the Corporation, in the manner
and at the place designated, his or its certificate or certificates representing
the shares to be redeemed (such notice is hereinafter referred to as the
"Redemption Notice"). On or prior to the Redemption Date, each holder of
Redeemable Preferred Stock to be redeemed shall surrender his or its certificate
or certificates representing such shares to the Corporation, in the manner and
at the place designated in the Redemption Notice, and thereupon the Redemption
Price of such shares shall be payable to the order of the person whose name
appears on such certificate or certificates as the owner thereof and each
surrendered certificate shall be cancelled. In the event less than all the
shares represented by any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares. From and after the Redemption
Date, unless there shall have been a default in payment of the Redemption Price,
all rights of the holders of the Redeemable Preferred Stock designated for
redemption in the Redemption Notice as holders of Redeemable Preferred Stock of
the Corporation (except the right to receive the Redemption Price without
interest upon
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surrender of their certificate or certificates) shall cease with respect to such
shares, and such shares shall not thereafter be transferred on the books of the
Corporation or be deemed to be outstanding for any purpose whatsoever.
(d) Subject to the provisions hereof, the Board of Directors
of the Corporation shall have authority to prescribe the manner in which
Redeemable Preferred Stock shall be redeemed from time to time. Any shares of
Redeemable Preferred Stock so redeemed shall permanently be retired, shall no
longer be deemed outstanding and shall not under any circumstances be reissued,
and the Corporation may from time to time take such appropriate action as may be
necessary to reduce the authorized Redeemable Preferred Stock accordingly.
Nothing herein contained shall prevent or restrict the purchase by the
Corporation, from time to time either at public or private sale, of the whole or
any part of the Redeemable Preferred Stock at such price or prices as the
Corporation may determine, subject to the provisions of applicable law.
7. Mandatory Redemption of Series C Preferred Stock
(a) Irrespective of the provisions of Section 6 above, the
Corporation will, subject to the conditions set forth in Section 9 below, upon
the closing of a Liquidity Event, redeem all shares of Series C Preferred Stock
outstanding as of the date thereof, at a price equal to the Series C Redemption
Price.
(b) In the event that a Liquidity Event has not closed on or
prior to December 31, 2000, the Corporation will, subject to the conditions set
forth in Section 9 below, redeem all shares of Series C Preferred Stock held by
a holder thereof at a price equal to the Series C Redemption Price
simultaneously with the Put Closing Date (as defined in the Repurchase Agreement
dated as of December 22, 1995 among the Corporation, BCI Growth III, L.P., North
Atlantic Venture Fund, L.P. and Vermont Venture Capital Fund, L.P. (the
"Repurchase Agreement")) with respect to the repurchase of the warrants dated
July 26, 1993 and May 25, 1994 (the "Warrants"), or of the shares of Common
Stock issued upon the exercise of the Warrants, held by such holder. In the
event a holder tenders fewer than all of the Warrants or shares of Common Stock
issued upon the exercise thereof, the Corporation shall redeem a proportional
amount of such holder's Series C Preferred Stock. Following the Put Closing Date
(as defined in the Repurchase Agreement), the Series C Preferred Stock shall be
deemed to have been redeemed in full and on such date all rights of the holders
of such shares as a stockholder of the Corporation shall cease, except the right
to receive
-23-
the Series C Redemption Price upon presentation and surrender of the certificate
representing the Series C Preferred Stock, and such Series C Preferred Stock
will not from and after the Put Closing Date be deemed to be outstanding.
(c) For purposes hereof, a "Liquidity Event" shall be
deemed to occur:
(i) upon the closing of a Qualified Offering; or
(ii) upon (i) a merger or consolidation of the Corporation
with or into any other corporation or corporations, other than (a) a merger of
consolidation of a subsidiary of the Corporation with or into the Corporation or
with or into any other subsidiary or (b) a merger in which the Corporation is
the surviving corporation and which does not result in more than 50% of any
class of the capital stock of the Corporation outstanding immediately after the
effective date of such merger being owned of record or beneficially by persons
other than the holders of such capital stock immediately prior to such merger;
(ii) the sale of all or substantially all the assets of the Corporation; (iii) a
sale, lease, transfer or other disposition (or the last such sale, lease,
transfer or other disposition in a series of related transactions) resulting in
the transfer of more than 50% of the outstanding capital stock of the
Corporation to an unrelated and unaffiliated third party purchaser; or (iv) any
other transaction (or the last such transaction in a series of related
transactions) resulting in the transfer by John W. Casella and/or Douglas R.
Casella to any one or more persons of an aggregate of more than twenty percent
(20%) of the shares of any class of the Corporation's stock held by John W.
Casella and/or Douglas R. Casella, or which creates in favor of any one or more
persons the right, directly or indirectly, to acquire from John W. Casella
and/or Douglas R. Casella shares which in the aggregate represent more than
twenty percent (20%) of the shares of any class of the Corporation's stock held
by John W. Casella and Douglas R. Casella
8. Stockholders' Right to Require Redemption of
Series Preferred Stock.
(a) On or after January 1, 2001, each of the holders of Series
D Convertible Preferred Stock shall have the option to tender all or any portion
of such shares held by such person (the "Series D Holder") to the
Corporation (the "Series D Put"), by delivering to the Corporation an instrument
in writing (the "Series D Put Notice") notifying the Corporation of such Series
D Holder's intention to tender to the Corporation all or a portion of such
shares. The Corporation shall immediately acknowledge receipt of the Series D
Put Notice by telex, telegram, telecopy or other similar electronic device, and
confirm such notification by first class mail, and at such time shall notify all
other holders of Series D Preferred Stock of its receipt thereof. The
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Series D Put Notice shall specify the amount of shares of Series D Preferred
Stock that the Series D Holder proposes to tender to the Corporation. If the
Corporation receives additional Series D Put Notices from other Series D Holders
within ten (10) days of the receipt of the initial Series D Put Notice, the
Corporation shall consummate all Series D Puts subject thereto simultaneously.
(b) The redemption price for each share of Series D Preferred
Stock shall be equal to the greater of (x) the Fair Market Value Per Share (as
hereinafter defined) as of the date on which the Series D Put Notice shall have
been given, or (y) $7.00 per share (subject to appropriate adjustment in the
event of any stock dividend, stock split, combination or other similar
recapitalization affecting such shares) (such amount in this clause (y) being
referred to as the "Series D Liquidation Amount", and the greater of the amounts
in clause (x) or clause (y) being referred to as the "Series D Redemption
Price".
(c) Within ten days after the determination of the Fair Market
Value Per Share, such Series D Holder shall elect the "Interest Option" or the
"Equity Option". If the Series D Holder elects the "Interest Option", the shares
of Series D Preferred Stock to be so redeemed shall be deemed to have been
redeemed in full on the date on which the first payment therefor is made (the
"Series D Put Closing Date"), and on such closing date all rights of the holder
of such shares as a holder thereof shall cease, except the right to receive the
Series D Redemption Price (together with any interest payable thereon) upon
presentation and surrender of the certificate representing such shares, and such
shares will not from and after such closing date, as the case may be, be deemed
to be outstanding. If the Series D Holder elects the Interest Option, the Series
D Liquidation Amount for each of the shares of Series D Preferred Stock to be so
redeemed shall be paid in eight (8) quarterly installments, commencing on the
Series D Put Closing Date, together with interest at a rate equal to 15% per
annum on the Series D Liquidation Amount. Any amount of the Series D Redemption
Price in excess of the Series D Liquidation Amount shall be paid not later than
the date on which the final installment of the Series D Liquidation Amount is
due, together with interest thereon at a rate equal to the prime rate announced
from time to time by Citibank, N.A. plus two percent (2%) per annum. Such
interest shall accrue from the date of the Series D Put Notice (but not prior to
December 31, 2000). All payments on account of the aggregate redemption price
for any shares of Series D Preferred Stock shall be deemed to be applied equally
to all of the shares of Series D Preferred Stock to be redeemed and shall be
deemed to be applied first to the payment of the interest on the Series D
Liquidation Amount; second, to the Series D Liquidation Amount; third, to the
interest due on the
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amount of the Series D Redemption Price in excess of the Series D Liquidation
Amount; and fourth, to the amount of the Series D Redemption Price in excess of
the Series D Liquidation Amount. The Series D Put Closing Date shall be the
thirtieth (30th) day after determination of the redemption price pursuant to
paragraph (b) above, at the Corporation's headquarters, or such other date and
place as is mutually agreeable to the Corporation and the tendering Series D
Holders.
(d) If a Series D Holder elects the "Equity Option", (i) the
Corporation shall redeem, in eight quarterly installments commencing on the
Series D Put Closing Date, such number of shares of Series D Preferred Stock as
has an aggregate redemption price equal to the product of (X) the Series D
Liquidation Amount times (Y) the aggregate number of Series D Preferred Stock to
be so redeemed; and (ii) the Corporation shall redeem the remaining shares of
Series D Preferred stock to be so redeemed (if any) not later than the date on
which the final redemption of Series D Preferred Stock pursuant to clause (i)
above is due. The redemption price for the shares of Series D Preferred Stock
pursuant to the Equity Option shall be equal to the amount set forth in
paragraph (b) above. Notwithstanding the foregoing, at any time prior to the
first to occur of (I) the redemption by the Corporation of all of the remaining
shares of Series D Preferred Stock to be redeemed from such Holder; or (II) the
exercise by holders of the Series D Preferred Stock of their remedies under
Section 4.3 of the 1995 Stockholders Agreement among the Corporation and the
stockholders of the Corporation dated as of December 22, 1995, any Holder of
Series D Preferred Stock who has elected the Equity Option may revoke the Series
D Put Notice with respect to any shares of Series D Preferred Stock held by him
then outstanding and may repurchase from the Corporation all shares of Series D
Preferred Stock previously redeemed from such holder by the Corporation. The
price to be paid by the holder for such shares of Series D Preferred Stock shall
be equal to the price paid by the Corporation to the holder for such shares of
Series D Preferred Stock. Immediately upon the repurchase of such shares of
Series D Preferred Stock by such holder, such shares shall be automatically
converted into shares of Class A Common Stock in a manner consistent with the
provisions of Section 5(a) above at the then effective conversion rate. The
Corporation shall give at least ten days' notice to the holders of Series D
Preferred Stock which are being redeemed prior to redeeming any shares of Series
D Preferred Stock other than in accordance with clause (i) above. No interest
shall be paid on the purchase price of any Series D Preferred Stock if the
Series D Holder elects the Equity Option with respect thereto.
(e) Any holder of Series A Preferred Stock or Series B
Preferred Stock shall have the right to require the Corporation to redeem such
shares upon the following events:
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(i) simultaneously with, or at any time following,
the exercise, for cash, of the Warrants. The aggregate redemption price so
payable to the holder on account of the redemption of the Series A Preferred
Stock or Series B Preferred Stock shall not exceed the aggregate cash amount so
received by the Corporation in payment of the exercise price of the Warrants.
The Corporation shall make payment for such shares in cash.
(ii) simultaneously with the exercise by such holder
of the Put (as defined in the Repurchase Agreement) with respect to the 1993
Warrants or the 1994 Warrants held by him. If the holder has exercised the
"Interest Option" with respect to such Put (as defined in the Repurchase
Agreement), the redemption price payable to the holder of the Series A Preferred
or the Series B Preferred to be so redeemed (the "Series A Redemption Price" or
the "Series B Redemption Price", as the case may be) shall bear interest at a
rate equal to 15% per annum from the date of the Put Notice (as defined in the
Repurchase Agreement) (but not prior to December 31, 2000). If the holder has
exercised the "Equity Option" with respect to such Put (as defined in the
Repurchase Agreement), the Series A Redemption Price and the Series B Redemption
Price shall not bear interest. The Series A Redemption Price and the Series B
Redemption Price shall be payable in eight quarterly installments, commencing on
the Put Closing Date (as defined in the Repurchase Agreement).
The redemption price payable by the Corporation for shares of Series A Preferred
Stock or Series B Preferred Stock to be redeemed pursuant to this paragraph (d)
shall be $1.50 per share of Series A Preferred Stock and $2.00 per share of
Series B Preferred Stock (subject to appropriate adjustment in the event of any
stock dividend, stock split, combination or other similar recapitalization
affecting such shares). At the closing, the holders whose shares are to be
redeemed shall deliver the stock certificates evidencing the shares to be
redeemed, duly endorsed for transfer to the Corporation, and free and clear of
any lien, charge or other encumbrance (and each such holder shall deliver to the
Corporation a certificate to the effect that the shares are good and marketable
and free of any lien, charge or other encumbrance). From and after the date on
which the first payment for the redemption of the shares of Series A Preferred
Stock or Series B Preferred Stock is made (regardless of whether the holder
thereof has elected the Interest Option or the Equity Option with respect to the
repurchase by the Corporation of the 1993 Warrants or the 1994 Warrants), all
rights of the holder with respect to the shares to be so redeemed will
terminate, except only the rights of the holders thereof to receive payment for
such shares as described above.
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9. Limitation on Redemption Obligations.
Notwithstanding anything in this Article FOURTH to the contrary:
(a) If the funds of the Corporation legally available for
redemption of the capital stock of the Corporation on any date are insufficient
to redeem the number of shares of capital stock, and/or warrants exercisable
therefor, then required under Section 7 or 8 or under the Repurchase Agreement
to be redeemed or repurchased, those funds which are legally available will be
used to redeem the maximum possible number of such shares of capital stock
and/or warrants exercisable therefor ratably on the basis of the principal
amount of the redemption or repurchase price which would the be payable if the
funds of the Corporation legally available therefor had been sufficient to
redeem all shares of capital stock and/or warrants exercisable therefor then
required to be redeemed or repurchased. At any time thereafter when additional
funds of the Corporation become legally available for the redemption of the
capital stock of the Corporation, such funds will be used, at the end of the
next succeeding fiscal quarter, to redeem the balance of the shares and/or
warrants which the Corporation was theretofore obligated to redeem, ratably on
the basis set forth in the preceding sentence.
(b) Unless there shall have been a default in payment of the
Redemption Price pursuant to Section 6 or 7 or the Put Price pursuant to Section
8, no share of Series Preferred Stock (other than shares of Series D Preferred
Stock being repurchased pursuant to the Equity Option which have not yet been
repurchased by the Corporation) shall be entitled to any dividends declared
after its Redemption Date (with respect to Section 6 or 7) or the closing date
of any put (pursuant to Section 8), and on such Redemption Date or closing date
all rights of the holder of such share as a stockholder of the Corporation shall
cease, except the right to receive the redemption price or put price of such
shares (together with any interest payable thereon) upon presentation and
surrender of the certificate representing such share, and such share will not
from and after such Redemption Date or closing date, as the case may be, be
deemed to be outstanding.
(c) Any Series Preferred Stock redeemed pursuant to Section 6,
7 or 8 will be cancelled and will not under any circumstances be reissued, sold
or transferred (other than as expressly set forth in paragraph 8(c) above), and
the Corporation may from time to time take such appropriate action as may be
necessary to reduce the authorized Series Preferred Stock accordingly.
10. Definitions.
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For purposes of this Article FOURTH, "Fair Market Value Per Share" of a
series of Convertible Preferred Stock means the fair market value of that number
of shares of Class A Common Stock into which a share of such series of
Convertible Preferred Stock is then convertible (treating, for purposes of such
determination, the Class B Common Stock as having equal per share voting rights
as the Class A Common Stock). Such determination shall be made by a nationally
known investment banking firm experienced in such valuations acceptable to the
Corporation and the holders of a majority of the shares to be redeemed. If the
Corporation and the holders of a majority of the shares of Convertible Preferred
Stock to be redeemed are unable to agree on the selection of such an investment
banking firm within 30 days after the date of the Election Notice, then each of
the Corporation, on the one hand, and the electing holders, on the other hand,
shall choose one investment banking firm so qualified, and such two firms shall
select a third such firm so qualified. The investment banking firm so selected
shall furnish the Corporation and the electing holders with a written valuation
(using one or more valuation methods that such firm, in its best professional
judgment, determines to be most appropriate) within 60 days of such selection,
setting forth its determination of the Fair Market Value Per Share. When
determining such fair market value, the investment banking firm shall consider,
among other factors, book value, replacement value, earnings and the value of
future cash flows of the Corporation as an on-going enterprise, shall consider
both the sale of various combinations of the individual assets of the
Corporation as well as a sale of the Corporation as a whole, choosing the manner
of sale which maximizes the aggregate value of the assets being sold, and shall
make no deduction, discount or other subtraction whatsoever for the possible
minority status of any such holder or for the restrictions on transfer contained
in Section 2 of the 1995 Stockholders Agreement to which the holders of the
shares to be redeemed are subject. The determination of the investment banking
firm shall be final and binding on the Corporation and the electing holders. The
costs of the valuation shall be borne equally by the Corporation, on one hand,
and the electing holders, on the other hand.
FIFTH. In furtherance of and not in limitation of powers conferred by
statute, it is further provided:
1. Election of directors need not be by written ballot.
2. The Board of Directors is expressly authorized to adopt,
amend or repeal the By-Laws of the Corporation.
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SIXTH. Except to the extent that the General Corporation Law of
Delaware prohibits the elimination or limitation of liability of directors for
breaches of fiduciary duty, no director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary damages for any
breach of fiduciary duty as a director, notwithstanding any provision of law
imposing such liability. No amendment to or repeal of this provision shall apply
to or have any effect on the liability or alleged liability of any director of
the Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment.
SEVENTH. 1. Actions, Suits and Proceedings Other than by or in the
Right of the Corporation. The Corporation shall indemnify each person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that he is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at the
request of the Corporation, as a director, officer or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan) (all such persons being
referred to hereafter as an "Indemnitee"), or by reason of any action alleged to
have been taken or omitted in such capacity, against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such action, suit
or proceeding and any appeal therefrom, if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful. Notwithstanding
anything to the contrary in this Article, except as set forth in Section 7
below, the Corporation shall not indemnify an Indemnitee seeking indemnification
in connection with a proceeding (or part thereof) initiated by the Indemnitee
unless the initiation thereof was approved by the Board of Directors of the
Corporation. Notwithstanding anything to the contrary in this Article, the
Corporation shall not indemnify an Indemnitee to the extent such Indemnitee is
reimbursed from the proceeds of insurance, and in the event the Corporation
makes any indemnification payments to an Indemnitee and such Indemnitee is
subsequently reimbursed from the proceeds of insurance, such Indemnitee shall
promptly refund such indemnification payments to the Corporation to the extent
of such insurance reimbursement.
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2. Actions or Suits by or in the Right of the Corporation. The
Corporation shall indemnify any Indemnitee who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at the
request of the Corporation, as a director, officer or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan), or by reason of any
action alleged to have been taken or omitted in such capacity, against all
expenses (including attorneys' fees) and, to the extent permitted by law,
amounts paid in settlement actually and reasonably incurred by him or on his
behalf in connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery of Delaware shall
determine upon application that, despite the adjudication of such liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses (including attorneys' fees)
which the Court of Chancery of Delaware shall deem proper.
3. Indemnification for Expenses of Successful Party. Notwithstanding
the other provisions of this Article, to the extent that an Indemnitee has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Sections 1 and 2 of this Article, or in defense of any
claim, issue or matter therein, or on appeal from any such action, suit or
proceeding, he shall be indemnified against all expenses (including attorneys'
fees) actually and reasonably incurred by him or on his behalf in connection
therewith. Without limiting the foregoing, if any action, suit or proceeding is
disposed of, on the merits or otherwise (including a disposition without
prejudice), without (i) the disposition being adverse to the Indemnitee, (ii) an
adjudication that the Indemnitee was liable to the Corporation, (iii) a plea of
guilty or nolo contendere by the Indemnitee, (iv) an adjudication that the
Indemnitee did not act in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, and (v) with
respect to any criminal proceeding, an adjudication that the Indemnitee had
reasonable cause to believe his conduct was unlawful, the Indemnitee shall be
considered for the purposes hereof to have been wholly successful with respect
thereto.
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4. Notification and Defense of Claim. As a condition precedent to his
right to be indemnified, the Indemnitee must notify the Corporation in writing
as soon as practicable of any action, suit, proceeding or investigation
involving him for which indemnity will or could be sought. With respect to any
action, suit, proceeding or investigation of which the Corporation is so
notified, the Corporation will be entitled to participate therein at its own
expense and/or to assume the defense thereof at its own expense, with legal
counsel reasonably acceptable to the Indemnitee. After notice from the
Corporation to the Indemnitee of its election so to assume such defense, the
Corporation shall not be liable to the Indemnitee for any legal or other
expenses subsequently incurred by the Indemnitee in connection with such claim,
other than as provided below in this Section 4. The Indemnitee shall have the
right to employ his own counsel in connection with such claim, but the fees and
expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded
that there may be a conflict of interest or position on any significant issue
between the Corporation and the Indemnitee in the conduct of the defense of such
action or (iii) the Corporation shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and expenses
of counsel for the Indemnitee shall be at the expense of the Corporation, except
as otherwise expressly provided by this Article. The Corporation shall not be
entitled, without the consent of the Indemnitee, to assume the defense of any
claim brought by or in the right of the Corporation or as to which counsel for
the Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above.
5. Advance of Expenses. Subject to the provisions of Section 6 below,
in the event that the Corporation does not assume the defense pursuant to
Section 4 of this Article of any action, suit, proceeding or investigation of
which the Corporation receives notice under this Article, any expenses
(including attorneys' fees) incurred by an Indemnitee in defending a civil or
criminal action, suit, proceeding or investigation or any appeal therefrom shall
be paid by the Corporation in advance of the final disposition of such matter;
provided, however, that the payment of such expenses incurred by an Indemnitee
in advance of the final disposition of such matter shall be made only upon
receipt of an undertaking by or on behalf of the Indemnitee to repay all amounts
so advanced in the event that it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified by the Corporation as authorized in
this Article. Such undertaking shall be accepted without reference to the
financial ability of the Indemnitee to make such repayment.
6. Procedure for Indemnification. In order to obtain indemnification or
advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article, the
Indemnitee
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shall submit to the Corporation a written request, including in such request
such documentation and information as is reasonably available to the Indemnitee
and is reasonably necessary to determine whether and to what extent the
Indemnitee is entitled to indemnification or advancement of expenses. Any such
indemnification or advancement of expenses shall be made promptly, and in any
event within 60 days after receipt by the Corporation of the written request of
the Indemnitee, unless with respect to requests under Section 1, 2 or 5 the
Corporation determines within such 60- day period that the Indemnitee did not
meet the applicable standard of conduct set forth in Section 1 or 2, as the case
may be. Such determination shall be made in each instance by (a) a majority vote
of the directors of the Corporation consisting of persons who are not at that
time parties to the action, suit or proceeding in question ("disinterested
directors"), whether or not a quorum, (b) a majority vote of a quorum of the
outstanding shares of stock of all classes entitled to vote for directors,
voting as a single class, which quorum shall consist of stockholders who are not
at that time parties to the action, suit or proceeding in question, (c)
independent legal counsel (who may, to the extent permitted by law, be regular
legal counsel to the Corporation), or (d) a court of competent jurisdiction.
7. Remedies. The right to indemnification or advances as granted by
this Article shall be enforceable by the Indemnitee in any court of competent
jurisdiction if the Corporation denies such request, in whole or in part, or if
no disposition thereof is made within the 60-day period referred to above in
Section 6. Unless otherwise required by law, the burden of proving that the
Indemnitee is not entitled to indemnification or advancement of expenses under
this Article shall be on the Corporation. Neither the failure of the Corporation
to have made a determination prior to the commencement of such action that
indemnification is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct, nor an actual determination by the
Corporation pursuant to Section 6 that the Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the Indemnitee has not met the applicable standard of conduct.
The Indemnitee's expenses (including attorneys' fees) incurred in connection
with successfully establishing his right to indemnification, in whole or in
part, in any such proceeding shall also be indemnified by the Corporation.
8. Subsequent Amendment. No amendment, termination or repeal of this
Article or of the relevant provisions of the General Corporation Law of Delaware
or any other applicable laws shall affect or diminish in any way the rights of
any Indemnitee to
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indemnification under the provisions hereof with respect to any action, suit,
proceeding or investigation arising out of or relating to any actions,
transactions or facts occurring prior to the final adoption of such amendment,
termination or repeal.
9. Other Rights. The indemnification and advancement of expenses
provided by this Article shall not be deemed exclusive of any other rights to
which an Indemnitee seeking indemnification or advancement of expenses may be
entitled under any law (common or statutory), agreement or vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in any other capacity while holding office for the
Corporation, and shall continue as to an Indemnitee who has ceased to be a
director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of the Indemnitee. Nothing contained in this
Article shall be deemed to prohibit, and the Corporation is specifically
authorized to enter into, agreements with officers and directors providing
indemnification rights and procedures different from those set forth in this
Article. In addition, the Corporation may, to the extent authorized from time to
time by its Board of Directors, grant indemnification rights to other employees
or agents of the Corporation or other persons serving the Corporation and such
rights may be equivalent to, or greater or less than, those set forth in this
Article.
10. Partial Indemnification. If an Indemnitee is entitled under any
provision of this Article to indemnification by the Corporation for some or a
portion of the expenses (including attorneys' fees), judgments, fines or amounts
paid in settlement actually and reasonably incurred by him or on his behalf in
connection with any action, suit, proceeding or investigation and any appeal
therefrom but not, however, for the total amount thereof, the Corporation shall
nevertheless indemnify the Indemnitee for the portion of such expenses
(including attorneys' fees), judgments, fines or amounts paid in settlement to
which the Indemnitee is entitled.
11. Insurance. The Corporation may purchase and maintain insurance, at
its expense, to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan) against any expense,
liability or loss incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under the General
Corporation Law of Delaware.
12. Merger or Consolidation. If the Corporation is merged into or
consolidated with another corporation and the Corporation is not the surviving
corporation, the surviving corporation shall assume the obligations of the
Corporation under this Article with respect to any action, suit, proceeding or
investigation arising
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out of or relating to any actions, transactions or facts occurring prior to the
date of such merger or consolidation.
13. Savings Clause. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with any action, suit, proceeding or investigation, whether civil,
criminal or administrative, including an action by or in the right of the
Corporation, to the fullest extent permitted by any applicable portion of this
Article that shall not have been invalidated and to the fullest extent permitted
by applicable law.
14. Definitions. Terms used herein and defined in Section 145(h) and
Section 145(i) of the General Corporation Law of Delaware shall have the
respective meanings assigned to such terms in such Section 145(h) and Section
145(i).
15. Subsequent Legislation. If the General Corporation Law of Delaware
is amended after adoption of this Article to expand further the indemnification
permitted to Indemnitees, then the Corporation shall indemnify such persons to
the fullest extent permitted by the General Corporation Law of Delaware, as so
amended.
EIGHTH. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute and this Certificate of
Incorporation, and all rights conferred upon stockholders herein are granted
subject to this reservation.
EXECUTED at Rutland, Vermont, on December 22, 1995.
----------------------------
President
ATTEST:
- --------------------
Secretary
[Corporate Seal]
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AMENDED AND RESTATED
BY-LAWS
OF
CASELLA WASTE SYSTEMS, INC.
ARTICLE 1 - Stockholders
1.1 Place of Meetings. All meetings of stockholders shall be held at
such place within or without the State of Delaware as may be designated from
time to time by the Board of Directors or the President or, if not so
designated, at the registered office of the corporation.
1.2 Annual Meeting. The annual meeting of stockholders for the election
of directors and for the transaction of such other business as may properly be
brought before the meeting shall be held on a date to be fixed by the Board of
Directors or the President (which date shall not be a legal holiday in the place
where the meeting is to be held) at the time and place to be fixed by the Board
of Directors or the President and stated in the notice of the meeting. If no
annual meeting is held in accordance with the foregoing provisions, the Board of
Directors shall cause the meeting to be held as soon thereafter as convenient.
If no annual meeting is held in accordance with the foregoing provisions, a
special meeting may be held in lieu of the annual meeting, and any action taken
at that special meeting shall have the same effect as if it had been taken at
the annual meeting, and in such case all references in these By-laws to the
annual meeting of the stockholders shall be deemed to refer to such special
meeting.
1.3 Special Meetings. Special meetings of stockholders may be called at
any time by the President or by the Board of Directors. Business transacted at
any special meeting of stockholders shall be limited to matters relating to the
purpose or purposes stated in the notice of meeting.
1.4 Notice of Meetings. Except as otherwise provided by
law, written notice of each meeting of stockholders, whether annual or special,
shall be given not less than 10 nor more than 60 days before the date of the
meeting to each stockholder entitled to vote at such meeting. The notices of all
meetings shall state the place, date and hour of the meeting. The notice of a
special meeting shall state, in addition, the purpose or purposes for which the
meeting is called. If mailed, notice is given when deposited in the United
States mail, postage prepaid, directed to the stockholder at his address as it
appears on the records of the corporation.
1.5 Voting List. The officer who has charge of the stock ledger of the
corporation shall prepare, at least 10 days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting, at a place within the city where the meeting is to
be held. The list shall also be produced and kept at the time and place of the
meeting during the whole time of the meeting, and may be inspected by any
stockholder who is present.
1.6 Quorum. Except as otherwise provided by law, the Certificate of
Incorporation or these By-laws, the holders of a majority of the shares of the
capital stock of the corporation issued and outstanding and entitled to vote at
the meeting, present in person or represented by proxy, shall constitute a
quorum for the transaction of business.
1.7 Adjournments. Any meeting of stockholders may be adjourned to any
other time and to any other place at which a meeting of stockholders may be held
under these By-laws by the stockholders present or represented at the meeting
and entitled to vote, although less than a quorum, or, if no stockholder is
present, by any officer entitled to preside at or to act as Secretary of such
meeting. It shall not be necessary to notify any stockholder of any adjournment
of less than 30 days if the time and place of the adjourned meeting are
announced at the meeting at which adjournment is taken, unless after the
adjournment a new record date is fixed for the adjourned meeting. At the
adjourned meeting, the corporation may transact any business which might have
been transacted at the original meeting.
1.8 Voting and Proxies. Each stockholder shall have one vote for each
share of stock entitled to vote held of record by
such stockholder and a proportionate vote for each fractional share so held,
unless otherwise provided in the Certificate of Incorporation. Each stockholder
of record entitled to vote at a meeting of stockholders, or to express consent
or dissent to corporate action in writing without a meeting, may vote or express
such consent or dissent in person or may authorize another person or persons to
vote or act for him by written proxy executed by the stockholder or his
authorized agent and delivered to the Secretary of the corporation. No such
proxy shall be voted or acted upon after three years from the date of its
execution, unless the proxy expressly provides for a longer period.
1.9 Action at Meeting. When a quorum is present at any meeting, the
holders of shares of stock representing a majority of the votes cast on a matter
(or if there are two or more classes of stock entitled to vote as separate
classes, then in the case of each such class, the holders of shares of stock of
that class representing a majority of the votes cast on a matter) shall decide
any matter to be voted upon by the stockholders at such meeting, except when a
different vote is required by express provision of law, the Certificate of
Incorporation or these By-Laws. When a quorum is present at any meeting, any
election by stockholders shall be determined by a plurality of the votes cast on
the election.
1.10 Action without Meeting. Any action required or permitted to be
taken at any annual or special meeting of stockholders of the corporation may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, is signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote on such action were present and voted. Prompt notice of the
taking of corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
ARTICLE 2 - Directors
2.1 General Powers. The business and affairs of the corporation shall
be managed by or under the direction of a Board of Directors, who may exercise
all of the powers of the corporation except as otherwise provided by law or the
Certificate of Incorporation. In the event of a vacancy in the Board of
Directors, the remaining directors, except as otherwise provided by law, may
exercise the powers of the full Board until the vacancy is filled.
2.2 Number; Election and Qualification. The number of directors which
shall constitute the whole Board of Directors shall be determined by resolution
of the stockholders or the Board of Directors, but in no event shall be less
than one. The number of directors may be decreased at any time and from time to
time either by the stockholders or by a majority of the directors then in
office, but only to eliminate vacancies existing by reason of the death,
resignation, removal or expiration of the term of one or more directors. The
directors shall be elected at the annual meeting of stockholders by such
stockholders as have the right to vote on such election. Directors need not be
stockholders of the corporation.
2.3 Enlargement of the Board. The number of directors may be increased
at any time and from time to time by the stockholders or by a majority of the
directors then in office.
2.4 Tenure. Each director shall hold office until the next annual
meeting and until his successor is elected and qualified, or until his earlier
death, resignation or removal.
2.5 Vacancies. Unless and until filled by the stockholders, any vacancy
in the Board of Directors, however occurring, including a vacancy resulting from
an enlargement of the Board, may be filled by vote of a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office, and a director chosen to fill a
position resulting from an increase in the number of directors shall hold office
until the next annual meeting of stockholders and until his successor is elected
and qualified, or until his earlier death, resignation or removal.
2.6 Resignation. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the President or
Secretary. Such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some other
event.
2.7 Regular Meetings. Regular meetings of the Board of Directors may be
held without notice at such time and place, either within or without the State
of Delaware, as shall be determined from time to time by the Board of Directors;
provided that any director who is absent when such a determination is made shall
be given notice of the determination. A regular meeting of the Board of
Directors may be held without notice immediately after and at the same place as
the annual meeting of stockholders.
2.8 Special Meetings. Special meetings of the Board of Directors may be
held at any time and place, within or without the State of Delaware, designated
in a call by the Chairman of the Board, President, two or more directors, or by
one director in the event that there is only a single director in office.
2.9 Notice of Special Meetings. Notice of any special meeting of
directors shall be given to each director by the Secretary or by the officer or
one of the directors calling the meeting. Notice shall be duly given to each
director (i) by giving notice to such director in person or by telephone at
least 48 hours in advance of the meeting, (ii) by sending a telegram or telex,
or delivering written notice by hand, to his last known business or home address
at least 48 hours in advance of the meeting, or (iii) by mailing written notice
to his last known business or home address at least 72 hours in advance of the
meeting. A notice or waiver of notice of a meeting of the Board of Directors
need not specify the purposes of the meeting.
2.10 Meetings by Telephone Conference Calls. Directors or any members
of any committee designated by the directors may participate in a meeting of the
Board of Directors or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation by such means shall constitute
presence in person at such meeting.
2.11 Quorum. A majority of the total number of the whole Board of
Directors shall constitute a quorum at all meetings of the Board of Directors.
In the event one or more of the directors shall be disqualified to vote at any
meeting, then the required quorum shall be reduced by one for each such director
so disqualified; provided, however, that in no case shall less than
one-third (1/3) of the number so fixed constitute a quorum. In the absence of a
quorum at any such meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice other than announcement at the
meeting, until a quorum shall be present.
2.12 Action at Meeting. At any meeting of the Board of Directors at
which a quorum is present, the vote of a majority of those present shall be
sufficient to take any action, unless a different vote is specified by law, the
Certificate of Incorporation or these By-Laws.
2.13 Action by Consent. Any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee of the Board of
Directors may be taken without a meeting, if all members of the Board or
committee, as the case may be, consent to the action in writing, and the written
consents are filed with the minutes of proceedings of the Board or committee.
2.14 Removal. Except as otherwise provided by the General Corporation
Law of Delaware, any one or more or all of the directors may be removed, with or
without cause, by the holders of a majority of the shares then entitled to vote
at an election of directors, except that the directors elected by the holders of
a particular class or series of stock may be removed without cause only by vote
of the holders of a majority of the outstanding shares of such class or series.
2.15 Committees. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of one or more of the directors of the corporation. The Board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of a member of a committee, the member or
members of the committee present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member. Any such committee, to the extent
provided in the resolution of the Board of Directors and subject to the
provisions of the General Corporation Law of the State of Delaware, shall have
and may exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the corporation and may authorize the
seal of the corporation to be affixed to all papers which may require it. Each
such committee shall keep minutes and make such reports as the Board of
Directors may from time to time request.
Except as the Board of Directors may otherwise determine, any committee may make
rules for the conduct of its business, but unless otherwise provided by the
directors or in such rules, its business shall be conducted as nearly as
possible in the same manner as is provided in these By-laws for the Board of
Directors.
Without limiting the generality of the foregoing, the Board of
Directors shall designate an audit committee and a compensation committee. The
audit committee shall recommend the annual appointment of the corporation's
auditors, review with such auditors the scope of the audit and non-audit
assignments and related fees, the accounting principles used by the corporation
in financial reporting, internal financial auditing procedures and the adequacy
of the corporation's internal control procedures. The compensation committee
shall administer the corporation's stock compensation plans, including the
selection of grantees and the timing of such grants, and review and monitor key
employee compensation and benefits policies and administer the corporation's
management compensation plans. The member of the Board of Directors, if any,
designated specifically by the holders of the Series D Convertible Preferred
Stock, if any, shall be a member of the audit and compensation committees.
2.16 Compensation of Directors. Directors may be paid such compensation
for their services and such reimbursement for expenses of attendance at meetings
as the Board of Directors may from time to time determine. No such payment shall
preclude any director from serving the corporation or any of its parent or
subsidiary corporations in any other capacity and receiving compensation for
such service.
ARTICLE 3 - Officers
3.1 Enumeration. The officers of the corporation shall consist of a
President, a Secretary, a Treasurer and such other officers with such other
titles as the Board of Directors shall determine, including a Chairman of the
Board, a Vice-Chairman of the Board, and one or more Vice Presidents, Assistant
Treasurers, and Assistant Secretaries. The Board of Directors may appoint such
other officers as it may deem appropriate.
3.2 Election. The President, Treasurer and Secretary shall be elected
annually by the Board of Directors at its first meeting following the annual
meeting of stockholders. Other officers may be appointed by the Board of
Directors at such meeting or at any other meeting.
3.3 Qualification. No officer need be a stockholder. Any two or more
offices may be held by the same person.
3.4 Tenure. Except as otherwise provided by law, by the Certificate of
Incorporation or by these By-laws, each officer shall hold office until his
successor is elected and qualified, unless a different term is specified in the
vote choosing or appointing him, or until his earlier death, resignation or
removal.
3.5 Resignation and Removal. Any officer may resign by delivering his
written resignation to the corporation at its principal office or to the
President or Secretary. Such resignation shall be effective upon receipt unless
it is specified to be effective at some other time or upon the happening of some
other event.
Any officer may be removed at any time, with or without cause, by vote
of a majority of the entire number of directors then in office.
Except as the Board of Directors may otherwise determine, no officer
who resigns or is removed shall have any right to any compensation as an officer
for any period following his resignation or removal, or any right to damages on
account of such removal, whether his compensation be by the month or by the year
or otherwise, unless such compensation is expressly provided in a duly
authorized written agreement with the corporation.
3.6 Vacancies. The Board of Directors may fill any vacancy occurring in
any office for any reason and may, in its discretion, leave unfilled for such
period as it may determine any offices other than those of President, Treasurer
and Secretary. Each such successor shall hold office for the unexpired term of
his predecessor and until his successor is elected and qualified, or until his
earlier death, resignation or removal.
3.7 Chairman of the Board and Vice-Chairman of the Board. The Board of
Directors may appoint a Chairman of the Board and may designate the Chairman of
the Board as Chief Executive Officer. If the Board of Directors appoints a
Chairman of the Board, he shall perform such duties and possess such powers as
are assigned to him by the Board of Directors. If the Board of Directors
appoints a Vice-Chairman of the Board, he shall, in the absence or disability of
the Chairman of the Board, perform the duties and exercise the powers of the
Chairman of the Board and shall perform such other duties and possess such other
powers as may from time to time be vested in him by the Board of Directors.
3.8 President. The President shall, subject to the direction of the
Board of Directors, have general charge and supervision of the business of the
corporation. Unless otherwise provided by the Board of Directors, he shall
preside at all meetings of the stockholders and, if he is a director, at all
meetings of the Board of Directors. Unless the Board of Directors has designated
the Chairman of the Board or another officer as Chief Executive Officer, the
President shall be the Chief Executive Officer of the corporation. The President
shall perform such other duties and shall have such other powers as the Board of
Directors may from time to time prescribe.
3.9 Vice Presidents. Any Vice President shall perform such duties and
possess such powers as the Board of Directors or the President may from time to
time prescribe. In the event of the absence, inability or refusal to act of the
President, the Vice President (or if there shall be more than one, the Vice
Presidents in the order determined by the Board of Directors) shall perform the
duties of the President and when so performing shall have all the powers of and
be subject to all the restrictions upon the President. The Board of Directors
may assign to any Vice President the title of Executive Vice President, Senior
Vice President or any other title selected by the Board of Directors.
3.10 Secretary and Assistant Secretaries. The Secretary shall perform
such duties and shall have such powers as the Board of Directors or the
President may from time to time prescribe. In addition, the Secretary shall
perform such duties and have such powers as are incident to the office of the
secretary, including without limitation the duty and power to give notices of
all meetings of stockholders and special meetings of the Board of Directors, to
attend all meetings of stockholders and the Board of Directors and keep a record
of the proceedings, to maintain a stock ledger and prepare lists of stockholders
and their addresses as required, to be custodian of corporate records and the
corporate seal and to affix and attest to the same on
documents.
Any Assistant Secretary shall perform such duties and possess such
powers as the Board of Directors, the President or the Secretary may from time
to time prescribe. In the event of the absence, inability or refusal to act of
the Secretary, the Assistant Secretary, (or if there shall be more than one, the
Assistant Secretaries in the order determined by the Board of Directors) shall
perform the duties and exercise the powers of the Secretary.
In the absence of the Secretary or any Assistant Secretary at any
meeting of stockholders or directors, the person presiding at the meeting shall
designate a temporary secretary to keep a record of the meeting.
3.11 Treasurer and Assistant Treasurers. The Treasurer shall perform
such duties and shall have such powers as may from time to time be assigned to
him by the Board of Directors or the President. In addition, the Treasurer shall
perform such duties and have such powers as are incident to the office of
treasurer, including without limitation the duty and power to keep and be
responsible for all funds and securities of the corporation, to deposit funds of
the corporation in depositories selected in accordance with these By-laws, to
disburse such funds as ordered by the Board of Directors, to make proper
accounts of such funds, and to render as required by the Board of Directors
statements of all such transactions and of the financial condition of the
corporation.
The Assistant Treasurers shall perform such duties and possess such
powers as the Board of Directors, the President or the Treasurer may from time
to time prescribe. In the event of the absence, inability or refusal to act of
the Treasurer, the Assistant Treasurer, (or if there shall be more than one, the
Assistant Treasurers in the order determined by the Board of Directors) shall
perform the duties and exercise the powers of the Treasurer.
3.12 Salaries. Officers of the corporation shall be entitled to such
salaries, compensation or reimbursement as shall be fixed or allowed from time
to time by the Board of Directors.
ARTICLE 4 - Capital Stock
4.1 Issuance of Stock. Unless otherwise voted by the
stockholders and subject to the provisions of the Certificate of Incorporation,
the whole or any part of any unissued balance of the authorized capital stock of
the corporation or the whole or any part of any unissued balance of the
authorized capital stock of the corporation held in its treasury may be issued,
sold, transferred or otherwise disposed of by vote of the Board of Directors in
such manner, for such consideration and on such terms as the Board of Directors
may determine.
4.2 Certificates of Stock. Every holder of stock of the corporation
shall be entitled to have a certificate, in such form as may be prescribed by
law and by the Board of Directors, certifying the number and class of shares
owned by him in the corporation. Each such certificate shall be signed by, or in
the name of the corporation by, the Chairman or Vice-Chairman, if any, of the
Board of Directors, or the President or a Vice President, and the Treasurer or
an Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation. Any or all of the signatures on the certificate may be a facsimile.
Each certificate for shares of stock which are subject to any
restriction on transfer pursuant to the Certificate of Incorporation, the
By-laws, applicable securities laws or any agreement among any number of
shareholders or among such holders and the corporation shall have conspicuously
noted on the face or back of the certificate either the full text of the
restriction or a statement of the existence of such restriction.
If the corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of each certificate representing shares of such
class or series of stock, provided that in lieu of the foregoing requirements
there may be set forth on the face or back of each certificate representing
shares of such class or series of stock a statement that the corporation will
furnish without charge to each stockholder who so requests a copy of the full
text of the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights.
4.3 Transfers. Except as otherwise established by rules and regulations
adopted by the Board of Directors, and subject to applicable law, shares of
stock may be transferred on the books of the corporation by the surrender to the
corporation or its transfer agent of the certificate representing such shares
properly endorsed or accompanied by a written assignment or power of attorney
properly executed, and with such proof of authority or the authenticity of
signature as the corporation or its transfer agent may reasonably require.
Except as may be otherwise required by law, by the Certificate of Incorporation
or by these By-laws, the corporation shall be entitled to treat the record
holder of stock as shown on its books as the owner of such stock for all
purposes, including the payment of dividends and the right to vote with respect
to such stock, regardless of any transfer, pledge or other disposition of such
stock until the shares have been transferred on the books of the corporation in
accordance with the requirements of these By-laws.
4.4 Lost, Stolen or Destroyed Certificates. The corporation may issue a
new certificate of stock in place of any previously issued certificate alleged
to have been lost, stolen, or destroyed, upon such terms and conditions as the
Board of Directors may prescribe, including the presentation of reasonable
evidence of such loss, theft or destruction and the giving of such indemnity as
the Board of Directors may require for the protection of the corporation or any
transfer agent or registrar.
4.5 Record Date. The Board of Directors may fix in advance a date as a
record date for the determination of the stockholders entitled to notice of or
to vote at any meeting of stockholders or to express consent (or dissent) to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action. Such record date shall not be more than 60 nor less than 10 days before
the date of such meeting, nor more than 10 days after the date of adoption of a
record date for a written consent without a meeting, nor more than 60 days prior
to any other action to which such record date relates.
If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day before the day on which notice is given,
or, if notice is waived, at the close of business on the day before the day on
which the meeting is held. The record date for determining stockholders entitled
to express consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors is
necessary, shall be the day on which the first written consent is properly
delivered to the corporation. The record date for determining stockholders for
any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating to such purpose.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
ARTICLE 5 - General Provisions
5.1 Fiscal Year. Except as from time to time otherwise designated by
the Board of Directors, the fiscal year of the corporation shall begin on the
first day of May in each year and end on the last day of April in each year.
5.2 Corporate Seal. The corporate seal shall be in such form as shall
be approved by the Board of Directors.
5.3 Waiver of Notice. Whenever any notice whatsoever is required to be
given by law, by the Certificate of Incorporation or by these By-laws, a waiver
of such notice either in writing signed by the person entitled to such notice or
such person's duly authorized attorney, or by telegraph, cable or any other
available method, whether before, at or after the time stated in such waiver, or
the appearance of such person or persons at such meeting in person or by proxy,
shall be deemed equivalent to such notice.
5.4 Voting of Securities. Except as the directors may otherwise
designate, the President or Treasurer may waive notice of, and act as, or
appoint any person or persons to act as, proxy or attorney-in-fact for this
corporation (with or without power of substitution) at, any meeting of
stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
5.5 Evidence of Authority. A certificate by the Secretary, or an
Assistant Secretary, or a temporary Secretary,
as to any action taken by the stockholders, directors, a committee or any
officer or representative of the corporation shall as to all persons who rely on
the certificate in good faith be conclusive evidence of such action.
5.6 Certificate of Incorporation. All references in these By-laws to
the Certificate of Incorporation shall be deemed to refer to the Certificate of
Incorporation of the corporation, as amended and in effect from time to time.
5.7 Transactions with Interested Parties. No contract or transaction
between the corporation and one or more of the directors or officers, or between
the corporation and any other corporation, partnership, association, or other
organization in which one or more of the directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or a committee of the
Board of Directors which authorizes the contract or transaction or solely
because his or their votes are counted for such purpose, if:
(1) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the Board of
Directors or the committee, and the Board or committee in good faith
authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum;
(2) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction
is specifically approved in good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the corporation as of
the time it is authorized, approved or ratified, by the Board of
Directors, a committee of the Board of Directors, or the stockholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
5.8 Severability. Any determination that any provision of these By-laws
is for any reason inapplicable, illegal or ineffective shall not affect or
invalidate any other provision of these By-laws.
5.9 Pronouns. All pronouns used in these By-laws shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person or persons may require.
ARTICLE 6 - Amendments
6.1 By the Board of Directors. These By-laws may be altered, amended or
repealed or new by-laws may be adopted by the affirmative vote of a majority of
the directors present at any regular or special meeting of the Board of
Directors at which a quorum is present (provided that the second paragraph of
Section 2.15 may only be altered, amended or repealed pursuant to this Section
6.1 if the directors so voting in the affirmative include the director, if any,
designated by the holders of the Series D Preferred Stock of the Company).
6.2 By the Stockholders. These By-laws may be altered, amended or
repealed or new by-laws may be adopted by the affirmative vote of the holders of
a majority of the shares of the capital stock of the corporation issued and
outstanding and entitled to vote at any regular meeting of stockholders, or at
any special meeting of stockholders, provided notice of such alteration,
amendment, repeal or adoption of new by-laws shall have been stated in the
notice of such special meeting (and provided that the second paragraph of
Section 2.15 may only be altered, amended or repealed pursuant to this Section
6.2 if the stockholders so voting in the affirmative include the holders of a
majority of the then outstanding Series D Preferred Stock of the Company).
Adopted by the Board of Directors on
December 15, 1995;
Approved by the Stockholders on
December 15, 1995.
These By-laws amend and restate and
supersede in their entirety all
previous versions of the By-laws of
Casella Waste Systems, Inc.
============================================================================
INCENTIVE STOCK OPTION PLAN
============================================================================
TABLE OF CONTENTS
-----------------
1. Purpose.................................................................1
2. Administration..........................................................1
3. Stock...................................................................2
4. Eligibility.............................................................2
5. Terms of the Option Agreement...........................................3
6. Method of Exercise, Payment of Purchase Price...........................5
7. Use of Proceeds from Stock..............................................5
8. Adjustment Upon Changes in Capitalization...............................6
9. Termination of Employment or Service....................................6
10.Amendment of Option Plan................................................7
11.Termination or Suspension of Option Plan................................8
12.Nonexclusivity of the Plan..............................................8
13.Government and other Regulations........................................8
14.Effective Date of Option Plan...........................................9
CASELLA WASTE SYSTEMS, INC.
INCENTIVE STOCK OPTION PLAN
---------------------------
1. Purpose
-------
This Stock Option Plan (the "Option Plan") is intended as a performance
incentive and to encourage stock ownership by officers and other key employees
of CASELLA WASTE SYSTEMS, INC. (the "Company") or of other corporations in which
stock possessing 50 percent or more of the total combined voting power is owned
by the Company (the "Subsidiaries"), so that the person to whom the option is
granted (the "Optionee") may acquire or increase his or her proprietary interest
in the success of the Company, and to encourage the Optionee to remain in the
employ or service of the Company or its Subsidiaries. It is intended that
options granted under the Option Plan will qualify as incentive stock options
(the "Incentive Options"), as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
2. Administration
--------------
(a) The Option Plan shall be administered by a committee of not less than
three directors of the Company none of whom is an officer or other salaried
employee of the Company who shall participate in this Option Plan. The members
of this committee (the "Option Committee") shall be appointed by the Board of
Directors. A majority vote of the members of the Option Committee shall be
required for all its actions.
(b) The Option Committee shall have the power, subject to, and within the
limits of, the express provisions of the Option Plan:
(i) To determine from time to time which of the eligible persons
(other than members of the Option Committee) shall be granted
options under the Option Plan, and the time or times when, and the
number of shares for which, an option or options shall be granted
to such persons;
(ii) To prescribe the other terms and provisions (which need not be
identical) of each option granted under the Option Plan to
eligible persons (other than members of the Option Committee);
(iii) To construe and interpret the Option Plan and options granted
under it, and to establish, amend, and revoke rules and
regulations for administration. The Option Committee, in the
-1-
exercise of this power, may correct any defect or supply any
omission, or reconcile any inconsistency in the Option Plan, or in
any option agreement, in the manner and to the extent it shall
deem necessary or expedient to make the Option Plan fully
effective. In exercising this power, the Option Committee may
retain counsel at the expense of the Company. All decisions and
determinations by the Option Committee in exercising this power
shall be final and binding upon the Company and the Optionee;
(iv) To determine the duration and purposes of leaves of absence which
may be granted to an Optionee (other than a member of the Option
Committee) without constituting a termination of his or her
employment or service for the purposes of the Option Plan; and
(v) Generally, to exercise such powers and to perform such acts as are
deemed necessary or expedient to promote the best interest of the
Company with respect to the Option Plan.
(c) The Board of Directors (with members of the Option Committee not voting)
shall administer the Option Plan with respect to options granted to members of
the Option Committee in accordance with the provisions of Section 4(c).
3. Stock
-----
(a) The stock subject to the options shall be shares of the Company's
authorized by unissued Class A Common Stock, par value $0.01 per share (the
"Common Stock"). The number of shares for which options may be granted,
excluding the shares involved in the unexercised portion of any canceled,
terminated or expired options, shall not exceed an aggregate of 300,000 shares
of Common Stock. Such number shall be subject to adjustment as provided in
Section 8 hereof.
(b) Whenever any outstanding option under the Option Plan expires, is
canceled or is otherwise terminated, the shares of Common Stock allocable to the
unexercised portion of such option may again be subjected to options under the
Option Plan.
4. Eligibility
-----------
(a) The persons who shall be eligible to receive options shall be officers,
key employees of the Company or its Subsidiaries. It is intended that the Option
Plan be used as an incentive for those officers and other key employees
responsible for the decision making, policy formation and personnel supervision
which most directly affect the earnings of the Company and the welfare of its
stockholders. The Option
-2-
Committee may from time to time grant options to one or more eligible persons
(other than members of the Option Committee). The Board of Directors (with
members of the Option Committee not voting) may from time to time grant options
to one or more members of the Option Committee. An optionee may hold more than
one option.
(b) No person shall be granted any Incentive Option if, at the time of the
grant, such person owns, directly or indirectly, more than ten percent of the
total combined voting power or value of the Company or of its Subsidiaries
unless the option price is at least 110 percent of the fair market value of the
Common Stock and the exercise period of such Incentive Option is by its terms
limited to five years.
(c) The total number of shares of Common Stock which may be granted under
the Option Plan to all eligible persons, not employed on a full-time salaried
basis by the Company or its Subsidiaries, shall not in the aggregate exceed nine
percent of the shares of Common Stock covered by the Option Plan. The maximum
number of shares of Common Stock for which options may be granted to any
employee-director shall not exceed 50 percent of the shares of Common Stock
covered by the Option Plan.
5. Terms of the Option Agreement
-----------------------------
Each option agreement shall contain such provisions as the Option Committee
(or the Board of Directors with respect to members of the Option Committee)
shall from time to time deem appropriate. Option agreements need not be
identical, but each option agreement by appropriate language shall include the
substance of all of the following provisions:
(a) Any option shall expire on the date specified in the option agreement,
which date shall not be later than the tenth anniversary of the date on
which the option was granted. All options must be granted by the tenth
anniversary of the effective date of the Option Plan.
(b) The minimum number of shares with respect to which an option may be
exercised at any one time shall be 100 shares, unless the number
purchased is the total number at the time available for purchase under
the option.
(c) Each option shall be exercisable in such installments (which need not be
equal) and at such times as designated by the Option Committee (or the
Board of Directors with respect to the Option Committee). To the extent
not exercised, installments shall accumulate and be exercisable, in
whole or in part, at any time after becoming exercisable, but not later
than the date the option expires. Unless otherwise designated, no option
shall be
-3-
exercisable within one year of the date on which the option was granted
except in the event of a change in control or threatened change in
control (as defined in Section 5(h) hereof) of the Company. In such
event, all options granted prior to such change in control or threatened
change in control shall become immediately exercisable.
(d) The purchase price per share of Common Stock under each option shall be
not less than the fair market value of the Common Stock subject to the
option on the date the option is granted. For this purpose, the fair
market value of the Common Stock shall be determined by the Option
Committee (or by the Board of Directors with respect to members of the
Option Committee); provided, however, the (i) if the Common Stock is
admitted to quotation on the National Association of Securities Dealers
Automated Quotation System on the date the option is granted, fair
market value shall not be less than the average of the highest bid and
the lowest asked prices of the Common Stock on such System on such date,
or (ii) if the Common Stock is admitted to trading on a national
securities exchange on the date the option is granted, fair market value
shall not be less than the last sale price reported for the Common Stock
on such exchange on such date or on the last date preceding such date on
which a sale was reported.
(e) The Optionee shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock
subject to such option unless and until the option shall have been
exercised pursuant to the terms thereof, the Company shall have issued
and delivered the shares to the Optionee, and the Optionee's name shall
have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such shares of Common Stock.
(f) Except as provided in Section 9 hereof:
(i) All options granted pursuant to the Option Plan shall not be
transferable except by will or the laws of descent and
distribution, and shall be exercisable during the Optionee's
lifetime only by the Optionee; and
(ii) No assignment or transfer of the option, or of the rights
represented thereby, whether voluntary or involuntary, by
operation of law or otherwise, shall vest in the assignee or
transferee any interest or right in the option whatsoever, but
-4-
immediately upon any attempt to assign or transfer the option the
same shall terminate and be of no force or effect.
(g) The option shall be subject to any provision necessary to assure
compliance with the federal and state securities laws.
(h) For purposes of the Option Plan, the term "change in control" shall be
deemed to have taken place if (i) a third person, including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
becomes the beneficial owner of shares of the Company having 30% or more
of the total number of votes that may be cast for the election of
directors of the Company; or (ii) as the result of, or in connection
with, any cash tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any combination of
the foregoing transactions, the persons who were directors of the
Company before such transaction shall cease to constitute a majority of
the Board of Directors of the Company or any successor Company.
(i) No person granted Incentive Options may exercise them for the first time
in any one year covering Common Stock having an aggregate fair market
value in excess of $100,000 at the date of the grant of the Incentive
Option.
6. Method of Exercise, Payment of Purchase Price
---------------------------------------------
(a) An option may be exercised by the Optionee delivering to the Option
Committee (or the Board of Directors with respect to members of the Optionee
Committee) on any business day a written notice specifying the number of shares
of Common Stock the Optionee then desires to purchase (the "Notice").
(b) Payment for the shares of Common Stock purchased pursuant to the
exercise of an option shall be in either (i) cash equal to the option price for
the number of shares specified in the Notice (the "Total Option price"), or (ii)
in the discretion of the Option Committee (or the Board of Directors with
respect to members of the Option Committee) shares of Common Stock of the Bank
with a fair market value, determined as provided in Section 5 hereof, equal to
or less than the Total Option Price, plus cash, for an amount equal to the
amount, if any, by which the Total Option Price exceeds the fair market value of
the Common Stock.
7. Use of Proceeds from Stock
--------------------------
Proceeds from the sale of Common Stock pursuant to options granted under the
Option Plan shall constitute general funds of the Company.
-5-
8. Adjustment Upon Changes in Capitalization
-----------------------------------------
(a) If the shares of the Company's Common Stock as a whole are increased,
decreased or changed into, or exchanged for, a different number or kind of
shares or securities of the Company, whether through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate structure or the
like, an appropriate and proportionate adjustment shall be made in the number
and kinds of share subject to the Option Plan, and in the number, kinds, and per
share exercise price of shares subject to unexercised options or portions
thereof granted prior to any such change. Any such adjustment in an outstanding
option, however, shall be made without a change in the total price applicable to
the unexercised portion of the option but with a corresponding adjustment in the
price for each share of Common Stock covered by the option.
(b) Upon dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation in which the Company is not the
surviving corporation, or upon the sale of substantially all of the property of
the Company to another corporation, the Option Plan and the options issued
thereunder shall terminate, unless provision is made in connection with such
transaction for the assumption of options theretofore granted, or the
substitution for such options of new options of the successor employer
corporation or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kinds of shares and the per share exercise prices. In the
event of such termination, all outstanding options shall be exercisable in full
for at least 30 days prior to the termination date whether or not exercisable
during such period.
(c) Adjustments under this Section shall be made by the Option Committee,
whose determination as to what adjustments shall be made, and the extent
thereof, shall be conclusive. The Option Committee shall have the discretion and
power in any such event to determine and to make effective provision for the
acceleration of the time during which the option may be exercised,
notwithstanding the provisions of the option setting forth the date or dates of
which all or any part of it may be exercised. No fractional shares of Common
Stock shall be issued under the option Plan on account of any adjustment
specified above.
9. Termination of Employment or Service
------------------------------------
(a) In the event of the death of an Optionee while in the employ or service
of the Company or its Subsidiaries, the option, whether or not exercisable at
the time of the death of the Optionee, may be exercised, as provided in Section
6 hereof, by the estate of the Optionee or by a person who acquired the right to
exercise such option by bequest or inheritance from such Optionee, within one
year after the date
-6-
of such death but not later than the date on which the option would otherwise
expire.
(b) If the employment or service of an Optionee is terminated by reason of
disability as defined in ss. 105(d)(4) of the Code, the options held by such
Optionee may be exercised, whether or not exercisable at the time of such
termination, within one year after such termination but not later than the date
on which the options would otherwise expire.
(c) If the employment or service of an Optionee is terminated for any reason
other than such death or disability, options held by such Optionee shall, to the
extent not theretofore exercised, be canceled upon such termination and shall
not thereafter be exercisable; provided, however, that an Optionee whose
employment is terminated by retirement in accordance with the Company's normal
retirement policies, as determined by the Option Committee, shall be permitted
to exercise Incentive Options, whether or not exercisable at the time of such
termination, within three months after the date of such termination, but not
later than the date on which the Incentive Option would otherwise expire, and
shall be permitted to exercise any options which are not Incentive Options not
later than the date on which options would otherwise expire; and, provided
further, that an Optionee whose employment or service is voluntary or
involuntarily terminated within six months after a change in control of the
Company, as defined in Section 5(c) hereof, shall be permitted to exercise
options, whether or not exercisable at the time of such termination, within
three months after the date of such termination but not later than the date on
which the options would otherwise expire.
10. Amendment of Option Plan
------------------------
The Board of Directors at any time, and from time to time, may amend the
Option Plan, subject to any required regulatory approval and to the limitation
that, except as provided in Section 8 hereof, no amendment shall be effective
unless approved by the affirmative vote of a majority of the outstanding shares
of the Company at an annual or special meeting held within twelve months before
or after the date of such amendment's adoption, where such amendment will:
(a) Increase the number of shares of Common Stock as to which options may be
granted under the Option Plan;
(b) Change in substance Section 4 hereof relating to eligibility to
participate in the Option Plan;
(c) Change the minimum option price; or
(d) Increase the maximum term of options provided herein.
-7-
Except as provided in Section 8 hereof, rights and obligations under any
option granted before amendment of the Option Plan shall not be altered or
impaired by amendment of the Option Plan, except with the consent of the person
to whom the option was granted.
11. Termination or Suspension of Option Plan
----------------------------------------
The Board of Directors at any time may terminate or suspend the Option Plan.
Unless sooner terminated, the Option Plan shall terminate on the tenth
anniversary of the effective date specified in Section 14 hereof, but such
termination shall not affect any option theretofore granted. An option may not
be granted while the Option Plan is suspended or after it is terminated.
Rights and obligations under any option granted while the Option Plan is in
effect shall not be altered nor impaired by suspension or termination of the
Option Plan except with the consent of the Optionee. An option may be terminated
by agreement between an Optionee and the Company and, in lieu of the terminated
option, a new option may be granted with an exercise period which may be higher
or lower than the exercise price of the terminated option.
12. Nonexclusivity of the Plan
--------------------------
Neither the adoption of the Option Plan by the Board of Directors nor the
submission of the Plan to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board of Directors to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options otherwise than under the
Option Plan, and such arrangements may be either applicable generally or only in
specific cases.
13. Government and other Regulations
--------------------------------
(a) The obligations of the Company to sell and deliver shares of Common
Stock under options granted under the Option Plan shall be subject to all
applicable laws, rules and regulations and the obtaining of all such approvals
by governmental agencies as may be deemed necessary or appropriate by the Board
of Directors of the Company.
(b) The Option Plan is intended to comply with Rule 16b-3 under the
Securities Act of 1934. Any provision inconsistent with such Rule shall be
inoperative and shall not affect the validity of the Option Plan.
-8-
14. Effective Date of Option Plan
-----------------------------
This Option Plan shall become effective with its approval by a majority of
the Company's stockholders.
APPROVED: July 26, 1993
-9-
CASELLA WASTE SYSTEMS, INC.
=============================================================================
NONSTATUTORY STOCK OPTION PLAN
=============================================================================
Adopted: May 18, 1994
TABLE OF CONTENTS
-----------------
1. Purpose..................................................................1
2. Administration...........................................................1
3. Stock....................................................................2
4. Eligibility..............................................................2
5. Terms of the Option Agreement............................................3
6. Method of Exercise, Payment of Purchase Price............................5
7. Use of Proceeds from Stock...............................................5
8. Adjustment Upon Changes in Capitalization................................5
9. Termination of Employment or Service.....................................6
10.Amendment of Option Plan.................................................7
11.Termination or Suspension of Option Plan.................................7
12.Nonexclusivity of the Plan...............................................7
13.Government and other Regulations.........................................8
14.Effective Date of Option Plan............................................8
CASELLA WASTE SYSTEMS, INC.
NONSTATUTORY STOCK OPTION PLAN
------------------------------
1. Purpose
-------
This Nonstatutory Stock Option Plan (the "Option Plan") is intended as a
performance incentive and to encourage stock ownership by officers and other key
employees of CASELLA WASTE SYSTEMS, INC. (the "Company") or of other
corporations in which stock possessing 50 percent or more of the total combined
voting power is owned by the Company (the "Subsidiaries"), so that the person to
whom the option is granted (the "Optionee") may acquire or increase his or her
proprietary interest in the success of the Company, and to encourage the
Optionee to remain in the employ or service of the Company or its Subsidiaries.
It is intended that options granted under the Option Plan will qualify as
nonstatutory stock options (the "Options"), which are subject to taxation under
Section 83 of the Internal Revenue Code of 1986, as amended (the "Code").
2. Administration
--------------
(a) The Option Plan shall be administered by the Board of Directors or by a
committee of not less than three directors of the Company none of whom is an
officer or other salaried employee of the Company who shall participate in this
Option Plan. The members of this committee (the "Option Committee") shall be
appointed by the Board of Directors. A majority vote of the members of the
Option Committee shall be required for all its actions.
(b) The Board and/or the Option Committee shall have the power, subject to,
and within the limits of, the express provisions of the Option Plan:
(i) To determine from time to time which of the eligible persons shall
be granted options under the Option Plan, and the time or times
when, and the number of shares for which, an option or options
shall be granted to such persons;
(ii) To prescribe the other terms and provisions (which need not be
identical) of each option granted under the Option Plan to
eligible persons;
(iii) To construe and interpret the Option Plan and options granted
under it, and to establish, amend, and revoke rules and
regulations for administration. The Board of Directors and/or the
Option Committee, in the exercise of this power, may correct any
-1-
defect or supply any omission, or reconcile any inconsistency in
the Option Plan, or in any option agreement, in the manner and to
the extent it shall deem necessary or expedient to make the Option
Plan fully effective. In exercising this power, the Board of
Directors and/or the Option Committee may retain counsel at the
expense of the Company. All decisions and determinations by the
Board of Directors and/or the Option Committee in exercising this
power shall be final and binding upon the Company and the
Optionee;
(iv) To determine the duration and purposes of leaves of absence which
may be granted to an Optionee without constituting a termination
of his or her employment or service for the purposes of the Option
Plan; and
(v) Generally, to exercise such powers and to perform such acts as are
deemed necessary or expedient to promote the best interest of the
Company with respect to the Option Plan.
(c) The Board of Directors (with members of the Option Committee not
voting) shall administer the Option Plan with respect to options granted to
members of the Option Committee.
3. Stock
-----
(a) The stock subject to the options shall be shares of the Company's
authorized but unissued Class A Common Stock, par value $0.01 per share (the
"Common Stock"). The number of shares for which options may be granted,
excluding the shares involved in the unexercised portion of any canceled,
terminated or expired options, shall not exceed an aggregate of 150,000 shares
of Common Stock. Such number shall be subject to adjustment as provided in
Section 8 hereof.
(b) Whenever any outstanding option under the Option Plan expires, is
canceled or is otherwise terminated, the shares of Common Stock allocable to the
unexercised portion of such option may again be subjected to options under the
Option Plan.
4. Eligibility
-----------
(a) The persons who shall be eligible to receive options shall be officers,
key employees of the Company or its Subsidiaries. It is intended that the Option
Plan be used as an incentive for those officers and other key employees
responsible for the decision making, policy formation and personnel supervision
which most directly affect the earnings of the Company and the welfare of its
stockholders. The Option
-2-
Committee may from time to time grant options to one or more eligible persons
(other than members of the Option Committee). The Board of Directors (with
members of the Option Committee not voting) may from time to time grant options
to one or more members of the Option Committee. An optionee may hold more than
one option.
5. Terms of the Option Agreement
-----------------------------
Each option agreement shall contain such provisions as the Board of
Directors and/or the Option Committee (or the Board of Directors with respect to
members of the Option Committee) shall from time to time deem appropriate.
Option agreements need not be identical, but each option agreement by
appropriate language shall include the substance of all of the following
provisions:
(a) Any option shall expire on the date specified in the option agreement,
which date shall not be later than the tenth anniversary of the date on
which the option was granted. All options must be granted by the tenth
anniversary of the effective date of the Option Plan.
(b) The minimum number of shares with respect to which an option may be
exercised at any one time shall be 100 shares, unless the number
purchased is the total number at the time available for purchase under
the option.
(c) Each option shall be exercisable in such installments (which need not be
equal) and at such times as designated by the Board of Directors and/or
the Option Committee (or the Board of Directors with respect to the
Option Committee). To the extent not exercised, installments shall
accumulate and be exercisable, in whole or in part, at any time after
becoming exercisable, but not later than the date the option expires.
Unless otherwise designated, no option shall be exercisable within one
year of the date on which the option was granted except in the event of
a change in control or threatened change in control (as defined in
Section 5(h) hereof) of the Company. In such event, all options granted
prior to such change in control or threatened change in control shall
become immediately exercisable.
(d) The purchase price per share of Common Stock under each option shall be
not less than the fair market value of the Common Stock subject to the
option on the date the option is granted. For this purposes, the fair
market value of the Common Stock shall be determined by the Board of
Directors and/or the Option Committee (or by the Board of Directors with
respect to members of the Option Committee); provided, however, that (i)
if the Common Stock is admitted to quotation on the National
-3-
Association of Securities Dealers Automated Quotation System on the date
the option is granted, fair market value shall not be less than the
average of the highest bid and the lowest asked prices of the Common
Stock on such System on such date, or (ii) if the Common Stock is
admitted to trading on a national securities exchange on the date the
option is granted, fair market value shall not be less than the last
sale price reported for the Common Stock on such exchange on such date
or on the last date preceding such date on which a sale was reported.
(e) The Optionee shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock
subject to such option unless and until the option shall have been
exercised pursuant to the terms thereof, the Company shall have issued
and delivered the shares to the Optionee, and the Optionee's name shall
have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such shares of Common Stock.
(f) Except as provided in Section 9 hereof:
(i) All options granted pursuant to the Option Plan shall not be
transferable except by will or the laws of descent and
distribution, and shall be exercisable during the Optionee's
lifetime only by the Optionee; and
(ii) No assignment or transfer of the option, or of the rights
represented thereby, whether voluntary or involuntary, by
operation of law or otherwise, shall vest in the assignee or
transferee any interest or right in the option whatsoever, but
immediately upon any attempt to assign or transfer the option the
same shall terminate and be of no force or effect.
(g) The option shall be subject to any provision necessary to assure
compliance with the federal and state securities laws.
(h) For purposes of the Option Plan, the term "change in control" shall be
deemed to have taken place if (i) a third person, including a "group" as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the
beneficial owner of shares of the Company having 30% or more of the total number
of votes that may be cast for the election of directors of the Company; or (ii)
as the result of, or in connection with, any cash tender or exchange offer,
merger or other business combination, sale of assets or contested election, or
any combination of the foregoing transactions, the persons who were directors of
the Company before such transaction
-4-
shall cease to constitute a majority of the Board of Directors of the Company or
any successor Company.
6. Method of Exercise, Payment of Purchase Price
---------------------------------------------
(a) An option may be exercised by the Optionee delivering to the Board of
Directors and/or the Option Committee (or the Board of Directors with respect to
members of the Optionee Committee), or their designee, on any business day a
written notice specifying the number of shares of Common Stock the Optionee then
desires to purchase (the "Notice").
(b) Payment for the shares of Common Stock purchased pursuant to the
exercise of an option shall be in either (i) cash equal to the option price for
the number of shares specified in the Notice (the "Total Option Price"), or (ii)
in the discretion of the Board of Directors and/or the Option Committee (or the
Board of Directors with respect to members of the Option Committee) previously
owned shares of Common Stock of the Company with a fair market value, determined
as provided in Section 5 hereof, equal to or less than the Total Option Price,
plus cash, for an amount equal to the amount, if any, by which the Total Option
Price exceeds the fair market value of the Common Stock.
7. Use of Proceeds from Stock
--------------------------
Proceeds from the sale of Common Stock pursuant to options granted
under the Option Plan shall constitute general funds of the Company.
8. Adjustment Upon Changes in Capitalization
-----------------------------------------
(a) If the shares of the Company's Common Stock as a whole are increased,
decreased or changed into, or exchanged for, a different number or kind of
shares or securities of the Company, whether through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate structure or the
like, an appropriate and proportionate adjustment shall be made in the number
and kinds of share subject to the Option Plan, and in the number, kinds, and per
share exercise price of shares subject to unexercised options or portions
thereof granted prior to any such change. Any such adjustment in an outstanding
option, however, shall be made without a change in the total price applicable to
the unexercised portion of the option but with a corresponding adjustment in the
price for each share of Common Stock covered by the option.
(b) Upon dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation in which the Company is not the
surviving corporation, or upon the sale of substantially all of the property of
the Company to
-5-
another corporation, the Option Plan and the options issued thereunder shall
terminate, unless provision is made in connection with such transaction for the
assumption of options theretofore granted, or the substitution for such options
of new options of the successor employer corporation or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kinds of shares and
the per share exercise prices. In the event of such termination, all outstanding
options shall be exercisable in full for at least 30 days prior to the
termination date whether or not exercisable during such period.
(c) Adjustments under this Section shall be made by the Board of Directors
and/or the Option Committee, whose determination as to what adjustments shall be
made, and the extent thereof, shall be conclusive. The Board of Directors and/or
the Option Committee shall have the discretion and power in any such event to
determine and to make effective provision for the acceleration of the time
during which the option may be exercised, notwithstanding the provisions of the
option setting forth the date or dates of which all or any part of it may be
exercised. No fractional shares of Common Stock shall be issued under the Option
Plan on account of any adjustment specified above.
9. Termination of Employment or Service
------------------------------------
(a) In the event of the death of an Optionee while in the employ or service
of the Company or its Subsidiaries, the option, whether or not exercisable at
the time of the death of the Optionee, may be exercised, as provided in Section
6 hereof, by the estate of the Optionee or by a person who acquired the right to
exercise such option by bequest or inheritance from such Optionee, within one
year after the date of such death but not later than the date on which the
option would otherwise expire.
(b) If the employment or service of an Optionee is terminated by reason of
disability as defined in ss. 105(d)(4)) of the Code, the options held by such
Optionee may be exercised, whether or not exercisable at the time of such
termination, within one year after such termination but not later than the date
on which the options would otherwise expire.
(c) If the employment or service of an Optionee is terminated for any reason
other than such death or disability, options held by such Optionee shall, to the
extent not theretofore exercised, be canceled upon such termination and shall
not thereafter be exercisable; provided, however, that an Optionee whose
employment is terminated by retirement in accordance with the Company's normal
retirement policies, as determined by the Option Committee, shall be permitted
to exercise Options, whether or not exercisable at the time of such termination,
within three months after the date of such termination, but not later than the
date on which the Option would otherwise expire, and shall be permitted to
exercise any options which
-6-
are not Options not later than the date on which options would otherwise expire;
and, provided further, that an Optionee whose employment or service is voluntary
or involuntarily terminated within six months after a change in control of the
Company, as defined in Section 5(h) hereof, shall be permitted to exercise
options, whether or not exercisable at the time of such termination, within
three months after the date of such termination but not later than the date on
which the options would otherwise expire.
10. Amendment of Option Plan
------------------------
The Board of Directors at any time, and from time to time, may amend the
Option Plan, subject to any required regulatory approval.
Except as provided in Section 8 hereof, rights and obligations under
any option granted before amendment of the Option Plan shall not be altered or
impaired by amendment of the Option Plan, except with the consent of the person
to whom the option was granted.
11. Termination or Suspension of Option Plan
----------------------------------------
The Board of Directors at any time may terminate or suspend the Option Plan.
Unless sooner terminated, the Option Plan shall terminate on the tenth
anniversary of the effective date specified in Section 14 hereof, but such
termination shall not affect any option theretofore granted. An option may not
be granted while the Option Plan is suspended or after it is terminated.
Rights and obligations under any option granted while the Option Plan is in
effect shall not be altered nor impaired by suspension or termination of the
Option Plan except with the consent of the Optionee. An option may be terminated
by agreement between an Optionee and the Company and, in lieu of the terminated
option, a new option may be granted with an exercise period which may be higher
or lower than the exercise price of the terminated option.
12. Nonexclusivity of the Plan
--------------------------
The adoption of the Option Plan by the Board of Directors shall not be
construed as creating any limitations on the power of the Board of Directors to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options otherwise than under the
Option Plan, and such arrangements may be either applicable generally or only in
specific cases.
-7-
13. Government and other Regulations
--------------------------------
(a) The obligations of the Company to sell and deliver shares of Common
Stock under options granted under the Option Plan shall be subject to all
applicable laws, rules and regulations and the obtaining of all such approvals
by governmental agencies as may be deemed necessary or appropriate by the Board
of Directors of the Company.
(b) The Option Plan is intended to comply with Rule 16b-3 under the
Securities Act of 1934. Any provision inconsistent with such Rule shall be
inoperative and shall not affect the validity of the Option Plan.
14. Effective Date of Option Plan
-----------------------------
This Option Plan shall become effective May 18, 1994.
-8-
CASELLA WASTE SYSTEMS, INC.
1996 STOCK OPTION PLAN
Adopted by the Board of Directors on May 1, 1996
------------------------------------------------
1. Purpose.
--------
The purpose of this plan (the "Plan") is to secure for Casella Waste
Systems, Inc. (the "company") and its shareholders the benefits arising from
capital stock ownership by employees, officers and directors of, and consultants
or advisors to, the Company and its parent and subsidiary corporations who are
expected to contribute to the Company's future growth and success. Except where
the context otherwise requires, the term "Company" shall include the parent and
all present and future subsidiaries of the Company as defined in Sections 424(e)
and 424(f) of the Internal Revenue Code of 1986, as amended or replaced from
time to time (the "Code"). Those provisions of the Plan which make express
reference to Section 422 shall apply only to Incentive Stock Options (as that
term is defined in the Plan).
2. Type of Options and Administration.
-----------------------------------
(a) Types of Options. Options granted pursuant to the Plan may be either
incentive stock options ("Incentive Stock Options") meeting the requirements of
Section 422 of the Code or Non-Statutory Options which are not intended to meet
the requirements of Section 422 of the Code ("Non-Statutory Options").
(b) Administration.
---------------
(i) The Plan will be administered by the Board of Directors of the
Company, whose construction and interpretation of the terms and provisions of
the Plan shall be final and conclusive. The Board of Directors may in its sole
discretion grant options to purchase shares of the Company's Class A Common
Stock (hereinafter referred to as "Common Stock") and issue shares upon exercise
of such options as provided in the Plan. The Board shall have authority, subject
to the express provisions of the Plan, to construe the respective option
agreements and the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of the respective
option agreements, which need not be identical, and to make all other
determinations which are, in the judgment of the Board of Directors, necessary
or desirable for the administration of the Plan. The Board of Directors may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or in any option agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect and it shall be the sole and final judge
of such expediency. No director or person acting pursuant to authority delegated
by the Board of Directors shall be liable for any action or determination under
the Plan made in good faith.
(ii) The Board of Directors may, to the full extent permitted by or
consistent with applicable laws or regulations and Section 3(b) of this Plan
delegate any or all of its powers under the Plan to a committee (the
"Committee") appointed by the Board of Directors, and if the Committee is so
appointed all references to the Board of Directors in the Plan shall mean and
relate to such Committee.
(c) Applicability of Rule 16b-3. Those provisions of the Plan which make
express reference to Rule 16b-3 promulgated under the Securities Exchange Act of
1934 (the "Exchange Act"), or any successor rule ("Rule 16b-3"), or which are
required in order for certain option transactions to qualify for exemption under
Rule 16b-3, shall apply only to such persons as are required to file reports
under Section 16(a) of the Exchange Act (a "Reporting Person").
3. Eligibility.
------------
(a) General. Options may be granted to persons who are, at the time of
grant, employees, officers or directors of, or consultants or advisors to, the
Company; provided, that the class of employees to whom Incentive Stock Options
may be granted shall be limited to all employees of the Company. A person who
has been granted an option may, if he or she is otherwise eligible, be granted
additional options if the Board of Directors shall so determine.
(b) Grant of Options to Directors and Officers. From and after the
registration of the Common Stock of the Company under the Exchange Act, the
selection of a director or an officer (as the terms "director" and "officer" are
defined for purposes of Rule 16b-3) as a recipient of an option, the timing of
the option grant, the exercise price of the option and the number of shares
subject to the option shall be determined either (i) by the Board of Directors,
of which all members shall be "disinterested persons" (as hereinafter defined),
or (ii) by two or more directors having full authority to act in the matter,
each of whom shall be a "disinterested person." For the purposes of the Plan, a
director shall be deemed to be a "disinterested person" only if such person
qualifies as a "disinterested person" within the meaning of Rule 16b-3, as such
term is interpreted from time to time.
4. Stock Subject to Plan.
----------------------
Subject to adjustment as provided in Section 15 below, the maximum number of
shares of Common Stock which may be issued and sold under the Plan is 418,135
shares. If an option granted under the Plan shall expire or terminate for any
reason without having been exercised in full, the unpurchased shares subject to
such option shall again be available for subsequent option grants under the
Plan. If shares issued upon exercise of an option under the Plan are tendered to
the Company in payment of the exercise price of an option granted under the
Plan, such tendered shares shall again be available for subsequent option grants
under the Plan; provided, that in no
-2-
event shall such shares be made available for issuance to Reporting Persons or
pursuant to exercise of Incentive Stock Options.
5. Forms of Option Agreements.
---------------------------
As a condition to the grant of an option under the Plan, each recipient of
an option shall execute an option agreement in such form not inconsistent with
the Plan as may be approved by the Board of Directors. Such option agreements
may differ among recipients.
6. Purchase Price.
---------------
(a) General. Subject to Section 3(b), the purchase price per share of stock
deliverable upon the exercise of an option shall be determined by the Board of
Directors, provided, however, that in the case of an Incentive Stock Option, the
exercise price shall not be less than 100% of the fair market value of such
stock, as determined by the Board of Directors, at the time of grant of such
option, or less than 110% of such fair market value in the case of options
described in Section 11(b).
(b) Payment of Purchase Price. Options granted under the Plan may provide
for the payment of the exercise price by delivery of cash or a check to the
order of the Company in an amount equal to the exercise price of such options,
or, to the extent provided in the applicable option agreement, (i) by delivery
to the Company of shares of Common Stock of the Company already owned by the
optionee having a fair market value equal in amount to the exercise price of the
options being exercised or (ii) by any other means (including, without
limitation, by delivery of a promissory note of the optionee payable on such
terms as are specified by the Board of Directors) which the Board of Directors
determines are consistent with the purpose of the Plan and with applicable laws
and regulations (including, without limitation, the provisions of Regulation T
promulgated by the Federal Reserve Board). The fair market value of any shares
of the Company's Common Stock or other non-cash consideration which may be
delivered upon exercise of an option shall be determined by the Board of
Directors.
7. Option Period.
--------------
Each option and all rights thereunder shall expire on such date as shall be
set forth in the applicable option agreement, except that, in the case of an
Incentive Stock Option, such date shall not be later than ten years after the
date on which the option is granted and, in all cases, options shall be subject
to earlier termination as provided in the Plan.
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8. Exercise of Options.
--------------------
Each option granted under the Plan shall be exercisable either in full or in
installments at such time or times and during such period as shall be set forth
in the agreement evidencing such option, subject to the provisions of the Plan.
9. Nontransferability of Options.
------------------------------
Options shall not be assignable or transferable by the person to whom they
are granted, either voluntarily or by operation of law, except by will or the
laws of descent and distribution, and, during the life of the optionee, shall be
exercisable only by the optionee; provided, however, that Non-Statutory Options
may be transferred pursuant to a qualified domestic relations order (as defined
in Rule 16b-3).
10. Effect of Termination of Employment or Other Relationship.
----------------------------------------------------------
Except as provided in Section 11(d) with respect to Incentive Stock Options,
and subject to the provisions of the Plan, the Board of Directors shall
determine the period of time during which an optionee may exercise an option
following (i) the termination of the optionee's employment or other relationship
with the Company or (ii) the death or disability of the optionee. Such periods
shall be set forth in the agreement evidencing such option.
11. Incentive Stock Options.
------------------------
Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:
(a) Express Designation. All Incentive Stock Options granted under the Plan
shall, at the time of grant, be specifically designated as such in the option
agreement covering such Incentive Stock Options.
(b) 10% Shareholder. If any employee to whom an Incentive Stock Option is to
be granted under the Plan is, at the time of the grant of such option, the owner
of stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company (after taking into account the attribution of
stock ownership rules of Section 424(d) of the Code), then the following special
provisions shall be applicable to the Incentive Stock Option granted to such
individual:
(i) The purchase price per share of the Common Stock subject to such
Incentive Stock Option shall not be less than 110% of the fair market value
of one share of Common Stock at the time of grant; and
-4-
(ii) the option exercise period shall not exceed five years from the
date of grant.
(c) Dollar Limitation. For so long as the Code shall so provide, options
granted to any employee under the Plan (and any other incentive stock option
plans of the Company) which are intended to constitute Incentive Stock Options
shall not constitute Incentive Stock Options to the extent that such options, in
the aggregate, become exercisable for the first time in any one calendar year
for shares of Common Stock with an aggregate fair market value (determined as of
the respective date or dates of grant) of more than $100,000.
(d) Termination of Employment, Death or Disability. No Incentive Stock
Option may be exercised unless, at the time of such exercise, the optionee is,
and has been continuously since the date of grant of his or her option, employed
by the Company, except that:
(i) an Incentive Stock Option may be exercised within the period of
three months after the date the optionee ceases to be an employee of the
Company (or within such lesser period as may be specified in the applicable
option agreement), provided, that the agreement with respect to such option
may designate a longer exercise period and that the exercise after such
three-month period shall be treated as the exercise of a non-statutory
option under the Plan;
(ii) if the optionee dies while in the employ of the Company, or within
three months after the optionee ceases to be such an employee, the Incentive
Stock Option may be exercised by the person to whom it is transferred by
will or the laws of descent and distribution within the period of one year
after the date of death (or within such lesser period as may be specified in
the applicable option agreement); and
(iii) if the optionee becomes disabled (within the meaning of Section
22(e)(3) of the Code or any successor provision thereto) while in the employ
of the Company, the Incentive Stock Option may be exercised within the
period of one year after the date the optionee ceases to be such an employee
because of such disability (or within such lesser period as may be specified
in the applicable option agreement).
For all purposes of the Plan and any option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Income Tax Regulations (or any successor regulations). Notwithstanding the
foregoing provisions, no Incentive Stock Option may be exercised after its
expiration date.
-5-
12. Additional Provisions.
----------------------
(a) Additional Option Provisions. The Board of Directors may, in its sole
discretion, include additional provisions in option agreements covering options
granted under the Plan, including without limitation restrictions on transfer,
repurchase rights, commitments to pay cash bonuses, to make, arrange for or
guaranty loans or to transfer other property to optionees upon exercise of
options, or such other provisions as shall be determined by the Board of
Directors; provided that such additional provisions shall not be inconsistent
with any other term or condition of the Plan and such additional provisions
shall not cause any Incentive Stock Option granted under the Plan to fail to
qualify as an Incentive Stock Option within the meaning of Section 422 of the
Code.
(b) Acceleration, Extension, Etc. The Board of Directors may, in its sole
discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised.
13. General Restrictions.
---------------------
(a) Investment Representations. The Company may require any person to whom
an option is granted, as a condition of exercising such option, to give written
assurances in substance and form satisfactory to the Company to the effect that
such person is acquiring the Common Stock subject to the option for his or her
own account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws, or with covenants or representations made by the Company in
connection with any public offering of its Common Stock.
(b) Compliance With Securities Laws. Each option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject to such option
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
thereunder, such option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, or satisfaction of
such condition shall have been effected or obtained on conditions acceptable to
the Board of Directors. Nothing herein shall be deemed to require the Company to
apply for or to obtain such listing, registration or qualification, or to
satisfy such condition.
-6-
14. Rights as a Shareholder.
------------------------
The holder of an option shall have no rights as a shareholder with respect
to any shares covered by the option (including, without limitation, any rights
to receive dividends or non-cash distributions with respect to such shares)
until the date of issue of a stock certificate to him or her for such shares. No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.
15. Adjustment Provisions for Recapitalizations and Related Transactions.
---------------------------------------------------------------------
(a) General. If, through or as a result of any merger, consolidation, sale
of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, an
appropriate and proportionate adjustment may be made in (x) the maximum number
and kind of shares reserved for issuance under the Plan, (y) the number and kind
of shares or other securities subject to any then outstanding options under the
Plan, and (z) the price for each share subject to any then outstanding options
under the Plan, without changing the aggregate purchase price as to which such
options remain exercisable. Notwithstanding the foregoing, no adjustment shall
be made pursuant to this Section 15 if such adjustment would cause the Plan to
fail to comply with Section 422 of the Code.
(b) Board Authority to Make Adjustments. Any adjustments under this Section
15 will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive. No fractional shares will be issued under the Plan on account of
any such adjustments.
16. Merger, Consolidation, Asset Sale, Liquidation, etc.
----------------------------------------------------
(a) General. In the event of a consolidation or merger or sale of all or
substantially all of the assets of the Company in which outstanding shares of
Common Stock are exchanged for securities, cash or other property of any other
corporation or business entity or in the event of a liquidation of the Company,
the Board of Director of the Company, or the board of directors of any
corporation assuming the obligations of the Company, may, in its discretion,
take any one or more of the following actions, as to outstanding options: (i)
provide that such options shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), provided that any such options
-7-
substituted for Incentive Stock Options shall meet the requirements of Section
424(a) of the Code, (ii) upon written notice to the optionees, provide that all
unexercised options will terminate immediately prior to the consummation of such
transaction unless exercised by the optionee within a specified period following
the date of such notice, (iii) in the event of a merger under the terms of which
holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment for each share surrendered in the merger (the "Merger
Price"), make or provide for a cash payment to the optionees equal to the
difference between (A) the Merger Price times the number of shares of Common
Stock subject to such outstanding options (to the extent then exercisable at
prices not in excess of the Merger Price) and (B) the aggregate exercise price
of all such outstanding options in exchange for the termination of such options,
and (iv) provide that all or any outstanding options shall become exercisable in
full immediately prior to such event.
(b) Substitute Options. The Company may grant options under the Plan in
substitution for options held by employees of another corporation who become
employees of the Company, or a subsidiary of the Company, as the result of a
merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, of property or stock of the employing corporation. The
Company may direct that substitute options be granted on such terms and
conditions as the Board of Directors considers appropriate in the circumstances.
17. No Special Employment Rights.
-----------------------------
Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment by
the Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the
optionee.
18. Other Employee Benefits.
------------------------
Except as to plans which by their terms include such amounts as
compensation, the amount of any compensation deemed to be received by an
employee as a result of the exercise of an option or the sale of shares received
upon such exercise will not constitute compensation with respect to which any
other employee benefits of such employee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life insurance or
salary continuation plan, except as otherwise specifically determined by the
Board of Directors.
-8-
19. Amendment of the Plan.
----------------------
(a) The Board of Directors may at any time, and from time to time, modify or
amend the Plan in any respect, except that if at any time the approval of the
shareholders of the Company is required under Section 422 of the Code or any
successor provision with respect to Incentive Stock Options, or under Rule
16b-3, the Board of Directors may not effect such modification or amendment
without such approval.
(b) The termination or any modification or amendment of the Plan shall not,
without the consent of an optionee, affect his or her rights under an option
previously granted to him or her. With the consent of the optionee affected, the
Board of Directors may amend outstanding option agreements in a manner not
inconsistent with the Plan. The Board of Directors shall have the right to amend
or modify (i) the terms and provisions of the Plan and of any outstanding
Incentive Stock Options granted under the Plan to the extent necessary to
qualify any or all such options for such favorable federal income tax treatment
(including deferral of taxation upon exercise) as may be afforded incentive
stock options under Section 422 of the Code and (ii) the terms and provisions of
the Plan and of any outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
20. Withholding.
------------
(a) The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan. Subject to the prior approval of the Company, which
may be withheld by the Company in its sole discretion, the optionee may elect to
satisfy such obligations, in whole or in part, (i) by causing the Company to
withhold shares of Common Stock otherwise issuable pursuant to the exercise of
an option or (ii) by delivering to the Company shares of Common Stock already
owned by the optionee. The shares so delivered or withheld shall have a fair
market value equal to such withholding obligation. The fair market value of the
shares used to satisfy such withholding obligation shall be determined by the
Company as of the date that the amount of tax to be withheld is to be
determined. An optionee who has made an election pursuant to this Section 20(a)
may only satisfy his or her withholding obligation with shares of Common Stock
which are not subject to any repurchase forfeiture, unfulfilled vesting or other
similar requirements.
(b) Notwithstanding the foregoing, in the case of a Reporting Person, no
election to use shares for the payment of withholding taxes shall be effective
unless made in compliance with any applicable requirements of Rule 16b-3 (unless
it is intended that the transaction not qualify for exemption under Rule 16b-3).
-9-
21. Cancellation and New Grant of Options, Etc.
-------------------------------------------
The Board of Directors shall have the authority to effect, at any time and
from time to time, with the consent of the affected optionees, (i) the
cancellation of any or all outstanding options under the Plan and the grant in
substitution therefor of new options under the Plan covering the same or
different numbers of shares of Common Stock and having an option exercise price
per share which may be lower or higher than the exercise price per share of the
cancelled options or (ii) the amendment of the terms of any and all outstanding
options under the Plan to provide an option exercise price per share which is
higher or lower than the then-current exercise price per share of such
outstanding options.
22. Effective Date and Duration of the Plan.
----------------------------------------
(a) Effective Date. The Plan shall become effective when adopted by the
Board of Directors, but no option granted under the Plan shall become
exercisable unless and until the Plan shall have been approved by the Company's
shareholders. If such shareholder approval is not obtained within twelve months
after the date of the Board's adoption of the Plan, options previously granted
under the Plan shall not vest and shall terminate and no options shall be
granted thereafter. Amendments to the Plan not requiring shareholder approval
shall become effective when adopted by the Board of Directors; amendments
requiring shareholder approval (as provided in Section 19) shall become
effective when adopted by the Board of Directors, but no option granted after
the date of such amendment shall become exercisable (to the extent that such
amendment to the Plan was required to enable the Company to grant such option to
a particular person) unless and until such amendment shall have been approved by
the Company's shareholders. If such shareholder approval is not obtained within
twelve months of the Board's adoption of such amendment, any options granted on
or after the date of such amendment shall terminate to the extent that such
amendment was required to enable the Company to grant such option to a
particular optionee. Subject to this limitation, options may be granted under
the Plan at any time after the effective date and before the date fixed for
termination of the Plan.
(b) Termination. Unless sooner terminated in accordance with Section 16, the
Plan shall terminate upon the close of business on the day next preceding the
tenth anniversary of the date of its adoption by the Board of Directors. Options
outstanding on such date shall continue to have force and effect in accordance
with the provisions of the instruments evidencing such options.
23. Provision for Foreign Participants.
-----------------------------------
The Board of Directors may, without amending the Plan, modify awards or
options granted to participants who are foreign nationals or employed outside
the
-10-
United States to recognize differences in laws, rules, regulations or customs of
such foreign jurisdictions with respect to tax, securities, currency, employee
benefit or other matters.
Adopted by the Board of Directors on May 1, 1996.
-11-
1995 STOCKHOLDERS AGREEMENT
This 1995 Stockholders Agreement, dated as of December 22, 1995, is among
Casella Waste Systems, Inc., a Delaware corporation (the"Company"), Norwest
Equity Partners V ("NEP"), Weston Presidio Capital II, L.P. ("WPC"), BCI Growth
III, L.P. ("BCI"), North Atlantic Venture Fund, L.P. ("NAVF"), Vermont Venture
Capital Fund, L.P. ("VVCF"), FSC Corp., Prudential Securities Incorporated,
Thomas S. Shattan (collectively, and together with their permitted successors
and assigns, the "Investors"), and the stockholders whose names appear on the
signature page hereof. The parties agree as follows:
1. CERTAIN DEF1NITIONS.
1.1. "Acceptance Period" is defined in Section 2.4(a).
1.2. "Affiliate" means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with the Company (or
other specified Person) and shall include (a) any Person who is an officer,
director or beneficial holder of at least 10 % of the outstanding capital stock
of the Company (or other specified Person), (b) any Person of which the Company
(or other specified Person) or an officer of the Company shall, directly or
indirectly, either beneficially own at least 10% of the outstanding equity
securities or constitute at least a 10% participant, and (c) in the case of a
specified Person who is an individual, Members of the Immediate Family of such
Person.
1.3. "BCI" is defined in the preamble.
1.4. "Bohlig Trusts" means the Blake Elizabeth Bohlig Trust and the
Christopher James Bohlig Trust, Edward V. Schwiebert, Trustee.
1.5. "By-laws" means all written rules, regulations, procedures and by-laws
and all other similar documents, relating to the management, governance or
internal regulation of a Person other than an individual, or interpretive of the
Charter of such Person, each as from time to time amended or modified.
1.6. "Casella Trusts" means the Lauren Elizabeth Casella Trust, the Michael
Anthony Casella Trust, the John William Casella H, Trust, the Stephanie Leigh
Casella Trust, the Elizabeth Ashley Casella Trust, and the Robert Livingstone
Casella Trust, Harry R. Ryan, Esq. Trustee and the Kristen Ann Casella Trust and
the Joseph Anthony Casella Trust, Matthew and Karen Potter, Trustees.
1.7. "Charter" means the articles or certificate of incorporation, statute,
constitution, joint venture or partnership agreement or articles or other
charter of any Person other than an individual, each as from time to time
amended or modified.
1.8. "Code" means the federal Internal Revenue Code of 1986 or any successor
statute, and the rules and regulations thereunder, and in the case of any
referenced section of any such statute, rules or regulation, any successor
section thereof, collectively and as from time to time amended and in effect.
1.9. "Common Stock" means the Company's Class A Common Stock, $0.01 par
value.
1.10. "Company" is defined in the preamble.
1.11. "Company Acceptance Notice" is defined in Section 2.4(a).
1.12. "Company Acceptance Period" is defined in Section 2.4(a).
1.13. "Contractual Obligation" means, with respect to any Person, any
contracts, agreements, deeds, mortgages, leases, licenses, other instruments,
commitments, undertakings, arrangements or understandings, written or oral, or
other documents, including any document or instrument evidencing indebtedness,
to which any such Person is a party or otherwise subject to or bound by or to
which any asset of any such Person is subject.
1.14. "Covered Stockholders" means John W. Casella, Douglas R. Casella, the
Casella Trusts and their permitted successors and assigns, but in no event
including the Investors.
1.15. "Distribution" means (a) the declaration or payment of any dividend on
or in respect of any shares of any class of capital stock of the Company, any of
its Subsidiaries or other specified Person, other than dividends payable solely
in shares of the common stock of the payor; (b) the purchase, redemption or
other retirement of any shares of any class of capital stock of the Company, any
of its Subsidiaries or other specified Person directly, or indirectly through a
Subsidiary or otherwise; or (c) any other distribution on or in respect of any
shares of any class of capital stock of the Company, any of its Subsidiaries or
other specified Person.
1.16. "ERISA" means the Employee Retirement Income Security Act of 1974 or
any successor statute and the rules and regulations thereunder, and in the case
of any referenced section of any such statute, rule or regulation, any successor
section thereof, collectively and as from time to time amended and in effect.
-2-
1.17. "Exchange Agreements" means the 1993 Exchange and Repurchase Agreement
and the 1994 Exchange and Repurchase Agreement, each dated as of December 22,
1995, among the Company and the noteholders of the Company named therein.
1.18. "GAAP" means generally accepted accounting principles, as in effect
from time to time, applied on a basis consistent with that used in preparation
of the financial statements referred to in Section 5.2(a).
1.19. "Investor" is defined in the preamble.
1.20. "Investor Securities" means the Preferred Stock and the Warrants,
together with any securities issued with respect thereto, upon exercise,
conversion or transfer thereof or in exchange therefor, including the Common
Stock issuable upon conversion of the Preferred Stock and exercise of the
Warrants.
1.21. "Legal Requirement" means any federal, state, local or foreign law,
statute, standard, ordinance, code, order, rule, regulation, resolution,
promulgation or any final order, judgment or decree of any court, arbitrator,
tribunal or governmental authority, or any license, franchise, permit or similar
right granted under any of the foregoing.
1.22. "Management Stockholders" means each of the Stockholders specified as
a Management Stockholder on Schedule A, but only so long as such Management
Stockholder or the Settlor of any trust that is a Management Stockholder remains
an employee of the Company or one of its Subsidiaries.
1.23. "Material Adverse Effect" means a material adverse effect upon the
business, assets, financial condition or income of the Company and its
Subsidiaries on a consolidated basis.
1.24. "Material Event Notice" is defined in Section 5.2(d).
1.25. "Members of the Immediate Familv" as applied to any individual, means
each parent, spouse, child, brother, sister or the spouse of a child, brother or
sister of the individual, and each trust created for the benefit of one or more
of such persons and each custodian of a property of one or more such persons.
1.26. "NAVF" is defined in the preamble.
1.27. "Notice of Intention to Sell" is defined in Section 2.4(a).
1.28. "NWI" means National Waste Industries, Inc.
-3-
1.29. "Other Stockholders" means Stephen W. Houghton, Richard H. Lindgren,
Robert J. Lynch, Jr., the Ryan Trust, John F. Chapple, Marcia DeRosia, and NWI.
1.30. "Person" means an individual, partnership, corporation, company,
association, trust, joint venture, unincorporated organization and any
governmental department or agency or political subdivision.
1.31. "Preferred Director" means the directors designated by BCI, VVCF, NAVF
and the holders of Series D Preferred Stock pursuant to Section 4.1 and, after a
Remedy Event, Section 4.3.
1.32. "Preferred Stock" means the Company's Series A, B and D Convertible
Preferred Stock, par value $0.01 per share.
1.33. "Principal Holder" means each original holder of Preferred Stock and
any permitted transferee of such original holder who holds 20% or more of the
Investor Securities held by the original holder on the date hereof.
1.34. "Purchase Agreement" means the Preferred Stock Purchase Agreement
dated as of December 22, 1995, as from time to time in effect, among the Company
and the Investors named therein.
1.35. "Purchase Price" is defined in Section 2.4(a).
1.36. "Qualified Offering" is defined in Section C.5(a) of Article Fourth of
the Company's Amended and Restated Certificate of Incorporation.
1.37. "Registration Rights Agreement" means the 1995 Registration Rights
Agreement dated as of December 22, 1995, as from time to time in effect, among
the Company and the stockholders named therein.
1.38. "Rejection Notice" is defined in Section 2.4(a).
1.39. "Related Agreements" is defined in Section 4.1 of the Purchase
Agreement.
1.40. "Repurchase Agreement" means the 1995 Repurchase Agreement among the
Company and the Warrantholders named therein.
1.41. "Remedy Event" is defined in Section 4.5.
1.42. "Required Holders" means the holders at the relevant time (excluding
the Company or any of its Subsidiaries) of a majority or more of the voting
power of
-4-
all Investor Securities of all classes (calculated to give effect to the
conversion of all Preferred Stock that is convertible into Common Stock and the
exercise of all Warrants) voting together as a single class.
1.43. "Ryan Trust" means Jane O'Neill Ryan, Thomas R. Ryan, Daniel C. Crane
and Harry R. Ryan III, Trustees U/T/A dated March 17, 1994, Harry R. Ryan, III,
Settlor.
1.44. "SBA" means the Small Business Administration.
1.45. "SBIC" means a small business investment company licensed by the SBA
pursuant to the Small Business Investment Act.
1.46. "SEC" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended or both.
1.47. "Securities" means (i) all shares of any class of capital stock of the
Company owned by any Stockholder or Other Stockholder, (ii) all Warrants and
(iii) all shares of capital stock or warrants issued with respect to, in
exchange for or upon conversion of any such Shares or Warrants.
1.48. "Selling Stockholder" means a Stockholder selling Securities under
Section 2 or Shares under Section 3.
1.49. "Shares" means (i) all shares of any class of capital stock of the
Company owned by any Stockholder or Other Stockholder (other than Series A, B or
C Preferred Stock), (ii) all Warrants and (iii) all shares of capital stock or
warrants issued with respect to, in exchange for or upon conversion of any such
Shares or Warrants.
1.50. "Stockholders" means the Management Stockholders, the Covered
Stockholders and the Investors, but in no event including the Other
Stockholders.
1.51. "Stockholder Notice of Election" is defined in Section 2.4(a).
1.52. "Subject Securities" is defined in Section 2.4(a).
1.53. "Transfer" means sell, assign, encumber, pledge, hypothecate, give
away or dispose of or transfer in any other manner, whether voluntarily,
involuntarily, by operation of law, pursuant to judicial process, divorce
decree, property settlement, bankruptcy or otherwise.
1.54. "VVCF" is defined in the preamble.
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1.55. "Warrants" means the common stock purchase warrants issued to certain
Investors dated July 26, 1993 and May 25, 1994.
2. TRANSFER RESTRICTIONS AND PURCHASE RIGHTS.
2.1. Transfers of Securities. No Stockholder nor any Other Stockholder shall
Transfer any Securities or allow the power to vote Securities to be exercised by
any other Person (except through ordinary proxies, revocable at the option of
such Stockholder or Other Stockholder), except that a Stockholder or Other
Stockholder may make a Transfer as permitted under this Section 2 and, if
applicable, Section 3. Notwithstanding anything in this Agreement to the
contrary, no Stockholder or Other Stockholder (or permitted transferee of a
Stockholder or Other Stockholder) may Transfer Securities to a Person (other
than a Stockholder or Other Stockholder) in a business similar to that engaged
in by the Company; provided, however, that, subject to Section 9.4 below, an
Investor may Transfer Securities to any such competitor if there shall have
occurred and be continuing a Remedy Event.
2.2. Right of First Offer with respect to Stockholders. No Stockholder shall
Transfer any Securities to any Person (other than pursuant to Section 2.3)
unless such Selling Stockholder first gives the Company (and the Investors for
purposes of compliance with Section 3) written notice of its intent to Transfer
such Securities (the "Offer Notice"), which notice shall set forth the number of
Securities to be Transferred. The Company may offer to purchase all (but not
less than all) of the Securities specified in the Offer Notice by delivery of a
written offer (the "Offer"), which Offer shall specify the price and terms on
which the Company proposes to purchase the Securities, to the Selling
Stockholder as soon as practical but in any event within 15 days after the
delivery of the Offer Notice. The Company shall also send a copy of the Offer to
the Investors. Upon receipt of the Offer, the Selling Stockholder may elect (i)
to sell to the Company all of the Securities specified in the Offer Notice at
the price and on the terms specified in the Offer or (ii) to market and sell the
Securities to other potential purchasers for a period of 150 days following the
date of receipt; provided, however, that the Selling Stockholder shall not sell
any Securities to other potential purchasers during such 150 day period at a
price or otherwise on terms equal to or less favorable to the Selling
Stockholder than the price and terms set forth in the Offer. If the Company
shall fail to elect to purchase all of the Securities it has the right to
purchase under this Section 2.2, each Stockholder and Other Stockholder shall
have the right and option to elect to purchase, at the price and terms specified
in the Offer, a number of the Securities equal to the product obtained by
multiplying the Securities by a fraction, the numerator of which is the number
of Securities held by such Stockholder or Other Stockholder (assuming the
conversion and exercise of all Securities into Common Stock) and the denominator
of which is the aggregate number of Securities owned by all Stockholders or
Other Stockholders. Each Stockholder or Other Stockholder making such election
shall give written notice to the Company and the Selling Stockholder of its
interest in
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purchasing Securities under this Section 2.2 within fifteen (15) days after the
earlier of the expiration of the 150 day period or the rejection by the Company
of the Offer. Each Stockholder or Other Stockholder shall also have the option
to purchase on a similar basis any Shares not purchased by other Investors.
2.3. Certain Permitted Transfers.
(a) Transfers to Immediate Familv. Any Stockholder or Other Stockholder
may Transfer his Securities to Members of the Immediate Family of
such Stockholder or Other Stockholder so long as each transferee
executes a counterpart of this Agreement as a Stockholder and, in
the case of a transfer by a Covered Stockholder, a Covered
Stockholder.
(b) Public Offering. A Stockholder or Other Stockholder may sell any
Securities in a public offering registered under the federal
Securities Act of 1933, as amended, or, following a public
offering, in a transaction permitted by Rule 144 thereunder.
(c) Investors. Any Investor may transfer Securities to an Affiliate of
such Investor so long as each transferee executes a counterpart of
this Agreement as a Stockholder and an Investor.
(d) Pledges by Other Stockholders. Any Other Stockholder may transfer
Securities owned by such Other Stockholder by a pledge which
creates a mere security interest in the Securities; provided
however that the pledgee thereof shall agree in writing in advance
with the parties hereto to be bound by and comply with all
applicable provisions of this Agreement to the same extent as if it
were the Other Stockholder making such pledge.
2.4. Right of First Offer with respect to Other Stockholders.
(a) If any Other Stockholder (the "Selling Stockholder") shall desire
at any time to Sell any of its Securities, and shall receive a bona
fide purchase offer therefor or the terms of a potential bona fide
purchase offer therefor (such offers being hereinafter referred to
as a "Purchase Offer"), then the Selling Stockholder shall promptly
deliver a notice of intention to sell (a "Notice of Intention to
Sell") to the Company, each Stockholder and each remaining Other
Stockholder setting forth the Securities to be sold (the "Subject
Securities") and the terms and conditions of such Purchase Offer,
which shall be for cash or obligations to pay cash. The Company
shall have the right and option, for a period of 15 days after
receipt of the Notice of Intention to Sell (the "Company Acceptance
Period"), to elect to purchase, at a price and on the terms and
conditions stated in the Notice of Intention to Sell, all but not
less than all of the Subject Securities. The Company shall give
written notice of its
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election to purchase (a "Company Acceptance Notice") or not to
purchase (a "Rejection Notice") to the Selling Stockholder, each
Stockholder and each remaining Other Stockholder prior to the
expiration of the Company Acceptance Period. If the Company shall
fail to elect to purchase all of the Subject Securities in
accordance with the provisions of this paragraph (a), each
Stockholder and each remaining Other Stockholder shall have the
right and option to elect to purchase, at the price and on the
terms stated in the Notice of Intention to Sell, a number of the
Subject Securities equal to the product obtained by multiplying the
Subject Securities by a fraction (x) the numerator of which is
equal to the number of Securities (assuming full conversion and
exercise into Common Stock) at the time owned by such Stockholder
or Other Stockholder and (y) the denominator of which is equal to
the aggregate number of Securities (assuming full conversion and
exercise into Common Stock) at the time owned by all Stockholders
and all Other Stockholders. Each Stockholder and each Other
Stockholder making such election shall give written notice (a
"Stockholder Notice of Election") to the Selling Stockholder, to
each Stockholder, each Other Stockholder and to the Company within
fifteen (15) days after the earlier of the expiration of the
Company Acceptance Period or the receipt by such Stockholder of a
Notice of Rejection, as the case may be (the "Acceptance Period").
Each Stockholder and each Other Stockholder shall also have the
option, exercisable by so specifying in the Stockholder Notice of
Election, to purchase on a pm rata basis similar to that described
above any remaining Subject Securities not purchased by
Stockholders or Other Stockholders, in which case the Stockholders
or Other Stockholders exercising such further option shall be
deemed to have elected to purchase such remaining Subject
Securities on such pro rata basis.
(b) If effective acceptances shall not be received pursuant to
paragraph (a) above in respect of all the Subject Securities, then
the Selling Stockholder may, at its election, either: (i) sell to
the Stockholders and remaining Other Stockholders pursuant to their
elections and sell any remaining Subject Securities to one or more
outside purchasers on terms not more favorable to such purchaser(s)
than those stated in the Notice of Intention to Sell; or (ii)
rescind its Notice of Intention to Sell, which rescission shall be
effected by notice in writing delivered to each Stockholder and
each Other Stockholder that shall have elected to purchase and to
the Company within ten (10) days after expiration of the Acceptance
Period, and keep all (but not less than all) of its Subject
Securities. Any outside purchaser must purchase no more than sixty
(60) days after the end of the Acceptance Period.
2.5. Closing on Stock Sales. The purchase of the Securities by the Company
under Section 2.2 shall occur at a closing on the date specified in the Offer,
which date shall be no fewer than 30 nor more than 45 days after the date on
which the Selling Stockholder receives the Offer. The purchase of the Subject
Securities by the
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Company under Section 2.4 shall occur at a closing on the date specified in the
Company Acceptance Notice, which date shall be no fewer than 30 nor more than 45
days after the date on which the Selling Stockholder receives the Company
Acceptance Notice. At the closing (under either Section 2.2 or 2.4), the Company
shall pay the purchase price in the form and amount specified in the Offer to
the order of the Selling Stockholder. Certificates for the Securities to be
purchased, duly endorsed or accompanied by duly executed stock powers, in each
case with signatures guaranteed, shall be delivered at the closing by the
Selling Stockholder.
2.6. Sale of Warrants. In the event that the sale of Securities involves a
sale of Warrants, each such Selling Stockholder may deliver to the Company as
its agent, the Warrants for the issuance of Securities and executed subscription
forms specifying the number of Securities that Selling Stockholder elects to
receive upon exercise and sell under Section 2. The Selling Stockholder shall
tender payment therefor, or, at its option, specify that payment shall be made
out of the proceeds of the sale of Securities to the purchaser, and the Company
shall be authorized to sell the Securities to the purchaser on such Selling
Stockholder's behalf; provided, however, that the Selling Stockholder directs in
writing that payment of the proceeds in an amount equal to the exercise price be
made directly to the Company. Any unexercised portion of the Warrants shall be
returned to the Selling Stockholder.
3. TAG-ALONG RESTRICTIONS. A Covered Stockholder may sell any Shares in
accordance with Section 2.2 to any other Person (the "Proposed Buyer") only if
such Covered Stockholder complies with the terms set forth in this Section 3.
3.1. Offer. A notice (the "Tag-Along Notice") shall be delivered by the
Selling Stockholder to each Investor and each Other Stockholder at least 30 days
prior to the date of any Proposed Sale (as defined below). The Tag-Along Notice
shall include:
(a) A copy of a bona fide offer from the Proposed Buyer, which shall
set forth the material terms of the proposed sale, including the number of
Shares proposed to be purchased, the purchase price, the name and address of
the Proposed Buyer and the other principal terms of the proposed transaction
(the "Proposed Sale");
(b) An offer by the Selling Stockholder to include in the Proposed Sale
to the Proposed Buyer, at the option of each Investor and each Other
Stockholder, that number of Shares as is determined in accordance with
Section 3.2, on the same terms and conditions as the Selling Stockholder
shall sell his Shares; and
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(c) An agreement from the Proposed Buyer to purchase from the Investors
and the Other Stockholders such number of Shares as shall be includable in
such Proposed Sale pursuant to Section 3.2.
3.2. Time and Manner of Exercise. If any of the Investors or Other
Stockholders desires to accept the offer contained in the Tag-Along Notice, he
or it shall notify the Selling Stockholder in writing within 20 days after
receipt of the Tag-Along Notice. If an Investor or Other Stockholder has not
accepted such offer in writing, he or it shall be deemed to have waived all
rights with respect to the Proposed Sale. Any acceptance of the offer contained
in the Tag-Along Notice shall be irrevocable except as hereinafter provided.
Each Investor and Selling Stockholder who has elected to participate in such
Proposed Sale shall be entitled to sell in the Proposed Sale, on the same terms
and conditions as the Selling Stockholder (treating any Shares that are
Preferred Stock and Warrants as if they had been converted into or exercised for
Common Stock), such number of its Shares equal to the number (rounded to the
nearest whole share) of all Shares to be included in the Proposed Sale times a
fraction, the numerator of which is the total number of Shares held by such
Investor or Other Stockholder (on an as-converted or as-exercised basis)
immediately before the Proposed Sale and the denominator of which is the sum of
the total number of Shares held by all Investors and Selling Stockholders who
exercised their rights under this Section 3 plus the total number of Shares held
by the Selling Stockholder immediately before the Proposed Sale.
3.3. Time and Manner of Closing. Each of the Investors and Other
Stockholders participating in any Proposed Sale shall take such actions and
execute such documents and instruments as shall be reasonably necessary in order
to consummate the Proposed Sale expeditiously on the same terms as the Selling
Stockholder. If at the end of 180 days following the date on which the Tag-Along
Notice was given the Selling Stockholder has not completed the Proposed Sale in
accordance with the terms hereof, the Investors and Other Stockholders shall be
released from their obligations hereunder. At the closing of any sale under this
Section 3.3, each Investor and Other Stockholder shall deliver certificates
representing the Shares to be sold by it, duly endorsed for transfer and (if
requested in writing by the Proposed Buyer) with signature guaranteed, and with
any stock transfer tax stamps affixed, against delivery of the applicable
purchase price. Any shares sold to the Proposed Buyer in accordance with this
Section 3.3 shall no longer be subject to this Agreement.
4. VOTING AGREEMENT.
4.1. Board Representation. Each Stockholder agrees (a) to vote its Shares to
fix the number of directors at nine until a Remedy Event occurs and thereafter
to fix the number of directors at the number contemplated by Section 4.3 and (b)
to vote all Shares owned by such party (i) to elect as directors, three persons
nominated by the
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Covered Stockholders, which persons shall initially be John W. Casella, Douglas
R. Casella and James W. Bohlig, (ii) to elect as a director a person designated
by BCI, so long as BCI holds Investor Securities, which person shall initially
be Donald P. Remey, (iii) to elect as a director a person designated jointly by
NAVF and VVCF, so long as each holds Investor Securities, which person shall
initially be Gregory B. Peters, (iv) to elect as a director a person designated
by the holders of a majority of the shares of Series D Preferred Stock, which
person shall initially be Michael F. Cronin, (v) to elect as a director a person
designated by NWI, which person shall initially be C. Andrew Russell; provided;
however, that if NWI shall fail to designate such a person, the Required Holders
may designate a person to fill such position; (vi) to elect as directors two
independent representatives, one of which shall be designated by the Covered
Stockholders and one of which shall be designated by a majority of the eight
directors designated pursuant to this Section 4.1, which person shall initially
be John F. Chapple, provided, however, that no independent representative shall
be an Affiliate of either the Company, any of the Required Holders or the
Management Stockholders and (vii) after a Remedy Event has occurred, to elect as
additional directors of the Company such persons nominated by the Investors as
is contemplated by Section 4.3 and to continue to vote for such persons (or any
successors nominated by the Investors, as the case may be) as directors of the
Company until the Remedy Event is cured.
4.2. Votes Per Share: Notices; Record holders of Preferred Stock shall be
entitled to notice of any stockholders' meeting or solicitation of stockholders'
consents in the manner provided in the Bylaws of the Company for general
notices.
4.3. Election after Remedv Event. Upon the occurrence and during the
continuation of any Remedy Event (as defined in Section 4.5), then, upon notice
to the Company given by the Required Holders, the number of directors shall be
increased to thirteen and the Required Holders shall have the right to
designate four directors in addition to the persons designated in clauses (ii),
(iii), and (iv) of Section 4.1 above. Following the rectification or cure of the
Remedy Event, whereupon such right of the Required Holders to elect a majority
of the Board of Directors of the Company as set forth above shall cease, (and
the maximum number of directors shall be reduced to nine and shall be designated
pursuant to Section 4.1 above), subject to being again revived from time to time
upon the reoccurrence of the conditions above described.
4.4. Tenure. Each Preferred Director shall serve for a term of the lesser of
(a) one year and until such Preferred Director's successor is elected and
qualified, or (b) until the right to elect such Preferred Director ceases (at
which time such Preferred Director will be deemed to be removed). So long as the
holders of Preferred Stock are entitled to elect Preferred Directors, any
vacancy in the position of a Preferred Director may be filled only by vote of
the holders of a majority of the shares of the series of Preferred Stock
entitled to vote for such Preferred Director. A
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Preferred Director may, during such Preferred Director's term of office, be
removed at any time, with or without cause, only by the affirmative vote of the
holders of record of a majority of the outstanding shares of Preferred Stock of
the respective series.
4.5. Remedy Event. The term "Remedy Event" shall mean the occurrence and
continuance of any of the following events for a period exceeding 150 days
(unless otherwise specified below) after written notice of the occurrence of
such event has been furnished to the Company:
(a) The Company shall fail to make any payment in respect of dividends
declared on any shares of Preferred Stock.
(b) (Capitalized terms used in this Section 4.5(b) and in Section
4.5(d) and not otherwise defined shall have the meanings set forth in the
Amended and Restated Certificate of Incorporation). If at any time after
December 31, 2000, a Series D Holder delivers a Series D Put Notice, the
Company shall fail to pay (i) any quarterly installment payment in respect
of shares of Series D Preferred Stock representing one-eighth of the Series
D Liquidation Amount, plus, in the case of a holder that selects the
Interest Option, interest thereon at a rate equal to 15% per annum on the
Series D Liquidation Amount or (ii) by the expiration of the seven quarters
commencing on the Series D Put Closing Date, the full amount of the Series D
Purchase Price, plus, in the case of a holder that selects the Interest
Option, interest at a rate of 15% per annum on the Liquidation Amount and
prime plus two percent per annum on the amount of the Series D Purchase
Price in excess of the Series D Liquidation Amount.
(c) (Capitalized terms used in this Section 4.5(c) and not otherwise
defined shall have the meanings set forth in the Repurchase Agreement). If
at any time after December 31, 2000, any Holder shall deliver a Put Notice,
the Company shall fail to pay (i) any quarterly installment payment in
respect of Put Securities that are Warrant Shares representing one-eighth of
the Initial Investment Amount, plus, in the case of a Holder that selects
the Interest Option, interest thereon at a rate of 15% per annum on the
Initial Investment Amount or (ii) by the expiration of the seven quarters
commencing on the Put Closing Date, the full amount of the Purchase Price
(determined in accordance with Section 2 of the Repurchase Agreement) for
the Put Securities, plus, in the case of a Holder that selects the Interest
Option, interest thereon (at the rates specified in Section 3(b) of the
Repurchase Agreement).
(d) (Unless otherwise noted, capitalized terms used in this Section
4.5(d) and not otherwise defined shall have the meanings set forth in the
Repurchase Agreement). If at any time after December 31, 2000, upon the
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delivery of a Put Notice by the Holders of the Warrants pursuant to the
Repurchase Agreement, the Company shall fail to pay the full amount of the
Series C Redemption Price (as defined in the Amended and Restated
Certificate of Incorporation) together with the required interest thereon
within 180 days after the Put Closing Date (as defined in the Repurchase
Agreement).
(e) The Management Stockholders shall have known or, in the exercise of
reasonable diligence and inquiry, should have known, that the Company was
not in compliance in all material respects with all applicable Environmental
Laws (as defined in the Purchase Agreement) at the date hereof.
(f) The Company shall fail to issue the requisite number of shares of
Common Stock upon the conversion by the holders thereof of the Preferred
Stock or upon exercise of the Warrants.
(g) The Company or any Subsidiary or Subsidiaries owning an aggregate
of at least 50% of the consolidated assets or contributing over the past
fiscal year an aggregate of at least 50% of the consolidated cash flow
shall:
(i) commence a voluntary case under Title 11 of the United States
as from time to time in effect, or authorize, by appropriate
proceedings of its board of directors or other governing body, the
commencement of such a voluntary case;
(ii) have filed against it a petition commencing an involuntary
case under such Title 11;
(iii) seek relief as a debtor under any applicable law, other than
such Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the
rights of creditors of the Company generally, or consent to or
acquiesce in such relief;
(iv) have entered against it any order by a court of competent
jurisdiction (A) finding it to be bankrupt or insolvent, (B) ordering
or approving its liquidation, reorganization or any modification or
alteration of the rights of its creditors, or (C) assuming custody of,
or appointing a receiver or other custodian for, all or a substantial
part of its property; or
(v) make an assignment for the benefit of, or enter into a
composition with, its creditors, or appoint or consent to the
appointment
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of a receiver or other custodian for all or a substantial part of its
property.
(h) John W. Casella shall cease for any reason to be the Chief
Executive Officer of the Company and James W. Bohlig shall cease for any
reason to be the Chief Operating Officer of the Company and replacements
reasonably satisfactory to the Required Holders shall not be in place within
nine months from the date on which the later to depart of Mr. Casella and
Mr. Bohlig ceases to hold his office.
4.6. Voting. As to any matter on which holders of Common Stock of the
Company are entitled to vote their shares in accordance with the Company's
Amended and Restated Certificate of Incorporation and the Delaware General
Corporation Law, other than the election of directors, which is governed by the
above paragraphs of this Section 4, the Company shall be responsible for first
obtaining indications of voting preferences from each Stockholder and Other
Stockholder, each of which will be entitled to state a preference as to the
number of shares of Common Stock that he then holds or that he has the right to
acquire upon exercise or conversion of Shares that are not Common Stock. The
Company shall notify each Stockholder and Other Stockholder of respective
percentages, based on the aggregate number of shares of Common Stock as to which
preferences can be stated, that were in favor of the matter, that were against
the matter, that abstained from voting, and that did not vote. Except as
otherwise required by law, each Stockholder and Other Stockholder that holds of
record shares of Common Stock entitled to vote on any matter as to which a
preference has been stated agrees to votes his shares in accordance with the
percentages determined by the Company from the foregoing process. In connection
with any matters as to which a vote of the Preferred Stock, voting as a single
class, is required, the Company shall obtain such preferences only from
Stockholders and Other Stockholders who hold Preferred Stock.
5. COVENANTS. The Company covenants that it will comply, and will cause each
of its Subsidiaries to comply, with the following provisions:
5.1. Covenants Relating to the Company's Board of Directors.
(a) Board of Directors. The Board of Directors of the Company shall
meet at least once each fiscal quarter and each original holder of Preferred
Stock so long as it holds Investor Securities originally purchased at an
aggregate cost of at least $1,000,000 shall be notified at least 10 days in
advance of such regular meetings of the Board of Directors and each such
original holder shall have the right to have a representative attend all
such meetings in a nonvoting observer capacity. The Board of Directors shall
establish and maintain an Audit Committee and a Compensation Committee, on
each of which committees there shall be at least one Preferred Director and
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persons who are not employees of the Company shall constitute a majority of
the members.
(b) Directors Expenses. The Company will pay all direct out-of-pocket
expenses reasonably incurred by any Preferred Director in attending each
meeting of the Board of Directors, or any committee thereof. All other
Director fees and incentives shall be subject to the approval of a majority
of the Board of Directors, which majority shall include a majority of the
Preferred Directors.
(c) Indemnity. The Company and each of its Subsidiaries will adopt and
maintain in their respective Charter or Bylaws provisions indemnifying the
directors of each such Person to the fullest extent permitted by applicable
law.
5.2. Information and Reports to be Furnished to Principal Holders. The
Company and its Subsidiaries will maintain a system of accounting in which
correct and complete entries will be made of all dealings and transactions in
relation to their business and affairs in accordance with GAAP. The Company's
internal financial control systems will at all times be reasonably satisfactory
to the Required Holders. The Company will furnish the following information to
each Principal Holder (except as otherwise provided below):
(a) Annual Statements. As soon as available, and in any event within 90
days after the end of each fiscal year of the Company, the audited
consolidated balance sheet of the Company and its Subsidiaries as of the end
of such fiscal year and the audited consolidated statements of income,
stockholders' equity and cash flows for such year of the Company and its
Subsidiaries, together with the consolidated figures for the preceding
fiscal year, if any (all in reasonable detail), such statements being
accompanied by the reports thereon of independent certified public
accountants, reasonably satisfactory to the Required Holders, to the effect
that such consolidated financial statements have been prepared in accordance
with GAAP and present fairly in all material respects the financial position
of the Company and its Subsidiaries as of the dates specified and the
results of their operations and changes in financial position with respect
to the periods specified.
(b) Certificate of Chief Financial Officer. As soon as available, and
in any event within 45 days after the end of each of the first three fiscal
quarters in each fiscal year of the Company, the Company shall deliver a
certificate of the Chief Financial Officer of the Company to the effect that
the Company and its Subsidiaries have complied with all restrictive
covenants contained in Sections 5.4 and 5.5.
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(c) Monthly Reports. As soon as practicable, and in any event within 30
days after the end of each calendar month, the financial statements of the
Company and its Subsidiaries as of the end of such month in the form
customarily prepared by management for internal use, together with a
discussion and analysis of the Company's financial condition and results of
operations as of and for such period.
(d) Notice of Litigation, Defaults. etc. The Company will promptly give
written notice to each Principal Holder of (i) any litigation or any
administrative proceeding to which it or any of its Subsidiaries may
hereafter become a party which after giving effect to applicable insurance
may result in a charge against income in excess of $50,000, (ii) any
resignation of or other change in senior management of the Company or any
serious illness of any member of such senior management, and (iii) any
credible offers to purchase a majority (or greater) interest in the Company
(whether by means of purchase of securities or assets or otherwise). The
Company will promptly, and in any event within seven days after any officer
of the Company or any of its Subsidiaries obtains knowledge of any material
default by the Company under this Agreement, any other Related Agreement or
any other Contractual Obligation, furnish notice to each Principal Holder
specifying the nature of the material default and stating the action the
Company has taken or proposes to take with respect thereto. Promptly after
the receipt thereof, the Company will furnish to each Principal Holder
copies of any reports as to adequacies in accounting controls submitted by
independent accountants. Any notice containing the information contemplated
by this Section 5.2(d) is referred to herein as a "Material Event Notice".
(e) Other Information. From time to time upon the reasonable request of
any Principal Holder, the Company will furnish to any such Principal Holder
such information regarding the business, assets or financial condition of
the Company and its Subsidiaries as it may reasonably request. Each such
Principal Holder shall have the right during normal business hours at
reasonable intervals and upon reasonable notice to examine the books and
records of the Company and its Subsidiaries, to make copies and notes
therefrom, and to make an independent examination of the books and records
of the Company and its Subsidiaries at the expense of such Principal Holder
and in a manner that does not interfere with the business operations of the
Company and its Subsidiaries.
(f) Confidentiality. Each Stockholder will maintain the confidential
nature of information obtained from the Company concerning the Company and
its Subsidiaries; provided, however, that such Stockholder shall not be
precluded from making disclosure regarding such information: (a) to counsel
for any such Stockholder, accountants or other professional advisors on a
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need-to-know basis, (b) to any other Stockholder, (c) as required by
law or applicable regulation (provided that the Stockholder notifies
the Company in advance of any such disclosure and cooperates with the
Company in minimizing the same), (d) to any Person to whom Shares are
proposed to be Transferred in accordance with the provisions hereof so
long as such transferee agrees to be bound by this Section 5.2(f) or
(e) to the extent that such information has become publicly available
other than as a result of the violation of this Section 5.2(f).
5.3. Information and Reports to be Furnished to the Board of Directors. The
Company and its Subsidiaries will furnish to each member of the Board of
Directors of the Company the information below.
(a) Management Letters of Accountants. As soon as available, all
management letters prepared by the Company's independent certified public
accountants and management's written response thereto if any.
(b) Annual Budget. Not later than the end of each fiscal year of the
Company, a proposed month-by-month operating and capital budget for the
following fiscal year of the Company, including projected cash flows.
(c) Notice of Litigation Defaults etc. Promptly, and in any event
within 30 days after the Company has knowledge of such event, a Material
Event Notice to each Director.
(d) SEC Filings. Promptly, and in any event within 15 days after filing
with the SEC, copies of all forms, reports, notices, proxy statements,
registration statements and other documents filed with the SEC.
5.4. Restrictive Covenants Requiring Consent of Required Holders. Without
the consent of the Required Holders (except as otherwise provided below),
neither the Company nor any of its Subsidiaries will:
(a) Issuance of Senior Securities. Authorize or issue, or agree to
authorize or issue, any class or series of capital stock senior to any
Series of Preferred Stock with respect to dividend rights, liquidations
preferences or redemption or repurchase rights.
(b) Restrictive Agreements. Become or remain a party to, or be bound
by, or agree to any amendment or modification of, any Contractual Obligation
that restricts or limits the Company's right to perform its obligations
under this Agreement or the Stock Purchase Agreement.
-17-
(c) Charter Amendment etc. Without the consent of a majority of Shares
of any series of Preferred Stock that is adversely affected, the Company
shall not amend its Charter or By-laws if such amendment would adversely
affect the rights of such series of Preferred Stock.
(d) Merger Consolidation and Sale of Assets. Other than a merger of a
wholly owned Subsidiary of the Company into the Company or another wholly
owned Subsidiary of the Company, become a party to or authorize any merger
or consolidation, or any agreement to sell, lease, or otherwise transfer or
dispose of all or substantially all of its assets, other than sales of
inventory in the normal course of business and transfers of assets among the
Company and its wholly owned Subsidiaries. Notwithstanding anything to the
contrary contained in this Section 5.4(d), in the event that the Required
Holders approve a transaction for which their consent is required by this
Section 5.4(d), and the transaction would result in the consideration to be
received by the holders of Series D Preferred Stock of less than the
internal rate of return as set forth in and calculated in accordance with
Schedule C through December 31, 1997 and the internal rate of return as set
forth in and calculated in accordance with Schedule C thereafter, then the
consent of the holders of a majority of the Series D Preferred Stock, voting
as a separate class, shall be required in order for the Company to enter
into any such transaction.
(e) Liquidation. Enter into or authorize any liquidation, dissolution
or winding up.
5.5. Restrictive Covenants Requiring Consent of Board of Directors. Without
the approval of the Board of Directors, with at least a majority of the
Preferred Directors voting in favor, neither the Company nor any of its
Subsidiaries shall:
(a) Distributions. Make any Distribution except (i) any Subsidiary may
make Distributions to the Company or to any wholly owned Subsidiary which is
its immediate parent, (ii) the Company may repurchase shares of Preferred
Stock in accordance with the Company's Charter, (iii) the Company may
repurchase shares of Common Stock from its employees at cost or fair market
value upon termination of employment, (iv) the Company may make the
repurchase contemplated in the Exchange Agreements and the Repurchase
Agreement.
(b) Amendment of Employee Plans. Amend any stock or stock option plan
or other material employee benefit plan or arrangement in any material
respect.
(c) Transaction with Affiliates. Except for transactions expressly
contemplated by the Related Agreement or disclosed in a schedule to the
-18-
Purchase Agreement, effect or remain obligated with respect to any
transaction with any Affiliate (other than with the Company or any
wholly owned Subsidiary of the Company) or any Member of the Immediate
Family of any Affiliate or amend the terms of any such permitted
arrangement.
(d) Line of Business. Not engage in any line of business other than the
business of providing integrated non-hazardous solid waste management
services to commercial, municipal, industrial and residential customers.
5.6. Conduct of Business. Each of the Company and its Subsidiaries will:
(a) Maintenance of Properties, etc. Keep its properties and assets in
such repair, working order and condition, and will from time to time make
such repairs, renewals, replacements, additions and improvements thereto, as
its management deems reasonably necessary and appropriate, and will comply
at all times in all material respects with the provisions of all material
Contractual Obligations (including its Charter, Bylaws and senior bank
credit facility) applicable to it so as to prevent any loss or forfeiture
thereof or thereunder unless compliance therewith is being at the time
contested in good faith by appropriate proceedings, or management considers
it prudent business judgment not to comply, and will do all things necessary
to preserve, renew and keep in full force and effect and in good Standing
its corporate existence and authority necessary to continue its business.
(b) Compliance with Legal Requirements. Comply in all material respects
with all Legal Requirement, as in effect from time to time, applicable to
it, except where compliance therewith shall at the time be contested in good
faith by appropriate proceedings.
(c) Insurance. Keep its assets which are of an insurable character
insured against loss or damage by fire, explosion or other hazards which may
be insured against by extended coverage in an amount sufficient to prevent
it from becoming a co-insurer and in any event not less than 80% of the
insurable value of the property insured, and will maintain insurance against
liability to persons and property and other hazards and risks to the extent
and in the manner customary in the judgment of the Board of Directors of the
Company for companies in similar businesses similarly situated. All such
insurance shall be provided by reputable insurers licensed to write
insurance in the jurisdiction where the insured entity is located; provided,
however, that the Company and its Subsidiaries may effect workers'
compensation insurance or similar coverage with respect to operations in any
particular state or other jurisdiction through an insurance fund operated by
such state or jurisdiction.
-19-
(d) Foreign Qualification. Be qualified as a foreign corporation in
each jurisdition in which it is required to qualify, except for such
jurisdiction in which the failure to be so qualified would not have a
Material Adverse Effect.
5.7. Replacement of Chief Executive. Upon the death, resignation, retirement
or removal of John W. Casella as Chief Executive Officer of the Company, the
Required Holders shall have the right to participate in the search for, and
shall approve (not to be unreasonably withheld), his replacement.
5.8. Ownership of Subsidiary Stock. The Company shall not have any
Subsidiary that is not a wholly owned Subsidiary other than Subsidiaries for
which the Required Holders have provided their written consent, which may not be
unreasonably withheld.
5.9. Compliance with ERISA etc. The Company and its Subsidiaries will meet
all minimum funding requirements imposed by ERISA or the Code (without giving
effect to any waivers of such requirements or extensions of the related
amortization periods which may be granted) and will at all times comply in all
material respects with all other provisions of ERISA and the Code.
5.10. Annual Meeting. Within 180 days after the Company's annual financial
statements are required to be furnished in accordance with Section 5.2(a) and on
not less than 10 days prior written notice, the Company will hold an annual
stockholders meeting. At such annual meeting the principal executive, financial
and operation officers of the Company and its Subsidiaries will present a review
of, and will discuss with those in attendance in reasonable detail, the general
affairs, management, financial condition, results of operation and business
prospects of the Company and its Subsidiaries.
5.11. SBA Requirements. Each of the Company and its Subsidiaries will:
(a) Information. Promptly furnish to the Investors that are SBICs upon
request all forms that may be required to be filed with the SBA from time to
time in connection with the transactions contemplated by the Related
Agreement and such Investors' Ownership of Investor Securities and shall
provide such Investors and the SBA with such other information and forms
(including all information necessary for the Investors to prepare SBA Form
468 and an accompanying assessment of economic impact under 13 CFR
ss.197.304(c)) as such Investors, in their reasonable discretion, or the SBA
may from time to time request with respect to the transactions completed by
this Agreement and such Investors' ownership of Investor Securities. The
Company shall at all times permit any Investor that is an SBIC and, if
necessary, a representative of the SBA, reasonable access to the Company's
-20-
records during normal business hours upon prior notice and the Company shall
provide such information as such Investor or the SBA may reasonably request
in order to verify compliance with this Section 5.11, including an
officer's certificate indicating such compliance.
(b) Compliance: Rescission Right. Not engage in any discriminatory
activities prohibited by 13 CFR parts 112, 113 and 117. The Company will not
use directly or indirectly the proceeds of the issuance and sale of the
Investor Securities for any purpose for which an SBIC is prohibited from
providing funds under 13 CFR ss. 107.901. The Company shall not change its
business activity in any manner which, by reason of such change in business
activity, would render the Company ineligible as a "small business concern"
under the Small Business Investment Act. The Company acknowledges and agrees
that (a) any diversion of the proceeds from their intended use or (b) the
Company's becoming ineligible as a "small business concern" by reason of a
change in the Company's business activity within one year from the closing
under the Purchase Agreement, shall entitle any Investor that constitutes an
SBIC, upon demand, and in addition to any other remedies that may exist, to
immediate rescission of the Related Agreements and repayment in full of the
funds invested by it as contemplated by 13 CFR ss. 107.305 and 13 CFR ss.
107.706.
5.12. Real Property Holding Corporation. If at any time in the future the
Company or any of its Subsidiaries shall become such a "United States real
property holding corporation" as defined in Section 897(c)(2) of the Code and
Treasury Regulation section 1.897-2(b), the Company shall notify each foreign
Investor of such event as promptly as practicable. Within 30 days after receipt
of a request from a foreign Investor, the Company shall prepare and deliver to
such foreign Investor the statement required under Treasury Regulation section
1.897-2(h) and, subject to the succeeding sentence, either or both of the
following documents: (a) an affidavit in conformance with the requirements of
section 1445(b)(3) of the Code and the regulations thereunder or (b) a notarized
statement, executed by an officer having actual knowledge of the fact, that the
Shares held by such foreign Investor are of a class that is regularly traded on
an established securities market, within the meaning of section 1445(b)(6) of
the Code and the regulations thereunder. If the Company is unable to provide
either of the documents described in clauses (a) or (b) above upon request, it
shall promptly, and in any event within 30 days, notify such foreign Investor in
writing of the reason for such inability. Finally, upon the request of a foreign
Investor and without regard to whether either document described in clauses (a)
or (b) above has been requested, the Company shall reasonably cooperate with the
efforts of such foreign Investor to obtain a "qualifying statement" within the
meaning of section 1445(b)(4) of the Code and the regulations thereunder or such
other documents as would excuse a transferee of a foreign Investor's interest
from withholding of income tax imposed pursuant to section 897(a) of the Code.
-21-
6. RIGHTS TO PARTICIPATE IN FUTURE OFFERINGS.
6.1. Right of First Offer. The Company shall not issue or sell any Common
Stock (including securities convertible into, or options, warrants or other
rights to purchase Common Stock, but excluding the shares described in Section
6.7) (collectively, the "Offered Shares") without first providing each
Stockholder and each Other Stockholder the right to subscribe for its
Proportionate Percentage of the Offered Shares at a price and on such other
terms which are at least as favorable as the Company shall have offered or
proposes to offer and which the Company shall have specified in a notice
delivered to each Stockholder and each Other Stockholder (the "Proposal");
provided, however that each Stockholder and each Other Stockholder shall have
the option to purchase Offered Shares for cash, regardless of the form of
consideration the Company proposes. The Proposal by its terms shall remain open
and irrevocable for a period of 30 days from the date it is delivered by the
Company to each Stockholder and each Other Stockholder (the "Exercise Period").
The Proposal shall also certify that the Company either (a) has received a bona
fide offer from a prospective purchaser, who shall be identified in the
Proposal, for consideration having a fair market value set forth in such Offer
or (b) intends in good faith to offer the Offered Shares at the price and on the
terms set forth in such Proposal.
"Proportionage Percentage" means, for any Stockholder or Other Stockholder,
a percentage of Offered Shares covered by the Proposal equal to (i) the number
of shares of Common Stock held by such Stockholder or Other Stockholder (on an
as-converted and as exercised basis) divided by (ii) the total number of shares
of Common Stock outstanding at the time of delivery of the Proposal (assuming
the conversion and exercise of all options, warrants, rights and shares of
capital stock that are convertible into or exercisable for Common Stock).
6.2. Notice. Notice of each Stockholder's or Other Stockholder's intention
to accept the Proposal made pursuant to Section 6.1 shall be evidenced by a
writing signed by such Stockholder or Other Stockholder and delivered to the
Company prior to the end of the Exercise Period (the "Notice of Purchase")
setting forth that portion of the Offered Shares such holder elects to purchase
(the "Accepted Shares").
6.3. Full Acceptance. In the event that all Stockholders and Other
Stockholders elect to purchase all of the Offered Shares offered in the
Proposal, the Company shall sell to each such holder, pursuant to Section 6.6,
the number of Accepted Shares set forth in such holder's Notice of Purchase.
6.4. Partial Acceptance. In the event that one or more Stockholders or Other
Stockholders do not elect to purchase all of the Offered Shares offered in the
Proposal, the Company shall sell to each holder that has so elected to purchase,
pursuant to Section 6.6, the number of Accepted Shares, if any, set forth in
such
-22-
holder's Notice of Purchase. Stockholders or Other Stockholders may purchase any
remaining shares offered in the Proposal not purchased by the other Stockholders
or Other Stockholders pro rata based on their respective Proportionate
Percentages, or as they may otherwise agree.
6.5. No Fractional Shares. For the purpose of avoiding fractions as to
Offered Shares, the Company may adjust upward or downward by not more than one
full share the number of Offered Shares which any Stockholder or Other
Stockholder would otherwise be entitled to purchase.
6.6. Sale of Shares. No later than 30 days after the expiration of the
Exercise Period, the Company shall deliver to each Stockholder and each Other
Stockholder who has submitted a Notice of Purchase to the Company a notice
indicating the number of Offered Shares which the Company shall sell to such
holder pursuant to this Section 6 and the terms and conditions of such sale,
which shall be in all respects (including, without limitation, unit price and
interest rates) the same as specified in the proposal. The sale to such holders
of such Offered Shares shall take place not later than 10 days after receipt of
such notice.
Any sale of Offered Shares that were not selected for purchase by the
Stockholders or Other Stockholders as provided above shall take place not later
than 180 days after the expiration of the Exercise Period. Such sale shall be
upon terms and conditions in all respects (including, without limitation, unit
price and interest rates) which are no less favorable to the Company than those
set forth in the Proposal. Any refused Offered Shares not purchased as
contemplated by the Proposal within the 90-day period specified above shall
remain subject to this Section 6.
6.7. Exclusion of Certain Shares. Notwithstanding any contrary provision of
this Section 6, Offered Shares shall not include (i) shares of Common Stock
issuable upon conversion of the Preferred Stock, (ii) shares of Common Stock
issued or issuable upon exercise of the Warrants (iii) shares of Common Stock
issued or issuable as a dividend or distribution by the Company, (iv) shares of
capital stock issued to employees, officers or directors pursuant to options,
warrants or rights outstanding on the date hereof, pursuant to plans approved by
the Board of Directors or pursuant to arrangements permitted under this
Agreement, (v) shares of capital stock issued as consideration for the
acquisition of a business or (vi) shares of capital stock issued in a
transaction or series of related transactions in which the Company receives
consideration of less than $500,000 and in which the purchase price per share is
not less than the then-applicable conversion price per share of the Series D
Preferred Stock, provided that the aggregate amount of all such transactions
shall not exceed $500,000 per year.
-23-
6.8. Waivers. The parties hereto waive the provisions of Section 4 of the
Amended and Restated Stockholders Agreement dated May 25, 1994, as amended, with
respect to the offer and sale of Series D Convertible Preferred Stock of the
Company, and the issuance of Series A Redeemable Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock, including all notice requirements
relating thereto.
7. LEGEND. Each certificate evidencing Shares shall contain the following
legend:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
TRANSFER RESTRICTIONS AS SET FORTH IN A STOCKHOLDERS AGREEMENT DATED AS OF
DECEMBER 22,1995 A COPY OF WHICH IS ON FILE IN THE OFFICES OF THE
CORPORATION ON AND WILL BE FURNISHED TO THE HOLDER HEREOF WITHOUT CHARGE
UPON WRITTEN REQUEST
8. TERMINATION. This Agreement shall terminate upon the first to occur of (i) a
Qualified Offering or (ii) any merger or consolidation of the Company into or
with another corporation (except one in which the holders of the capital stock
of the Corporation immediately prior to such merger or consolidation continue to
hold, directly or indirectly, more than 50% by voting power of the capital stock
of the surviving corporation), or the sale of all or substantially all the
assets of the Company.
9. GENERAL.
9.1. Remedies. The parties shall have all remedies for breach of this
Agreement available to them provided by law or equity. Without limiting the
generality of the foregoing, in addition to all other rights and remedies
available at law or in equity, the parties shall be entitled to obtain specific
performance of the obligations of each party to this Agreement and immediate
injunctive relief. In the event any action or proceeding is brought in equity to
enforce the same, neither the Company nor any party will urge, as a defense,
that an adequate remedy at law exists.
9.2. Notices. All notices or other communications required or permitted to
be delivered hereunder shall be in writing and shall be delivered to each of the
parties at their respective addresses as set forth in Schedules A or B.
Any party to this Agreement may at any time change the address to which
notice to such party shall be delivered by giving notice of such change to the
other parties and such notice shall be deemed given when received by the other
parties. Notices shall be deemed effectively given when personally delivered or
sent to the
-24-
recipient at the address set forth above by telex or a facsimile transmission,
one business day after having been delivered to a receipted, nationally
recognized courier, properly addressed or five business days after having been
deposited into the United States mail, postage prepaid, provided, that any
notice to any party outside of the United States shall be sent by telecopy and
confirmed by overnight or two-day courier.
9.3. Amendments, Waiver and Consents. Any provision in this Agreement to the
contrary notwithstanding, changes in or additions to this Agreement may be made,
and compliance with any covenant or provision herein set forth may be omitted or
waived, if the Company (a) shall obtain consent thereto in writing from the
Required Holders and (b) shall, in each such case, deliver copies of such
consent in writing to any parties who did not execute the same.
9.4. Binding Effect: Assignment. This Agreement shall be binding upon and
inure to the benefit of the personal representatives, successors and assigns of
the respective parties hereto. The Company shall not have the right to assign
its rights or obligations hereunder or any interest herein without obtaining the
prior written consent of the Required Holders. The Covered Stockholders and the
Investors may assign or transfer their rights under this Agreement to the extent
permitted herein and by the other agreements between the respective parties and
the Company. Each of BCI, NAF and VVCF may transfer its rights to designate a
member of the Board of Directors of the Company pursuant to Section 4.1 hereof
so long as such transfer of rights is accompanied by a Transfer of 50% of the
Warrants held by such Investor immediately after the Closing (as defined in the
Purchase Agreement) after giving effect to the transactions contemplated by the
Related Agreements; provided, however, that neither BCI, VVCF nor NAV may
transfer any rights to designate a member of the Board of Directors to any
Person in a business similar to that engaged in by the Company. The holders of
Series D Preferred Stock shall cease to have the right to designate a Director
pursuant to Section 4.1 at such time as a majority of the Shares of Series D
Preferred Stock is owned by a Person in a business similar to that engaged in by
the Company.
9.5 Severability. If any provision of this Agreement shall be found by any
court of competent jurisdiction to be invalid or unenforceable, the parties
waive such provision to the extent that it is found to be invalid or
unenforceable. Such provision shall, to the maximum extent allowable by law, be
modified by such court so that it becomes enforceable and, as modified, shall be
enforced as any other provision hereof, all the other provisions hereof
continuing in full force and effect.
9.6. Entire Agreement. This Agreement and the Related Agreements constitute
the entire agreement of the parties with respect to the subject matter hereof
and thereof and supersede all prior and contemporaneous understandings, whether
written or oral, including without limitation, the Amended and Restated
Stockholders
-25-
Agreement, dated May 25, 1994, as amended, by and among the Company and the
Stockholders Party thereto.
9.7. Counterparts. This Agreement may be executed in counterparts, all of
which together shall constitute one and the same instrument.
9.8. Headings. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
9.9. Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws (other than the conflict of laws rules) of The
Commonwealth of Massachusetts.
The parties hereto have executed this Agreement under seal as of the date
first above written.
CASELLA WASTE SYSTEMS, INC.
By _________________________
Title:
NORWEST EQUITY PARTNERS V
By: Itasca Partners
By_________________________
Title:
WESTON PRESIDIO CAPITAL II, L.P.
By: Weston Presidio Capital Management, II, L.P.
Its General Partner
By__________________________
Title:
-26-
BCI GROWTH III, L.P.
By: Teaneck Associates
Its General Partner
By________________________
Donald P. Remey
General Partner
EDWARD V. SCHWIEBERT, TRUSTEE
FOR BLAKE ELIZABETH BOHLIG
TRUST FUND #1 U/T/A DATED
DECEMBER __, 1995
By: _____________________________
Edward V. Schwiebert, Trustee
EDWARD V. SCHWIEBERT, TRUSTEE
FOR CHRISTOPHER JAMES BOHLIG
TRUST FUND #1 U/T/A DATED
DECEMBER__ 1995
By: ______________________________
Edward V. Schwiebert, Trustee
HARRY R. RYAN, III, TRUSTEE
FOR ELIZABETH ASHLEY CASELLA
TRUST FUND #1 U/T/A DATED
DECEMBER __,1995
By: _______________________________
Harry R. Ryan, III, Trustee
HARRY R. RYAN, III, TRUSTEE
FOR JOHN WILLIAM CASELLA, II
TRUST FUND #1 U/T/A DATED
DECEMBER__, 1995
By: _______________________________
Harry R. Ryan, H, Trustee
-27-
HARRY R. RYAN, III, TRUSTEE
FOR LAUREN ELIZABETH CASELLA
TRUST FUND #1 U/T/A DATED
DECEMBER_,1995
By:
---------------------------------
Harry R. Ryan, III, Trustee
NORTH ATLANTIC VENTURE FUND, L.P.
By: North Atlantic Capital Partners, L.P.
Its General Partner
By
---------------------------------
Title:
VERMONT VENTURE CAPITAL FUND, L.P.
By: Vermont Venture Capital Partners, L.P.
Its General Partner
By
---------------------------------
Title:
NATIONAL WASTE INDUSTRIES, INC.
By
---------------------------------
Title:
FSC CORP
By
---------------------------------
Mary J. Reilly
Vice President
PRUDENTIAL SECURITIES INCORPORATED
By
---------------------------------
Title:
---------------------------------
Thomas S. Shattan
-28-
--------------------------
John W Casella
--------------------------
Douglas R. Casella
--------------------------
James W. Bohlig
--------------------------
Stephen W. Houghton
--------------------------
Richard H. Lindgren
--------------------------
Robert J. Lynch, Jr.
--------------------------
John F. Chapple
--------------------------
Marcia DeRosia
JANE O'NElLL RYAN, THOMAS R. RYAN,
DANIEL C. CRANE AND HARRY R. RYAN,
III, TRUSTEES U/T/A DATED MARCH
17,1994, HARRY R. RYAN, III, SETTLOR
By
---------------------------------
Title:
HARRY R. RYAN, III, TRUSTEE
FOR MICHAEL ANTHONY CASELLA
TRUST FUND #1 U/T/A DATED
DECEMBER ___, 1995
By:
---------------------------------
Harry R. Ryan, III, Trustee
-29-
HARRY R. RYAN, III, TRUSTEE
FOR ROBERT LIVlNGSTONE CASELLA
TRUST FUND #1 U/T/A DATED
DECEMBER __, 1995
By:
---------------------------------
Harry R. Ryan, III, Trustee
HARRY R. RYAN, III, TRUSTEE
FOR STEPANIE LEIGH CASELLA
TRUST FUND #1 U/T/A
DATED DECEMBER __,1995
By:
---------------------------------
Harry R. Ryan, III, Trustee
KAREN POTTER AND MATTHEW
POTTER, TRUSTEES FOR JOSEPH
ANTHONY CASELLA TRUST FUND
#1 U/T/A DATED DECEMBER ___ 1995
By:
---------------------------------
Karen Potter, Trustee
By:
---------------------------------
Matthew Potter, Trustee
KAREN POTTER AND MATTHEW
POTTER, TRUSTEES FOR KRISTEN
ANN CASELLA TRUST FUND
#l U/T/A DATED DECEMBER ___ 1995
By:
---------------------------------
Karen Potter, Trustee
By:
---------------------------------
Matthew Potter, Trustee
-30-
SCHEDULE A TO STOCKHOLDERS AGREEMENT
------------------------------------
Management Stockholders
- -----------------------
John W. Casella
Douglas R. Casella
James W. Bohlig
The Bohlig Trusts
The Casella Trusts
SCHEDULE B TO STOCKHOLDERS AGREEMENT
Number of Shares
Investors and Address Held On Date Hereof
- --------------------- -------------------
Weston Presidio Capital II, L.P. 775,370
40 William Street - Suite 300
Wellesley, MA 02181
Telephone: (617) 237-4700
Telecopy: (617) 237-6270
Norwest Equity Partners V 818,227
40 William Street - Suite 305
Wellesley, Massachusetts 02l8l-3902
Telephone: (617) 237-5870
Telecopy: (617) 237-6270
BCI Growth III, L.P. 1,635,795
Glenpoint Centre West
Teaneck, NJ 07666
Telephone: (201) 836-3900
Telecopy: (201) 836-6368
North Atlantic Venture Fund, L.P. 309,972
70 Center Street
Portland, ME 04101
Telephone: (207) 772-4470
Telecopy: (207) 772-3257
Vermont Venture Capital Fund, L.P. 206,648
Corporate Plaza, Suite 600
76 St. Paul Street
Burlington, VT 05401
Telephone: (802) 658-7840
Telecopy: (802) 658-5757
Number of Shares
Investors and Address Held On Date Hereof
- --------------------- -------------------
FSC Corp. 71,429
100 Federal Street
Mail Stop 01-32-01
Boston, MA 02110
Telephone: (617) 434-7890
Telecopy: (617) 434-1153
Prudential Securities Incorporated 8,572
One New York Plaza, 18th Floor
New York, NY 10292-2018
Telephone: (212) 778-1000
Telecopy (212) 778-5718
Thomas S Shattan 5,714
930 Park Avenue
New York, NY 10028
Telephone: (212) 734-8218
Telecopy: (212) 734-8218
B-2
SCHEDULE C TO STOCKHOLDERS AGREEMENT
------------------------------------
Internal Rate of Return (as defined below) through December 31, 1997
- --------------------------------------------------------------------
Internal Rate of Return after December 31, 1997
- -----------------------------------------------
Calculation of Internal Rate of Return
- --------------------------------------
B-3
1995 REGISTRATION RIGHTS AGREEMENT
This Agreement dated as of December __, 1995 is entered into by and among
Casella Waste Systems, Inc., a Delaware corporation (the "Company"), the persons
listed on Schedule I attached hereto (the "Purchasers") and the persons listed
on Schedule II attached hereto (the "Management Stockholders").
WHEREAS, the Company, the Purchasers and the Management Stockholders desire
to provide for certain arrangements with respect to the registration of shares
of capital stock of the Company under the Securities Act of 1933;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Certain Definitions.
--------------------
As used in this Agreement, the following terms shall have the following
respective meanings:
"Commission" means the Securities and Exchange Commission, or any other
Federal agency at the time administering the Securities Act.
"Common Stock" means the Class A Common Stock, $.0l par value per share, of
the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Prudential Warrant" means the Class A Common Stock Purchase Warrant for
96,108 shares issued to Prudential Securities Incorporated, dated as of the date
hereof.
"Registration Statement" means a registration statement filed by the Company
with the Commission for a public offering and sale of Common Stock (other than a
registration statement on Form S-8 or Form S-4, or their successors, or any
other form for a similar limited purpose, or any registration statement covering
only securities proposed to be issued in exchange for securities or assets of
another corporation).
"Registration Expenses" means the expenses described in Section 5.
1
"Registrable Shares" means (i) with respect to the Purchasers other than
Prudential Securities Incorporated, the shares of Common Stock issued or
issuable upon conversion of the Shares or upon the exercise of the Warrants,
(ii) with respect to the Management Stockholders, the shares of Common Stock
held by them or issuable upon conversion of the Class B Common Stock of the
Company held by them, (iii) with respect to the holder of the Prudential
Warrant, the shares of Common Stock issued or issuable upon exercise of the
Prudential Warrant, or (iv) any other shares of Common Stock issued in respect
of such shares (because of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events); provided, however, that shares of Common
Stock which are Registrable Shares shall cease to be Registrable Shares (i) upon
any public sale pursuant to a Registration Statement or Rule 144 under the
Securities Act or (ii) upon any sale in any manner to a person or entity which,
by virtue of Section 14 of this Agreement, is not entitled to the rights
provided by this Agreement. Wherever reference is made in this Agreement to a
request or consent of holders of a certain percentage of Registrable Shares, the
determination of such percentage shall include shares of Common Stock issuable
upon conversion of the Shares even if such conversion has not yet been effected.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Shares" shall mean the Company's Series D Convertible Preferred Stock.
"Stockholders" means the Purchasers and any persons or entities to whom the
rights granted under this Agreement are transferred by any Purchasers, their
successors or assigns pursuant to Section 14 hereof.
"Warrants" means the warrants dated July 26, 1993 and May 25, 1994 held
by certain Purchasers.
2. Required Registrations.
-----------------------
(a) At any time after the earlier of the second anniversary of the date
hereof or 180 days following the closing of the Company's first underwritten
public offering of shares of Common Stock pursuant to a Registration Statement
(the "First Eligible Demand Registration Date"), a Stockholder or Stockholders
(other than the holder of the Prudential Warrant) holding in the aggregate more
than 50% of the Registrable Shares may request, in writing, that the Company
effect the registration of Registrable Shares owned by such Stockholder or
Stockholders having an aggregate anticipated offering price of at least
$5,000,000 (based on the then current market price or fair value). If the
holders initiating the registration intend to distribute the Registrable Shares
by means of an underwriting, they shall so advise the Company in their request.
In the event such registration is underwritten, the right of other
2
Stockholders and Management Stockholders to participate shall be conditioned on
such person's participation in such underwriting (provided that the terms of the
underwriting are consistent with this Agreement). Upon receipt of any such
request, the Company shall promptly give written notice of such proposed
registration to all Stockholders and to the Management Stockholders. Such
Stockholders and Management Stockholders shall have the right, by giving written
notice to the Company within 10 days after the Company provides its notice, to
elect to have included in such registration such of their Registrable Shares as
such Stockholders and Management Stockholders may request in such notice of
election; provided that if the underwriter (if any) managing the offering
determines that, because of marketing factors, all of the Registrable Shares
requested to be registered by all Stockholders and Management Stockholders may
not be included in the offering, then all Stockholders and Management
Stockholders who have requested registration shall participate in the
registration pro rata based upon their total ownership of shares of Common Stock
(giving effect to the conversion into Common Stock of all securities convertible
thereinto). Thereupon, subject to the foregoing, the Company shall, as
expeditiously as possible, use its best efforts to effect the registration of
all Registrable Shares which the Company has been requested to so register.
Notwithstanding anything to the contrary contained herein, no request may be
made under this Section 2 within 180 days after the effective date of a
Registration Statement filed by the Company covering an underwritten public
offering.
(b) The Company shall not be required to effect more than two registrations
pursuant to paragraph (a) above; provided, however, that a registration shall
not count for such purposes if the aggregate number of Registrable Shares which
constitutes Common Stock issued or issuable upon conversion of the Series D
Convertible Preferred Stock constitutes less than 25% of the aggregate
Registrable Shares included in the offering.
(c) If at the time of any request to register Registrable Shares pursuant to
this Section 2, the Company is engaged or has fixed plans to engage within 30
days of the time of the request in a registered public offering as to which the
Stockholders may include Registrable Shares pursuant to Section 3 or is engaged
in any other activity which, in the good faith determination of the Company's
Board of Directors, would be adversely affected by the requested registration to
the material detriment of the Company, then the Company may at its option direct
that such request be delayed for a period not in excess of six months from the
effective date of such offering or the date of commencement of such other
material activity, as the case may be, such right to delay a request to be
exercised by the Company not more than once in any two-year period.
3
3. Incidental Registration.
------------------------
(a) Whenever the Company proposes to file a Registration Statement (other
than pursuant to Section 2) at any time and from time to time, it will, prior to
such filing, give written notice to all Stockholders and Management Stockholders
of its intention to do so and, upon the written request of Stockholders and/or
Management Stockholders given within 10 days after the Company provides such
notice (which request shall state the intended method of disposition of such
Registrable Shares), the Company shall use its best efforts to cause all
Registrable Shares which the Company has been requested by such Stockholders
and/or Management Stockholders to register to be registered under the Securities
Act to the extent necessary to permit their sale or other disposition in
accordance with the intended methods of distribution specified in the request of
such Stockholders and/or Management Stockholders; provided that the Company
shall have the right to postpone or withdraw any registration effected pursuant
to this Section 3 without obligation to any Stockholder.
(b) In connection with any registration under this Section 3 involving an
underwriting, the Company shall not be required to include any Registrable
Shares in such registration unless the holders thereof accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it (provided that such terms must be consistent with this Agreement). If in the
opinion of the managing underwriter it is appropriate because of marketing
factors to limit the number of Registrable Shares to be included in the
offering, then the Company shall be required to include in the registration only
that number of Registrable Shares, if any, which the managing underwriter
believes should be included therein; provided that no persons or entities other
than the Company, the Stockholders, the Management Stockholders and persons or
entities holding registration rights granted in accordance with Section 10
hereof shall be permitted to include securities in the offering. If the number
of Registrable Shares to be included in the offering in accordance with the
foregoing is less than the total number of shares which the holders of
Registrable Shares have requested to be included, then the holders of
Registrable Shares who have requested registration and other holders of
securities entitled to include them in such registration shall participate in
the registration pro rata based upon their total ownership of shares of Common
Stock (giving effect to the conversion into Common Stock of all securities
convertible thereinto). If any holder would thus be entitled to include more
securities than such holder requested to be registered, the excess shall be
allocated among other requesting holders pro rata in the manner described in the
preceding sentence.
(c) Notwithstanding anything to the contrary contained in this Section 3, in
connection with any registration under this Section 3 involving an underwriting,
in the event that a Stockholder and/or Management Stockholder does not elect to
sell his, her or its Registrable Shares to the underwriters in connection with
such offering,
4
such holder shall refrain from selling such Registrable Shares so registered
pursuant to this Section 3 during the period of distribution of the Company's
securities by such underwriters and the period in which the underwriting
syndicate participates in the aftermarket; provided however, that such holder
shall, in any event, be entitled to sell its Registrable Shares in connection
with such registration commencing on the 90th day after the effective date of
such registration statement.
4. Registration Procedures. If and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect the registration
of any of the Registrable Shares under the Securities Act, the Company shall:
(a) file with the Commission a Registration Statement with respect to such
Registrable Shares and use its best efforts to cause that Registration Statement
to become and remain effective;
(b) as expeditiously as possible prepare and file with the Commission any
amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective, in the case of a firm commitment underwritten
public offering, until each underwriter has completed the distribution of all
securities purchased by it and, in the case of any other offering, until the
earlier of the sale of all Registrable Shares covered thereby or 120 days after
the effective date thereof;
(c) as expeditiously as possible furnish to each selling Stockholder and
Management Stockholder such reasonable numbers of copies of the prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as the selling Stockholder and
Management Stockholder may reasonably request in order to facilitate the public
sale or other disposition of the Registrable Shares owned by the selling
Stockholder or Management Stockholder;
(d) as expeditiously as possible use its best efforts to register or qualify
the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Stockholders and
Management Stockholders shall reasonably request, and do any and all other acts
and things that may be necessary or desirable to enable the selling Stockholders
and Management Stockholders to consummate the public sale or other disposition
in such states of the Registrable Shares owned by the selling Stockholder or
Management Stockholder; provided, however, that the Company shall not be
required in connection with this paragraph (d) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction;
(e) in connection with an underwritten public offering, to furnish to each
selling Stockholder a signed counterpart, addressed to all such selling
Stockholders,
5
of an opinion of counsel for the Company experienced in securities law matters
covering substantially the same matters with respect to the registration
statement and the prospectus as are customarily covered in opinions of issuer's
counsel delivered to underwriters in underwritten public offerings of
securities;
(f) use its best efforts to comply with all applicable rules and regulations
of the Commission and make available to its security holders, as soon as
reasonably practicable, an earnings statement of the Company (in form complying
with the provisions of Rule 158 under the Securities Act) covering the period of
at least 12 months beginning with the first month following the effective date
of the registration statement; and
(g) use its best efforts to either list the shares of Common Stock on a
national securities exchange or have them designated as national market system
securities by the National Association of Securities Dealers, Inc.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and Management Stockholders and after having done so the
prospectus is amended to comply with the requirements of the Securities Act, the
Company shall promptly notify the selling Stockholders and Management
Stockholders and, if requested, the selling Stockholders and Management
Stockholders shall immediately cease making offers of Registrable Shares and
return all prospectuses to the Company. The Company shall promptly provide the
selling Stockholders and Management Stockholders with revised prospectuses and,
following receipt of the revised prospectuses, the selling Stockholders and
Management Stockholders shall be free to resume making offers of the Registrable
Shares.
5. Allocation of Expenses. The Company will pay all Registration Expenses of
all registration under Section 2; provided, however, that if a registration
under Section 2 is withdrawn at the request of the Stockholders requesting such
registration and if the requesting Stockholders elect not to have such
registration counted as a registration requested under Section 2, the requesting
Stockholders shall pay the Registration Expenses of such registration pro rata
in accordance with the number of their Registrable Shares included in such
registration. The Company, the requesting Stockholders and any other persons or
entities holding registration rights granted in accordance with Section 10
hereof shall pay all Registration Expenses of all registrations under Section 3
pro rata in accordance with the number of their shares included in the offering.
For purposes of this Section 5, the term "Registration Expenses" shall mean all
expenses incurred by the Company in complying with this Agreement, including,
without limitation, all registration and filing fees, exchange listing fees,
printing expenses, fees and expenses of counsel for the Company and the fees and
expenses of one counsel selected by the selling Stockholders to represent the
selling Stockholders, state Blue Sky fees and expenses, and the expense of any
special audits incident to or required by any such registration, but excluding
underwriting
6
discounts, selling commissions and the fees and expenses of selling
Stockholders' own counsel (other than the counsel selected to represent all
selling Stockholders).
6. Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable Shares under
the Securities Act pursuant to this Agreement, the Company will indemnify and
hold harmless the seller of such Registrable Shares, its partners, directors,
officers and employees and fund manager or fiduciary (which persons shall be
deemed to be included in the term seller in this Section 6(a)) each underwriter
of such Registrable Shares, and each other person, if any, who controls such
seller or underwriter within the meaning of the Securities Act or the Exchange
Act against any losses, claims, damages or liabilities, joint or several, to
which such seller, underwriter or controlling person may become subject under
the Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Company will reimburse such seller, underwriter
and each such controlling person for any legal or any other expenses reasonably
incurred by such seller, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or final prospectus, or any such amendment or supplement,
in. reliance upon and in conformity with information furnished to the Company,
in writing, by or on behalf of such seller, underwriter or controlling person
specifically for use in the preparation thereof.
(b) In the event of any registration of any of the Registrable Shares under
the Securities Act pursuant to this Agreement, each seller of Registrable
Shares, severally and not jointly, will indemnify and hold harmless the Company,
each of its directors and officers and each underwriter (if any) and each
person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
7
untrue statement of a material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information relating to such seller furnished in writing
to the Company by or on behalf of such seller Specifically for use in connection
with the preparation of such Registration Statement, prospectus, amendment or
supplement; provided, however, that the obligations of each Stockholder and
Management Stockholder hereunder shall be limited to an amount equal to the
proceeds to such Stockholder or Management Stockholder of Registrable Shares
sold in connection with such registration.
(c) Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 6. The Indemnified Party may participate in such
defense at such party's expense; provided, however, that the Indemnifying Party
shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Shares exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 6 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case
8
notwithstanding the fact that this Section 6 provides for indemnification in
such case, or (ii) contribution under the Securities Act may be required on the
part of any such selling Stockholder or any such controlling person or a
Management Stockholder in circumstances for which indemnification is provided
under this Section 6; then, in each such case, the Company and such Stockholder
or Management Stockholder will contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after contribution from
others) in such proportion as is appropriate to reflect the relative fault of
the holder of Registrable Shares and the Company as well as any other equitable
considerations including, without limitation, the parties' relative knowledge
and access to information concerning the matter with respect to which any claim
is asserted and the opportunity to correct and prevent any such statement or
omission resulting in such loss, claim, damage or liability; provided, however,
that, in, any such case, (A) no such holder will be required to contribute any
amount in excess of the proceeds to it of all Registrable Shares sold by it
pursuant to such Registration Statement, and (B) no person or entity guilty of
fraudulent misrepresentation, within the meaning of Section 11(f) of the
Securities Act, shall be entitled to contribution from any person or entity who
is not guilty of such fraudulent misrepresentation.
7. Procedures with Respect to Underwritten Offering. In the event that
Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Section 2, the Company agrees to enter into an
underwriting agreement containing customary representations and warranties with
respect to the business and operations of an issuer of the securities being
registered and customary covenants and agreements to be performed by such
issuer, including without limitation the indemnification and contribution
provisions of Section 6 and any other customary provisions with respect to
indemnification by the Company of the underwriters of such offering. Whenever a
registration is for an underwritten offering pursuant to Section 2, the Company
will have the right to select the managing underwriter or underwriters for the
offering, which selection shall be subject to the approval of the holders of a
majority of the Registrable Shares requesting the offering.
8. Information by Holder. Each Stockholder and Management Stockholder
including Registrable Shares in any registration shall furnish to the Company
such information regarding such Stockholder or Management Stockholder and the
distribution Proposed by such Stockholder or Management Stockholder as the
Company may reasonably request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this
Agreement.
9. "Stand-Off" Agreement. Each Stockholder and Management Stockholder, if
requested by the Company and the managing underwriter of an offering by the
Company of Common Stock or other securities of the Company pursuant to a
Registration Statement, shall agree not to sell publicly or otherwise
9
transfer or dispose of any Registrable Shares of the Company held by such
Stockholder for the Period of time beginning 20 days prior to and ending 180
days (in the case of an initial public offering), or 120 days (in the case of a
public offering following the initial public offering) after the effective date
of the Registration Statement; provided, that (i) all Stockholders holding not
less than the number of shares of Common Stock held by such Stockholder
(including shares of Common Stock issuable upon the conversion of Shares, or
other convertible securities, or upon the exercise of options, warrants or
rights) and all officers and directors of the Company enter into similar
agreement and (ii) all Stockholders and Management Stockholders shall be
released from such Stand-off agreement, if any Stockholders or Management
Stockholders are released, on a pro rata basis, with no Stockholder or
Management Stockholder having any right to offer and sell Registrable Shares
free from such stand-off provisions before any other Stockholder or Management
Stockholder.
10. Limitations on Subsequent Registration Rights. The Company shall not,
without the prior written consent of Stockholders holding more than 50% of the
Registrable Shares, enter into any agreement (other than this Agreement) with
any holder or prospective holder of any securities of the Company which would
allow such holder or prospective holder (a) to include securities of the Company
in any Registration Statement, unless under the terms of such agreement, such
holder or prospective holder may include such securities in any such
registration only on terms substantially similar to the terms on which holders
of Registrable Shares may include shares in such registration, or (b) to make a
demand registration which could result in such registration statement being
declared effective prior to the First Eligible Demand Registration Date.
11. Rule 144 Requirements. After the earliest of (i) the closing of the sale
of securities of the Company pursuant to a Registration Statement, (ii) the
registration by the Company of a class of securities under Section 12 of the
Exchange Act, or (iii) the issuance by the Company of an offering circular
pursuant to Regulation A under the Securities Act, the Company agrees to:
(a) comply with the requirements of Rule 144(c) under the Securities Act
with respect to current public information about the Company;
(b) use its best efforts to file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) furnish to any holder of Registrable Shares upon request (i) a written
statement by the Company as to its compliance with the requirements of said Rule
144(c), and the reporting requirements of the Securities Act and the Exchange
Act (at
10
any time after it has become subject to such reporting requirements), (ii) a
copy of the most recent annual or quarterly report of the Company, and (iii)
such other reports and documents of the Company as such holder may reasonably
request to avail itself of any similar rule or regulation of the Commission
allowing it to sell any such securities without registration.
12. Mergers, Etc. The Company shall not, directly or indirectly, enter into
any merger, consolidation or reorganization in which the Company shall not be
the surviving corporation unless the proposed surviving corporation shall, prior
to such merger, consolidation or reorganization, agree in writing to assume the
obligations of the Company under this Agreement, and for that purpose references
hereunder to "Registrable Shares" shall be deemed to be references to the
securities which the Stockholders and/or Management Stockholders would be
entitled to receive in exchange for Registrable Shares under any such merger,
consolidation or reorganization; provided, however, that the provisions of this
Section 12 shall not apply in the event of any merger, consolidation or
reorganization in which the Company is not the surviving corporation if all
Stockholders and Management Stockholders are entitled to receive in exchange for
their Registrable Shares consideration consisting solely of (i) cash, (ii)
securities of the acquiring corporation which may be immediately sold to the
public without registration under the Securities Act, or (iii) securities of the
acquiring corporation which the acquiring corporation has agreed to register
within 90 days of completion of the transaction for resale to the public
pursuant to the Securities Act.
13. Termination. All of the Company's obligations to register Registrable
Shares under this Agreement (and the obligations of the Stockholders and
Management Stockholders to execute a stand-off agreement) shall terminate on the
fourth anniversary of the closing of the Company's first underwritten public
offering of shares of Common Stock pursuant to a Registration Statement.
14. Transfers of Rights. This Agreement, and the rights and obligations of
each Purchaser hereunder, may be assigned by such Purchaser to any person or
entity to which at least 350,000 Shares are transferred by such Purchaser, and
such transferee shall be deemed a "Purchaser" for purposes of this Agreement;
provided that the transferee provides written notice of such assignment to the
Company.
15. Warrants. In connection with any underwritten public offering including
any Shares which are issuable upon exercise of the Warrants, the holders of the
Warrants may, with the consent of the managing underwriters, sell the Warrants
to the underwriters for exercise and sale of the Registrable Shares issuable
upon exercise thereof.
11
16. General.
--------
(a) Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid:
If to the Company, at 25 Greens Hill Lane, Box 866, Rutland, VT 05702,
Attention: President, or at such other address or addresses as may have been
furnished in writing by the Company to the Stockholders and the Management
Stockholders, with a copy to 02109; or Jeffrey A. Stein, Esq., Hale and Dorr, 60
State Street, Boston, MA; 02109; or
If to a Stockholder or a Management Stockholder, at his or its address set
forth on Exhibit A, or at such other address or addresses as may have been
furnished to the Company in writing by such person, with a copy (in the case of
notices to Purchasers to: Keith F. Higgin, Esq., Ropes & Gray, One International
Place, Boston, MA 02110.
Notices provided in accordance with this Section 15(a) shall be deemed
delivered upon personal delivery or two business days after deposit in the mail.
(b) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter. Without limiting the generality of the foregoing, this Agreement
amends and restates and supersedes in its entirety the Amended and Restated
Registration Rights Agreement dated May 25, 1994, which shall be of no further
force or effect.
(c) Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the holders of more than 50% of the
Registrable Shares; provided, that this Agreement may be amended with the
consent of the holders of less than all Registrable Shares only in a manner
which affects all Registrable Shares in the same fashion. No waivers of or
exceptions to any term, condition or provision of this Agreement, in any one or
more instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or Provision.
(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
12
(e) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
Executed as of the date first written above.
COMPANY:
CASELLA WASTE SYSTEMS, INC.
By:
-----------------------------------
Title:
-----------------------------------
PURCHASERS:
NORWEST EQUITY PARTNERS
V, A MINNESOTA
LIMITED PARTNERSHIP
By:
-----------------------------------
Ernest C. Parizeau
General Partner
WESTON PRESIDIO
CAPITAL II, L.P.
By:
-----------------------------------
Michael F. Cronin,
General Partner
13
BCI GROWTH, L.P.
By:
-----------------------------------
Donald P. Remey
General Partner
THE VERMONT VENTURE
CAPITAL FUND, L.P.
By:
-----------------------------------
Gregory B. Peters,
General Partner
NORTH ATLANTIC VENTURE FUND
By:
-----------------------------------
Gregory B. Peters,
General Partner
PRUDENTIAL SECURITIES
INCORPORATED
By:
-----------------------------------
-----------------------------------
Thomas S. Shattan
-----------------------------------
John W. Casella
-----------------------------------
Douglas Casella
14
-----------------------------------
James W. Bohlig
FSC Corp.
By:
-----------------------------------
15
Schedule I
----------
List of Purchasers
NORWEST EQUITY PARTNERS
V, A MINNESOTA
LIMITED PARTNERSHIP
WESTON PRESIDIO
CAPITAL II, L.P.
BCI GROWTH, L.P.
THE VERMONT VENTURE
CAPITAL FUND, L.P.
NORTH ATLANTIC VENTURE FUND
PRUDENTIAL SECURITIES INCORPORATED
THOMAS S. SHATTAN
FSC CORP.
16
Schedule II
-----------
List of Management Stockholders
Douglas R. Casella
John W. Casella
James W. Bohlig
17
Exhibit 10.9
1995 REPURCHASE AGREEMENT
This 1995 Repurchase Agreement (the "Repurchase Agreement"), is among
CASELLA WASTE SYSTEMS, INC., a Delaware corporation (the "Company"), BCI GROWTH
III, L.P., a Delaware limited partnership ("BCI"), THE VERMONT VENTURE CAPITAL
FUND, L.P., a Vermont limited partnership ("VVCF") and NORTH ATLANTIC VENTURE
FUND, L.P., a Delaware limited partnership ("North Atlantic"). BCI, VVCF and
North Atlantic are sometimes referred to herein separately as a "Warrantholder"
and collectively as the "Warrantholders".
Background
----------
1. The Warrantholders own stock purchase warrants (the "1993 Warrants" and
the "1994 Warrants") to purchase shares (the "1993 Warrant Shares" and the "1994
Warrant Shares") of Class A Common Stock, $.01 par value (the "Class A Common
Stock"), of the Company. Collectively, the 1993 Warrants and the 1994 Warrants
are sometimes hereinafter referred to as the "Warrants"; and the 1993 Warrant
Shares and the 1994 Warrant Shares are sometimes hereinafter referred to as the
"Warrant Shares."
2. The Company and the Warrantholders desire to provide a mechanism for the
sale of the Warrants or the Warrant Shares, as the case may be (the Warrants and
the Warrant Shares being herein referred to collectively as the "Securities"),
by the Warrantholders or any other holder thereof (the Warrantholders and any
such holder being herein referred to individually as a "Holder" and collectively
as the "Holders") to the Company.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree as follows:
Section 1. Put Option. In the event that a Qualified Offering has not
occurred on or prior to December 31, 2000, each of the Holders shall have the
option to tender all or any portion of the Securities held by such Holder to the
Company (the "Put"), by delivering to the Company an instrument in writing (the
"Put Notice") notifying the Company of such Holder's intention to tender to the
Company all or a portion of such Securities. The Company shall immediately
acknowledge receipt of the Put Notice by telex, telegram, telecopy or other
similar electronic device, and confirm such notification by first class mail,
and at such time shall notify all other Holders of its receipt thereof. The Put
Notice shall specify the amount of Securities that the Holder proposes to tender
to the Company (the "Put Securities"). If the Company
receives additional Put Notices from other Holders within ten (10) days of the
receipt of the initial Put Notice, the Company shall consummate all Puts subject
thereto simultaneously.
Section 2. Purchase Price for the Put Securities. The purchase price for Put
Securities which are Warrant Shares shall be equal, for each Warrant Share, to
the greater of (x) the Fair Market Value Per Warrant Share (as hereinafter
defined) as of the date on which the Put Notice shall have been given, or (y)
$1.50 per 1993 Warrant Share or $2.00 per 1994 Warrant Share (subject, in each
case, to appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such shares) (such
amount in this clause (y) being referred to as the "1993 Liquidation Amount" or
the "1994 Liquidation Amount," as the case may be, and the greater of the
amounts in clause (x) or clause (y) being referred to as the "1993 Warrant Share
Purchase Price" or the "1994 Warrant Share Purchase Price," as the case may be).
The purchase price for Put Securities which are 1993 Warrants (the "1993 Warrant
Purchase Price") shall be (for each Warrant Share for which such Warrant is then
exercisable) an amount equal to the 1993 Warrant Share Purchase Price less the
1993 Liquidation Amount. The purchase price for Put Securities which are 1994
Warrants (the "1994 Warrant Purchase Price") shall be (for each Warrant Share
for which such Warrant is then exercisable) an amount equal to the 1994 Warrant
Share Purchase Price less the 1994 Liquidation Amount.
For purposes of this Section, "Fair Market Value Per Warrant Share" means
the fair market value of a share of Class A Common Stock (treating, for purposes
of such determination, the Class B Common Stock as having equal per share voting
rights as the Class A Common Stock). Such determination shall be made by a
nationally known investment banking firm experienced in such valuations
acceptable to the Company and the Holders of a majority of the Put Securities to
be redeemed. If the Company and the Holders of a majority of the Put Securities
to be redeemed are unable to agree on the selection of such an investment
banking firm within thirty (30) days after the date of the Election Notice, then
each of the Company, on the one hand, and the electing Holders, on the other
hand, shall choose one investment banking firm so qualified, and such two firms
shall select a third such firm so qualified. The investment banking firm so
selected shall furnish the Company and the electing Holders with a written
valuation (using one or more valuation methods that such firm, in its best
professional judgment, determines to be most appropriate) within sixty (60) days
of such selection, setting forth its determination of the Fair Market Value Per
Warrant Share. When determining such fair market value, the investment banking
firm shall consider, among other factors, book value, replacement value,
earnings and the value of future cash flows of the Company as an on-going
enterprise, shall consider both the sale of various combinations of the
individual assets of the Company as well as a sale of the Company as a whole,
choosing the manner of sale which maximizes the aggregate value of the assets
being sold, and shall make no deduction, discount or other subtraction
whatsoever for the possible
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minority status of any such holder or for the restrictions on transfer contained
in Section 2 of the 1995 Stockholders Agreement to which the Holders are
subject. The determination of the investment banking firm shall be final and
binding on the Company and the electing Holders. The costs of the valuation
shall be borne equally by the Company, on one hand, and the electing holders, on
the other hand.
Section 3. Payment for the Put Securities.
(a) Within ten days after the determination of the Fair Market Value Per
Warrant Share pursuant to Section 2 above, each Holder shall elect the "Interest
Option" or the "Equity Option".
(b) If the Holder elects the "Interest Option", the Put Securities shall be
deemed to have been purchased in full on the date on which the first payment
therefor is made (the "Put Closing Date"), and on such closing date all rights
of the holder of such Put Securities as a stockholder or warrantholder of the
Company shall cease, except the right to receive the purchase price of such Put
Securities (together with any interest payable thereon) upon presentation and
surrender of the certificate representing such Put Securities, and such Put
Securities will not from and after such closing date, as the case may be, be
deemed to be outstanding. If the Holder elects the Interest Option, the Initial
Investment Amount (if any) for each of the Put Securities shall be paid in eight
(8) equal quarterly installments, commencing on the Put Closing Date, together
with interest on the Initial Investment Amount at a rate equal to 15% per annum
on the Initial Investment Amount. Any amount of the purchase price in excess of
the Initial Investment Amount shall be paid not later than the date on which the
final installment of the Initial Investment Amount is due, together with
interest thereon at a rate equal to the prime rate announced from time to time
by Citibank, N.A. plus two percent (2%) per annum. Such interest shall accrue
from the date of the Put Notice (but not prior to December 31, 2000). For
purposes hereof, the "Initial Investment Amount" for the 1993 Warrant Shares
shall mean $1.50 (subject to appropriate adjustment in the event of any stock
dividend, stock split, combination or other similar recapitalization affecting
such shares); the "Initial Investment Amount" for the 1994 Warrant Shares shall
mean $2.00 (subject to appropriate adjustment in the event of any stock
dividend, stock split, combination or other similar recapitalization affecting
such shares); and the "Initial Investment Amount" for the Warrants shall be
zero. All payments on account of the aggregate purchase price for any Put
Securities shall be deemed to be applied equally to all of the Put Securities to
be redeemed and shall be deemed to be applied first to the payment of the
interest on the Initial Investment Amount; second, to the Initial Investment
Amount; third, to the interest due on the amount of the purchase price for the
Put Securities in excess of the Initial Amount; and fourth, to the amount of the
purchase price for the Put Securities in excess of the Initial Investment
Amount. The Put Closing Date shall be the thirtieth (30th) day after
determination of the purchase price pursuant to Section 2 hereof, as the case
may be, at the Company's
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headquarters, or such other date and place as is mutually agreeable to the
Company and the tendering Holders.
(c) If a Holder elects the "Equity Option", (i) the Company shall purchase,
in eight equal quarterly installments commencing on the Put Closing Date, such
number of the Put Securities as has an aggregate purchase price equal to the
product of (X) the Initial Investment Amount (if any) times (Y) the aggregate
number of Put Securities; and (ii) the Company shall purchase the remaining Put
Securities (if any) no later than the date on which the final purchase of Put
Securities pursuant to clause (i) above is due. The purchase price for all of
the Put Securities pursuant to the Equity Option (whenever purchased) shall be
equal to the amount set forth in Section 2 above. Notwithstanding the foregoing,
at any time prior to the first to occur of (I) the purchase by the Company of
all of the remaining Put Securities held by such Holder; or (II) the exercise by
holders of the Put Securities of their remedies under Section 4.3 of the 1995
Stockholders Agreement among the Company and the stockholders of the Company
dated as of December 22, 1995, any holder of Put Securities who has elected the
Equity Option may revoke the Put Notice with respect to any Put Securities held
by him then outstanding and may repurchase from the Company all Put Securities
previously purchased from such holder by the Company. The price to be paid by
the holder for such Put Securities shall be equal to the price paid by the
Company to the holder for such Put Securities. The Company shall give at least
ten days' notice to the holders of the Put Securities prior to repurchasing any
Put Securities other than in accordance with clause (i) above. No interest shall
be paid on the purchase price of any Put Securities if the Holder elects the
Equity Option with respect thereto.
Section 4. Redemption of Series C Shares held bv North Atlantic; VVCF. The
Company agrees to repurchase an aggregate of 21,429 shares of Series C Preferred
Stock held by North Atlantic and VVCF (in proportion to the number of shares of
Series C Preferred Stock held by them) on each of January 31, 1997, July 31,
1997 and January 31, 1998, at a purchase price of $7.00 per share, upon delivery
of the certificates therefor to the Company.
Section 5. Limitation on Redemption Obligations.
Notwithstanding anything in this Agreement to the contrary, if the funds of
the Company legally available for redemption of the capital stock of the Company
on any date are insufficient to redeem the number of shares of capital stock,
and/or warrants exercisable therefor, then required under this Repurchase
Agreement or under Section 7 or 8 of the Amended and Restated Certificate of
Incorporation of the Company, to be redeemed or repurchased, those funds which
are legally available will be used to redeem the maximum possible number of such
shares of capital stock and/or warrants exercisable therefor ratably on the
basis of the principal amount of the redemption or repurchase price which would
then be payable if the funds of the
-4-
Company legally available therefor had been sufficient to redeem all shares of
capital stock and/or warrants exercisable therefor then required to be redeemed
or repurchased. At any time thereafter when additional funds of the Company
become legally available for the redemption of the capital stock of the Company,
such funds will be used, at the end of the next succeeding fiscal quarter, to
redeem the balance of the shares and/or warrants which the Company was
theretofore obligated to redeem, ratably on the basis set forth in the preceding
sentence.
Section 6. Notices. Except as otherwise expressly provided herein, any and
all notices, consents or other communications provided for herein shall be given
in writing by overnight courier service, registered or certified mail, postage
prepaid, or by telex or telecopy transmission, addressed as follows:
(a) If to the Company: P.O. Box 866
Rutland, VT 05702
Attn: Mr. John W. Casella
Telecopier No.: (802)775-6198
(b) If to the Warrantholders:
BCI Growth III, L.P.: Glenpointe Centre West
Teaneck, NJ 07666
Attn: Mr. Donald P. Remey
General Partner
Telecopier No.: (201)836-6368
The Vermont Venture
Capital Fund, L.P.: Corporate Plaza, Suite 600
76 St. Paul Street
Burlington, VT 05401
Attn: Mr. Gregory B. Peters
Telecopier No.: (802)658-5757
North Atlantic Venture
Fund: 70 Center Street
Portland, ME 04140
Attn: Mr. David M. Coit
Telecopier No: (207)772-3257
or to such other address or addresses as shall have been furnished in writing to
the other parties hereto. All notices hereunder shall be effective on the date
of transmission if transmitted by telex or telecopy, on the first day after
delivery to an overnight national courier service if sent by such service and on
the date of receipt if sent by mail.
-5-
Section 7. Parties in Interest. This Repurchase Agreement is designed to
benefit the Holders, including any third parties acquiring Securities from the
Holders. Accordingly, the Company specifically acknowledges that any third-part
purchaser of the Securities is a beneficiary of this Repurchase Agreement and
entitled to the same rights and privileges as the Warrantholders; provided,
however, that such third party purchaser shall have acquired the Securities in a
transaction in compliance with the provisions of the 1995 Registration Rights
Agreement of even date and the Stockholders Agreement of even date, each among
the Company, the Warrantholders and others.
Section 8. Amendments, Etc. This Repurchase Agreement may be amended,
modified or revoked in whole or in part, but only by a written instrument that
specifically refers to this Repurchase Agreement and expressly states that it
constitutes an amendment, modification or revocation hereof, as the case may be,
and only if such written instrument has been signed by the Company and by
Holders holding in the aggregate at least seventy-five percent (75%) of the
aggregate number of 1993 Warrant Shares and 1994 Warrant Shares and shares
issuable upon exercise of the Warrants; provided, however, that the Holders
agree to vote to amend the provision of this Repurchase Agreement to conform
with similar amendments that may be adopted from time to time to Section C.8(a)
or (b) of Article FOURTH of the Company's Amended and Restated Certificate of
Incorporation.
Section 9. Severability. The provisions of this Repurchase Agreement shall
be applied and interpreted in a manner consistent with each other so as to carry
out the purposes and intent of the parties hereto, but if for any reason any
provision hereof is determined to be unenforceable or invalid, such provision or
such part thereof as may be unenforceable or invalid shall be deemed severed
from this Repurchase Agreement and the remaining provisions carried out with the
same force and effect as if the severed provision or part thereof had not been a
part of this Repurchase Agreement.
Section 10. Expenses. Any expenses incurred in connection with this
Repurchase Agreement, including the enforcement hereof, and the procedure for
selling or purchasing the Securities shall be borne by the Company.
Section 11. LAW GOVERNING. THIS REPURCHASE AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
Section 12. Termination of 1994 Repurchase Agreement and 1994 Pledge
Agreement. VVCF, North Atlantic, BCI and the Company hereby agree that from and
after the date hereof, the Amended and Restated Repurchase Agreement dated May
25, 1994 shall no longer apply or be effective and is terminated, and that the
rights of VVCF, North Atlantic and BCI with respect to the sale of the 1993
Warrants,
-6-
the 1993 Warrant Shares, the 1994 Warrants and the 1994 Warrant Shares to the
Company shall be solely as set forth in this Repurchase Agreement. In addition,
VVCF, North Atlantic, BCI and the Company hereby agree that the Amended and
Restated Pledge Agreement, dated as of May 25, 1994, is hereby terminated.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Repurchase Agreement as of the ___ day of December, 1995.
CASELLA WASTE SYSTEMS, INC.
By:________________________________
President
BCI GROWTH III, L.P.
By: Teaneck Associates
Its General Partner
By:________________________________
Donald P. Remey
General Partner Director
THE VERMONT VENTURE
CAPITAL FUND, L.P.
By: Vermont Venture Capital
Partners, L.P.
Its General Partner
By:_______________________________
Gregory B. Peters
General Partner
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NORTH ATLANTIC VENTURE FUND, L.P.
By: North Atlantic Capital
Partners, L.P.
Its General Partner
By: /s/ Gregory B. Peters
--------------------------------
Gregory B. Peters
General Partner
-8-
MANAGEMENT SERVICES AGREEMENT
This agreement dated as of December 22, 1995 is among Casella Waste Systems,
Inc. (the "Company"), BCI Growth III, L.P. ("BCI"), North Atlantic Venture Fund,
L.P. ("NAV") and Vermont Venture Capital Fund, L.P. ("VVCF"). BCI, NAV and VVCF
are sometimes hereinafter referred to as the "Advisors".
Background
----------
The Advisors are experienced in working with privately held companies
such as the Company and in providing financial advisory services to such
companies for purposes of enhancing shareholder value and positioning such
companies for initial public offerings or sale.
The Company wishes to retain the Advisors to provide such services.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Company and the Advisors hereby agree as
follows:
1. The Advisors shall provide such financial advisory services to the
Company from time to time as the Company may reasonably request in order to
assist the Company in enhancing shareholder value and positioning the Company
for an initial public offering or sale. Such services shall include, without
limitation, the following:
a. reviewing the business and operations of the Company and analyzing its
current and projected financial and operating performance;
b. advising the Company on various financing strategies;
c. evaluating the financing proposals that the Company may consider from
time to time, including formulating negotiation strategy and assisting in
negotiations, as requested;
d. advising the Company on the selection of underwriters and the
appropriate timing for an initial public offering, if requested by the Company;
and
e. assisting and advising the Company on any other matters related to the
closing of any financing transaction in which the Company may be engaged.
2. In consideration of the Advisors' agreement to provide the foregoing
services, the Company shall pay to the Advisors a mutually acceptable fee. Such
fee
-1-
shall be allocated among the Advisors in such proportions as they may agree
among themselves and shall be payable only upon the following events:
a. Upon the closing of the sale of shares of Class A Common Stock of the
Company at a price at least equal to 175% of the then applicable Conversion
Price of the Series D Preferred Stock (as defined in the Company's Amended and
Restated Certificate of Incorporation) in a public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
resulting in at least $20 million of gross proceeds to the Corporation;
b. Upon (i) a merger or consolidation of the Company with or into any
other corporation or corporations, other than (a) a merger of consolidation of a
subsidiary of the Company with or into the Company or with or into any other
subsidiary or (b) a merger in which the Company is the surviving corporation and
which does not result in more than 50% of any class of the capital stock of the
Company outstanding immediately after the effective date of such merger being
owned of record or beneficially by persons other than the holders of such
capital stock immediately prior to such merger; (ii) the sale of all or
substantially all the assets of the Company; (iii) a sale, lease, transfer or
other disposition (or the last such sale, lease, transfer or other disposition
in a series of related transactions) resulting in the transfer of more than 50%
of the outstanding capital stock of the Company to an unrelated and unaffiliated
third party purchaser; or (iv) any other transaction (or the last such
transaction in a series of related transactions) resulting in the transfer by
John W. Casella and/or Douglas R. Casella to any one or more persons of an
aggregate of more than twenty percent (20%) of the shares of any class of the
Company's stock held by John W. Casella and/or Douglas R. Casella, or which
creates in favor of any one or more persons the right, directly or indirectly,
to acquire from John W. Casella and/or Douglas R. Casella shares which in the
aggregate represent more than twenty percent (20%) of the shares of any class of
the Company's stock held by John W. Casella and Douglas R. Casella; or
c. upon the repurchase by the Company after December 31, 2000 of the
warrants dated July 26, 1993 and May 25, 1994, or of the shares of Common Stock
issued upon the exercise of such warrants, pursuant to the terms of the
Repurchase Agreement dated as of December 22, 1995 between the Company and the
holders of such warrants.
-2-
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement under
seal as of the date set forth above.
CASELLA WASTE SYSTEMS, INC.
By:
--------------------------------
BCI GROWTH III, L.P.
By:
--------------------------------
NORTH ATLANTIC VENTURE FUND, L.P.
By:
--------------------------------
VERMONT VENTURE CAPITAL FUND, L.P.
By:
--------------------------------
-3-
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement under
seal as of the date set forth above.
CASELLA WASTE SYSTEMS, INC.
By:
--------------------------------
BCI GROWTH III, L.P.
BY: TEANECK ASSOCIATES GENERAL
PARTNER
By:
--------------------------------
Donald P. Remey
General Partner
NORTH ATLANTIC VENTURE FUND, L.P.
By:
--------------------------------
VERMONT VENTURE CAPITAL FUND, L.P.
By:
--------------------------------
-4-
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement under
seal as of the date set forth above.
CASELLA WASTE SYSTEMS, INC.
By: /s/ John W. Casella
--------------------------------
BCI GROWTH III, L.P.
By: /s/ Donald P. Remey
--------------------------------
NORTH ATLANTIC VENTURE FUND, L.P.
BY: NORTH ATLANTIC CAPITAL
PARTNERS, L.P.
By: /s/ Gregory B. Peters
--------------------------------
General Partner
VERMONT VENTURE CAPITAL FUND, L.P.
BY: VERMONT VENTURE CAPITAL
PARTNERS, L.P.
By: /s/ Gregory B. Peters
--------------------------------
General Partner
-5-
Execution copy #1
ASSET PURCHASE AGREEMENT
Asset Purchase Agreement dated as of January 17, 1997 by and among KENNETH
H. MEAD (the "Stockholder"), KERKIM, INC., a New York corporation ("KERKIM," or
the "Seller"), and CASELLA WASTE MANAGEMENT OF N.Y., INC., a New York
corporation (the "Buyer"). The Stockholder, the Seller and the Buyer are
sometimes referred to collectively as the "Parties" or individually as a
"Party."
W I T N E S S E T H:
WHEREAS, the Stockholder owns all of the shares of capital stock of the
Seller; and
WHEREAS, the Buyer desires to purchase, and the Seller desires to sell,
substantially all of its assets and business, for the consideration set forth
below and the assumption of the Seller's liabilities set forth below, subject to
the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto do hereby agree as follows:
1. Purchase and Sale of the Assets.
a. Delivery of the Assets. Subject to and upon the terms and
conditions of this Agreement, at the closing of the transactions contemplated by
this Agreement (the "Closing"), the Seller shall sell, transfer, convey, assign
and deliver to the Buyer, and the Buyer shall purchase from the Seller, all of
the following properties and assets of the Seller:
i. all inventories, including of office supplies, maintenance
supplies, packaging materials, spare parts and similar items (collectively, the
"Inventory") which exist on the Closing Date (as defined below);
ii. all accounts, accounts receivable, notes and notes receivable
existing on the Closing Date which are payable to the Seller, including any
security held by the Seller for the payment thereof (collectively, the "Accounts
Receivable");
iii. all cash, prepaid expenses, deposits, bank accounts and
other similar assets of the Seller existing on the Closing Date, including the
cash represented by such assets;
iv. all rights of the Seller under the contracts, agreements,
leases, licenses and other instruments set forth on Section 2(o) of the
Disclosure Schedule (collectively, the "Contract Rights");
v. all real property of the Seller set forth on Section 2(k) of
the Disclosure Schedule, together with all buildings, fixtures and improvements
located on or attached thereto, including such Seller's right, title and
interest in and to all leases, subleases, franchises, licenses, permits,
easements and rights-of-way which are appurtenant to said real property
(collectively, the "Real Property");
vi. all books, records and accounts, correspondence, production
records, technical, accounting, manufacturing and procedural manuals, customer
lists, employment records, studies, reports or summaries relating to any
environmental conditions or consequences of any operation, present or former, as
well as all studies, reports or summaries relating to any environmental aspect
or the general condition of the Assets, and any confidential information which
has been reduced to writing relating to or arising out of the business of the
Seller;
vii. All rights of the Seller under express or implied warranties
from the suppliers of the Seller;
viii. the motor vehicles and other rolling stock owned by the
Seller on the Closing Date;
ix. all of the machinery, containers, equipment, tools,
production reels and spools, tooling, dies, production fixtures, maintenance
machinery and equipment, furniture, leasehold improvements and construction in
progress owned by the Seller on the Closing Date whether or not reflected as
capital assets in the accounting records of the Seller (collectively, the "Fixed
Assets");
x. all of the Seller's right, title and interest in and to all
intangible property rights, including but not limited to trade secrets,
processes, know-how, trade names, including the name "Kerkim, Inc." and "SDS of
New York" or any derivation thereof and any assumed names under which the Seller
has operated, owned or, where not owned, used by the Seller in its business and
all licenses and other agreements to which the Seller is a party (as licensor or
licensee) or by which the Seller is bound relating to any of the foregoing kinds
of property or rights to any "know-how" or disclosure or use of ideas
(collectively, the "Intangible Property"); and
xi. except as specifically provided in Section 1(b) below, all
other assets, properties, claims, rights and interests of the Seller which exist
on the Closing Date, of every kind and nature and description, whether tangible
or intangible, real, personal or mixed.
-2-
b. Notwithstanding the provisions of Section 1(a) above, the assets to
be transferred to the Buyer under this Agreement shall not include any assets
listed on Schedule 1(b) attached hereto (the "Excluded Assets").
c. The Inventory, Accounts Receivable, Contract Rights, Real Property,
Fixed Assets, Intangible Property and other properties, assets and businesses of
the Seller described in Section 1(a) above, other than the Excluded Assets,
shall be referred to collectively as the "Assets". The Effective Date of this
Agreement is December 31, 1996.
d. Further Assurances. At any time and from time to time after the
Closing, at the Buyer's request and without further consideration, the Seller
promptly shall execute and deliver such instruments of sale, transfer,
conveyance, assignment and confirmation, and take such other action, as the
Buyer may reasonably request to more effectively transfer, convey and assign to
the Buyer, and to confirm the Buyer's title to, all of the Assets, to put the
Buyer in actual possession and operating control thereof, to assist the Buyer in
exercising all rights with respect thereto and to carry out the purpose and
intent of this Agreement.
e. Purchase Price. The purchase price for the Assets (the "Purchase
Price") shall be the sum of $3,500,000 plus the aggregate amount of the Assumed
Liabilities (not to exceed $2,945,000 as of December 31, 1996). The Purchase
Price shall be paid as follows:
i. The Buyer shall assume the liabilities of the Seller
pursuant to the Instrument of Assumption described in
paragraph f below; and
ii. An aggregate of $3,500,000 shall be paid in cash at the
Closing in the form of wire transfer or check.
f. Assumption of Liabilities. At the Closing, the Buyer shall execute
and deliver an Instrument of Assumption of Liabilities (the "Instrument of
Assumption") substantially in the form attached hereto as Exhibit B, pursuant to
which it shall assume and agree to perform, pay and discharge the following
liabilities, obligations and commitments of the Seller (the "Assumed
Liabilities") (and the Seller and the Stockholder represent that the Assumed
Liabilities do not exceed $2,945,000 as of December 31, 1996):
i. All trade accounts payable reflected on the balance sheet of
the Seller as of December 31, 1996 previously delivered to the Buyer (the
"Current Balance Sheet");
-3-
ii. All obligations of the Seller continuing after the Closing
under the leases, contracts and employee benefit plans set forth on Schedule
1(f) attached hereto which become due and payable after the Closing Date; and
iii. All other liabilities and obligations of the Seller
specifically set forth in Schedule 1(f) attached hereto.
The Buyer shall not at the Closing assume or agree to perform, pay or discharge,
and the Seller shall remain unconditionally liable for, all liabilities,
obligations and commitments, fixed or contingent, of the Seller other than the
Assumed Liabilities. Without limiting the foregoing, any and all liabilities of
the Seller arising from environmental laws and, except as provided above, in any
way related to events prior to the Closing, shall be the sole responsibility of
the Seller.
g. Closing. The closing of the purchase and sale of the Assets and the
(the "Closing") shall take place at the offices of Earl D. Butler, P.C., 231-241
Man Street, Vestal, New York 13160, or at such other place as the parties may
mutually agree at 10:00 AM., on January ___, 1997 or as soon as practicable
thereafter (the "Closing Date").
h. Certain Tax Matters. The aggregate amount of the Purchase Price and
the Assumed Liabilities shall be allocated among the Assets as set forth on
Schedule 1(h) attached hereto. Such allocation shall be subject to adjustment to
the extent that the Purchase Price is adjusted pursuant to Section 1(i) hereof
in the manner specified in such subsections.
2. Joint and Several Representations and Warranties of the Stockholder and
the Seller. Each of the Seller and the Stockholder, jointly and severally,
represent and warrant to the Buyer that the statements contained in this Article
II are true and correct, except as set forth in the disclosure schedule attached
hereto (the "Disclosure Schedule").
a. Organization, Qualification and Corporate Power. The Seller is a
corporation duly organized, validly existing and in corporate and tax good
standing under the laws of the State of New York. The Seller is duly qualified
to conduct business and is in corporate and tax good standing under the laws of
each jurisdiction in which the nature of its businesses or the ownership or
leasing of its properties requires such qualification. The Seller has all
requisite corporate power and authority to carry on the businesses in which it
is engaged and to own and use the properties owned and used by it. The Seller
has furnished to the Buyer true and complete copies of its charter and Bylaws,
each as amended and as in effect on the date hereof. The Seller is not in
default under or in violation of any provision of its charter or Bylaws.
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b. Capitalization. The authorized, issued and outstanding shares of
capital stock of the Seller are as set forth in Section 2(b) of the Disclosure
Schedule. Section 2(b) of the Disclosure Schedule sets forth a complete and
accurate list of all beneficial and record stockholders of the Seller,
indicating the number of shares of the Seller held by each stockholder. All of
the issued and outstanding shares of capital stock of the Seller are duly
authorized, validly issued, fully paid, nonassessable and free of all preemptive
rights. There are no outstanding or authorized options, warrants, rights,
agreements or commitments to which the Seller is a party or which are binding
upon the Seller providing for the issuance, disposition or acquisition of any of
its capital stock. There are no outstanding or authorized stock appreciation,
phantom stock or similar rights with respect to the Seller. There are no
agreements, voting trusts, proxies, or understandings with respect to the
voting, or registration under the Securities Act, of any shares of capital stock
of the Seller. All of the issued and outstanding shares of capital stock of the
Seller were issued in compliance with applicable federal and state securities
laws. The Stockholder has not entered into any agreement to sell, pledge or
otherwise encumber any of his shares of the capital stock of the Seller.
c. Authorization of Transaction. The Seller has all requisite power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement, the
performance by the Seller of this Agreement and the consummation by the Seller
of the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of the Seller. This Agreement has
been duly and validly executed and delivered by the Stockholder and the Seller
and constitutes a valid and binding obligation of the Stockholder and the
Seller, enforceable against such persons in accordance with its terms.
d. Noncontravention. Neither the execution and delivery of this
Agreement by Stockholder and the Seller, nor the consummation by the Stockholder
and the Seller of the transactions contemplated hereby, will (a) conflict with
or violate any provision of the charter or By-laws of the Seller, (b) require on
the part of the Stockholder or the Seller any filing with, or any permit,
authorization, consent or approval of, any court, arbitrational tribunal,
administrative agency or commission or other governmental or regulatory
authority or agency (a "Governmental Entity"), (c) conflict with, result in a
breach of, constitute (with or without due notice or lapse of time or both) a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice, consent or
waiver under, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Security Interest (as defined below) or other arrangement to which
the Stockholder or the Seller is a party or by which the Stockholder or the
Seller is bound or to which any of their assets is subject, (d) result in the
imposition of any Security Interest upon any assets of the Stockholder or the
Seller or (e) violate any order, writ, injunction,
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decree, statute, rule or regulation applicable to the Stockholder or the Seller,
or any of their properties or assets. For purposes of this Agreement, "Security
Interest" means any mortgage, pledge, security interest, encumbrance, charge, or
other lien (whether arising by contract or by operation of law), other than (i)
mechanic's, materialmen's, and similar liens, (ii) liens arising under worker's
compensation, unemployment insurance, social security, retirement, and similar
legislation, and (iii) liens on goods in transit incurred pursuant to
documentary letters of credit, in each case arising in the ordinary course of
business consistent with past custom and practice (including with respect to
frequency and amount) ("Ordinary Course of Business") of the Seller and not
material to the Seller.
e. Subsidiaries. The Seller does not control directly or indirectly or
have any direct or indirect equity participation in any corporation,
partnership, trust, or other business association.
f. Financial Statements. The Seller has provided to the Buyer (a) the
balance sheets and statements of income, changes in stockholders' equity and
cash flows for each of the Seller's fiscal years ending on or prior to December
31, 1995 (each of which has been reviewed in accordance with standards
established by the American Institute of Certified Public Accountants); and (b)
the unaudited balance sheet and statements of income, changes in stockholders'
equity and cash flows as of and for the year ended December 31, 1996 (the "Most
Recent Fiscal Period End"). Such financial statements (collectively, the
"Financial Statements") have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods covered thereby, fairly present the financial condition,
results of operations and cash flows of the Seller as of the respective dates
thereof and for the periods referred to therein and are consistent with the
books and records of the Seller; provided, however, that the Financial
Statements referred to in clause (b) above are subject to normal recurring
year-end adjustments (which will not be material) and do not include footnotes.
g. Absence of Certain Changes. Since the Most Recent Fiscal Period
End, (a) there has not been any material adverse change in the assets, business,
financial condition or results of operations of the Seller, nor has there
occurred any event or development which could reasonably be foreseen to result
in such a material adverse change in the future, and (b) the Seller has not
taken any actions not in the Ordinary Course of Business.
h. Undisclosed Liabilities. The Seller has no liability (whether known
or unknown, whether absolute or contingent, whether liquidated or unliquidated
and whether due or to become due), except for (a) liabilities shown on the
balance sheet referred to in clause (b) of Section 2(f) (the "Most Recent
Balance Sheet"), (b) liabilities which have arisen since the Most Recent Fiscal
Period End in the Ordinary Course of Business and which are similar in nature
and amount to the
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liabilities which arose during the comparable period of time in the immediately
preceding fiscal period and (c) contractual liabilities incurred in the Ordinary
Course of Business which are not required by GAAP to be reflected on a balance
sheet.
i. Tax Matters.
i. Each of the Stockholder and the Seller has filed all Tax
Returns (as defined below) that he or it was required to file and all such Tax
Returns were correct and complete in all material respects. Each of the
Stockholder and the Seller has paid all Taxes (as defined below) that are shown
to be due on any such Tax Returns. The unpaid Taxes of the Seller for tax
periods through the date of the Most Recent Balance Sheet do not exceed the
accruals and reserves for Taxes set forth on the Most Recent Balance Sheet. The
Seller has no actual or potential liability for any Tax obligation of any
taxpayer (including without limitation the Stockholder or any affiliated group
of corporations or other entities that included the Seller during a prior
period) other than the Seller. All Taxes that the Seller are or were required by
law to withhold or collect have been duly withheld or collected and, to the
extent required, have been paid to the proper Governmental Entity. For purposes
of this Agreement, "Taxes" means all taxes, charges, fees, levies or other
similar assessments or liabilities, including without limitation income, gross
receipts, ad valorem, premium, value-added, excise, real property, personal
property, sales, use, transfer, withholding, employment, payroll and franchise
taxes imposed by the United States of America or any state, local or foreign
government, or any agency thereof, or other political subdivision of the United
States or any such government, and any interest, fines, penalties, assessments
or additions to tax resulting from, attributable to or incurred in connection
with any tax or any contest or dispute thereof. For purposes of this Agreement,
"Tax Returns" means all reports, returns, declarations, statements or other
information required to be supplied to a taxing authority in connection with
Taxes.
ii. The Seller has delivered to the Buyer correct and complete
copies of all federal income Tax Returns, examination reports and statements of
deficiencies assessed against or agreed to by any of the Seller since January 1,
1990. The federal income Tax Returns of the Seller have been audited by the
Internal Revenue Service or are closed by the applicable statute of limitations
for all taxable years through December 31, 1992. No examination or audit of any
Tax Returns of the Seller by any Governmental Entity is currently in progress
or, to the knowledge of the Seller or the Stockholder, threatened or
contemplated. The Seller has not waived any statute of limitations with respect
to taxes or agreed to an extension of time with respect to a tax assessment or
deficiency.
iii. The Sellers is not a "consenting corporation" within the
meaning of Section 341(f) of the Code and none of the assets of the Seller are
subject to an election under Section 341(f) of the Code. The Seller has not been
a United
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States real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the applicable period specified in Section 897(c)(l)(A)(ii)
of the Code. The Seller is not a party to any Tax allocation or sharing
agreement.
iv. The Seller is not and has never been a member of an
"affiliated group" of corporations (within the meaning of Section 1504 of the
Code). The Seller has not made an election under Treasury Reg. Section
1.1502-20(g). The Seller is not and has never been required to make a basis
reduction pursuant to Treasury Reg. Section 1. 1502-20(b) or Treasury Reg.
Section 1.337(d)-2T(b).
j. Assets. The Seller owns or leases all tangible assets necessary for
the conduct of its businesses as presently conducted and as presently proposed
to be conducted. Each such tangible asset is free from material defects, has
been maintained in accordance with normal industry practice, is in good
operating condition and repair (subject to normal wear and tear) and is suitable
for the purposes for which it presently is used. No asset of the Seller
(tangible or intangible) is subject to any Security Interest. A list of the
Fixed Assets is set forth on Section 2(j) of the Disclosure Schedule.
k. Owned Real Property. Section 2(k) of the Disclosure Schedule lists
and describes briefly all real property that the Sellers owns. With respect to
each parcel of such real property:
i. the identified owner has good and clear record and marketable
title to such parcel, insurable by a recognized national title insurance company
at standard rates, free and clear of any Security Interest, easement, covenant
or other restriction, except for recorded easements, covenants and other
restrictions which do not impair the uses, occupancy or value of such parcel in
their current uses (the "Intended Uses");
ii. there are no (i) pending or, to the knowledge of the Seller,
threatened condemnation proceedings relating to such parcel, (ii) pending or, to
the knowledge of the Seller, threatened litigation or administrative actions
relating to such parcel, or (iii) other matters affecting adversely the Intended
Uses, occupancy or value thereof;
iii. the legal description for such parcel contained in the deed
thereof describes such parcel fully and adequately; the buildings and
improvements may be used as of right under applicable zoning and land use laws
for the Intended Uses, and such buildings and improvements are located within
the boundary lines of the described parcels of land, are not in violation of
current setback requirements, zoning laws and ordinances and do not encroach on
any easement which may burden the land; the land does not serve any adjoining
property for any purpose inconsistent with the Intended Uses; and such parcel is
not located within any flood
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plain or subject to any similar type restriction for which any permits or
licenses necessary to the use thereof have not been obtained;
iv. there are no leases, subleases, licenses or agreements,
written or oral, granting to any party or parties (other than the Seller) the
right of use or occupancy of any portion of such parcel;
v. there are no outstanding options or rights of first refusal to
purchase such parcel, or any portion thereof or interest therein;
vi. all facilities located on such parcel are supplied with
utilities and other services necessary for the operation of such facilities,
including gas, electricity, water, telephone, sanitary sewer and storm sewer,
all of which services are adequate for the Intended Uses and in accordance with
all applicable laws, ordinances, rules and regulations and are provided via
public roads or via permanent, irrevocable, appurtenant easements benefiting
such parcel;
vii. such parcel abuts on and has direct vehicular access to a
public road or access to a public road via a permanent, irrevocable, appurtenant
easement benefiting such parcel;
viii. neither the Stockholder nor the Seller have received notice
of, and to the best of the Seller's knowledge, there is no proposed or pending
proceeding to change or redefine the zoning classification of all or any portion
of the parcels;
ix. the improvements constructed on the parcels are in good
condition and proper order, free of roof leaks, insect infestation, and material
construction defects, and all mechanical and utility systems servicing such
improvements are in good condition and proper working order, free of material
defects; and
x. each parcel is an independent unit which does not rely on any
facilities (other than the facilities of public utilities) located on any other
property (i) to fulfill any zoning, building code, or other municipal or
governmental requirement, (ii) for structural support or the furnishing of any
essential building systems or utilities, including, but not limited to electric,
plumbing, mechanical, heating, ventilating, and air conditioning systems, or
(iii) to fulfill the requirements of any lease. No building or other improvement
not included in the parcels relies on any part of the parcels to fulfill any
zoning, building code, or other municipal or governmental requirement or for
structural support or the furnishing of any essential building systems or
utilities. Each of the parcels is assessed by local property assessors as a tax
parcel or parcels separate from all other tax parcels.
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l. Intellectual Property. The Seller owns, or is licensed or otherwise
possesses legally enforceable rights to use, all patents, trademarks, trade
names, service marks, copyrights, and any applications for such patents,
trademarks, trade names, service marks and copyrights, schematics, technology,
know-how, computer software programs or applications and tangible or intangible
proprietary information or material (collectively, "Intellectual Property") that
are used to conduct its business as currently conducted or planned to be
conducted.
m. Inventory. All inventory of the Seller whether or not reflected on
the Most Recent Balance Sheet, consists of a quality and quantity usable and
saleable in the Ordinary Course of Business, except for obsolete items and items
of below-standard quality, all of which have been written-off or written-down
to net realizable value on the Most Recent Balance Sheet. All inventories not
written-off have been priced at the lower of cost or market on a last-in,
first-out basis.
n. Real Property Leases. Section 2(n) of the Disclosure Schedule lists
and describes briefly all real property leased or subleased to the Seller. The
Seller has delivered to the Buyer correct and complete copies of the leases and
subleases (as amended to date) listed in Section 2(n) of the Disclosure
Schedule. With respect to each lease and sublease listed in Section 2(n) of the
Disclosure Schedule:
i. the lease or sublease is legal, valid, binding, enforceable
and in full force and effect;
ii. the lease or sublease will continue to be legal, valid,
binding, enforceable and in full force and effect immediately following the
Closing in accordance with the terms thereof as in effect prior to the Closing;
iii. no party to the lease or sublease is in breach or default,
and no event has occurred which, with notice or lapse of time, would constitute
a breach or default or permit termination, modification, or acceleration
thereunder;
iv. there are no disputes, oral agreements or forbearance
programs in effect as to the lease or sublease;
v. the Seller has not assigned, transferred, conveyed, mortgaged,
deeded in trust or encumbered any interest in the leasehold or subleasehold;
vi. all facilities leased or subleased thereunder are supplied
with utilities and other services necessary for the operation of said
facilities;
vii. to the knowledge of the Seller, the owner of the facility
leased or subleased has good and clear record and marketable title to the parcel
of
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real property, free and clear of any Security Interest, easement, covenant or
other restriction, except for recorded easements, covenants, and other
restrictions which do not impair the Intended Uses, occupancy or value of the
property subject thereto; and
viii. the Seller has obtained non-disturbance agreements from the
holder of each superior Security Interest and ground lease in connection with
each such lease or sublease (each of which is listed in Section 2(n) of the
Disclosure Schedule); and the representations and warranties set forth in
clauses (i) through (iv) of this Section 2(n) with respect to leases and
subleases are true and correct with respect to such nondisturbance agreements.
o. Contracts. Section 2(o) of the Disclosure Schedule lists the
following written arrangements (including without limitation written agreements)
to which the Seller is a party:
i. any written arrangement (or group of related written
arrangements) for the lease of personal property from or to third parties
providing for lease payments in excess of $1,000 per annum;
ii. any written arrangement (or group of related written
arrangements) for the purchase or sale of raw materials, commodities, supplies,
products or other personal property or for the furnishing or receipt of services
(i) which calls for performance over a period of more than one year, (ii) which
involves more than the sum of $25,000, or (iii) in which the Seller has granted
exclusive rights relating to any products, services or territory or has agreed
to purchase a minimum quantity of goods or services or has agreed to purchase
goods or services exclusively from a certain party;
iii. any written arrangement establishing a partnership or joint
venture;
iv. any written arrangement (or group of related written
arrangements) under which it has created, incurred, assumed, or guaranteed (or
may create, incur, assume, or guarantee) indebtedness (including capitalized
lease obligations) or under which it has imposed (or may impose) a Security
Interest on any of its assets, tangible or intangible;
v. any written arrangement concerning confidentiality or
noncompetition;
vi. any written arrangement between the Seller and the
Stockholder or any of his relatives or affiliates;
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vii. any written arrangement under which the consequences of a
default or termination could have a material adverse effect on the assets,
business, financial condition, results of operations or future prospects of the
Seller; and
viii. any other written arrangement (or group of related written
arrangements) either involving more than $25,000 or not entered into in the
Ordinary Course of Business.
The Seller has delivered to the Buyer a correct and complete copy of each
written arrangement (as amended to date) listed in Section 2(o) of the
Disclosure Schedule. With respect to each written arrangement so listed: (i) the
written arrangement is legal, valid, binding and enforceable and in full force
and effect; (ii) the written arrangement will continue to be legal, valid,
binding and enforceable and in full force and effect immediately following the
Closing in accordance with the terms thereof as in effect prior to the Closing;
and (iii) no party is in breach or default, and no event has occurred which with
notice or lapse of time would constitute a breach or default or permit
termination, modification, or acceleration, under the written arrangement. The
Seller is not a party to any oral contract, agreement or other arrangement
which, if reduced to written form, would be required to be listed in Section
2(o) of the Disclosure Schedule under the terms of this Section 2(o).
p. Accounts Receivable. All accounts receivable of the Seller
reflected on the Most Recent Balance Sheet are valid receivables subject to no
setoffs or counterclaims and are current and collectible to the best of the
Seller's knowledge, net of the applicable reserve for bad debts on the Most
Recent Balance Sheet. All accounts receivable reflected in the financial or
accounting records of the Seller that have arisen since the Most Recent Fiscal
Period End are valid receivables subject to no setoffs or counterclaims and are
collectible, net of a reserve for bad debts in an amount proportionate to the
reserve shown on the Most Recent Balance Sheet.
q. Powers of Attorney; Bank Accounts. There are no outstanding
powers of attorney executed on behalf of any of the Seller. A list of the bank
accounts of the Seller is set forth on Section 2(q) of the Disclosure Schedule.
r. Insurance. Section 2(r) of the Disclosure Schedule sets forth
the following information with respect to each insurance policy (including fire,
theft, casualty, general liability, workers compensation, business interruption,
environmental, product liability and automobile insurance policies and bond and
surety arrangements) to which the Seller has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past five years:
i. the name of the insurer, the name of the policyholder and the
name of each covered insured;
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ii. the policy number and the period of coverage;
iii. the scope (including an indication of whether the coverage
was on a claims made, occurrence, or other basis) and amount (including a
description of how deductibles and ceilings are calculated and operate) of
coverage; and
iv. a description of any retroactive premium adjustments or other
loss-sharing arrangements.
(i) Each such insurance policy is enforceable and in full force and effect; (ii)
such policy will continue to be enforceable and in full force and effect
immediately following the Closing in accordance with the terms thereof as in
effect prior to the Closing; (iii) the Seller is not in breach or default
(including with respect to the payment of premiums or the giving of notices)
under such policy, and no event has occurred which, with notice or the lapse of
time, would constitute such a breach or default or permit termination,
modification or acceleration, under such policy; and (iv) the Seller has not
received any notice from the insurer disclaiming coverage or reserving rights
with respect to a particular claim or such policy in general. The Seller has not
incurred any loss, damage, expense or liability covered by any such insurance
policy for which it has not properly asserted a claim under such policy. The
Seller is not covered by insurance in scope and amount customary and reasonable
for the businesses in which it is engaged.
s. Litigation. Section 2(s) of the Disclosure Schedule identifies, and
contains a brief description of, (a) any unsatisfied judgment, order, decree,
stipulation or injunction and (b) any claim, complaint, action, suit,
proceeding, hearing or investigation of or in any Governmental Entity or before
any arbitrator to which the Seller is a party or, to the knowledge of the Seller
is threatened to be made a party. None of the complaints, actions, suits,
proceedings, hearings, and investigations set forth in Section 2(s) of the
Disclosure Schedule could have a material adverse effect on the assets,
business, financial condition, results of operations or future prospects of the
Seller.
t. Employees. Section 2(t) of the Disclosure Schedule contains a list
of all employees of the Seller, along with the position and the annual rate of
compensation of each such person. To the knowledge of the Seller, no key
employee or group of employees has any plans to terminate employment with the
Seller. The Seller is not a party to or bound by any collective bargaining
agreement, and has not experienced any strikes, grievances, claims of unfair
labor practices or other collective bargaining disputes. The Seller has no
knowledge of any organizational effort made or threatened, either currently or
within the past two years, by or on behalf of any labor union with respect to
employees of the Seller.
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u. Employee Benefits.
i. Section 2(u) of the Disclosure Schedule contains a complete
and accurate list of all Employee Benefit Plans (as defined below) maintained,
or contributed to, by the Seller, or any ERISA Affiliate (as defined below). For
purposes of this Agreement, "Employee Benefit Plan" means any "employee pension
benefit plan" (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), any "employee welfare benefit plan"
(as defined in Section 3(1) of ERISA), and any other written or oral plan,
agreement or arrangement involving direct or indirect compensation, including
without limitation insurance coverage, severance benefits, disability benefits,
deferred compensation, bonuses, stock options, stock purchase, phantom stock,
stock appreciation or other forms of incentive compensation or post-retirement
compensation. For purposes of this Agreement, "ERISA Affiliate" means any entity
which is a member of (i) a controlled group of corporations (as defined in
Section 414(b) of the Code), (ii) a group of trades or businesses under common
control (as defined in Section 414(c) of the Code), or (iii) an affiliated
service group (as defined under Section 414(m) of the Code or the regulations
under Section 414(o) of the Code), any of which includes the Seller. Complete
and accurate copies of (i) all Employee Benefit Plans which have been reduced to
writing, (ii) written summaries of all unwritten Employee Benefit Plans, (iii)
all related trust agreements, insurance contracts and summary plan descriptions,
and (iv) all annual reports filed on IRS Form 5500, 5500C or 5500R for the last
five plan years for each Employee Benefit Plan, have been delivered to the
Buyer. Each Employee Benefit Plan has been administered in all material respects
in accordance with its terms and the Seller, and the ERISA Affiliates have in
all material respects met their obligations with respect to such Employee
Benefit Plan and has made all required contributions thereto. The Seller and all
Employee Benefit Plans are in compliance in all material respects with the
currently applicable provisions of ERISA and the Code and the regulations
thereunder.
ii. There are no investigations by any Governmental Entity,
termination proceedings or other claims (except claims for benefits payable in
the normal operation of the Employee Benefit Plans and proceedings with respect
to qualified domestic relations orders) suits or proceedings against or
involving any Employee Benefit Plan or asserting any rights or claims to
benefits under any Employee Benefit Plan that could give rise to any material
liability.
iii. All the Employee Benefit Plans that are intended to be
qualified under Section 401(a) of the Code have received determination letters
from the Internal Revenue Service to the effect that such Employee Benefit Plans
are qualified and the plans and the trusts related thereto are exempt from
federal income taxes under Sections 401(a) and 501(a), respectively, of the
Code, no such determination letter has been revoked and revocation has not been
threatened, and no such Employee Benefit Plan has been amended since the date of
its most recent
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determination letter or application therefor in any respect, and no act or
omission has occurred, that would adversely affect its qualification or
materially increase its cost.
iv. Neither the Seller nor any ERISA Affiliate has ever
maintained an Employee Benefit Plan subject to Section 412 of the Code or Title
IV of ERISA.
v. At no time has the Seller, or any ERISA Affiliate been
obligated to contribute to any "multi-employer plan" (as defined in Section
4001(a)(3) of ERISA).
vi. There are no unfunded obligations under any Employee Benefit
Plan providing benefits after termination of employment to any employee of any
of the Sellers (or to any beneficiary of any such employee), including but not
limited to retiree health coverage and deferred compensation, but excluding
continuation of health coverage required to be continued under Section 4980B of
the Code and insurance conversion privileges under state law.
vii. No act or omission has occurred and no condition exists with
respect to any Employee Benefit Plan maintained by the Seller or any ERISA
Affiliate that would subject the Seller or any ERISA Affiliate to any material
fine, penalty, tax or liability of any kind imposed under ERISA or the Code.
viii. No Employee Benefit Plan is funded by, associated with, or
related to a "voluntary employee's beneficiary association" within the meaning
of Section 501(c)(9) of the Code.
ix. No Employee Benefit Plan, plan documentation or agreement,
summary plan description or other written communication distributed generally to
employees by its terms prohibits the Seller from amending or terminating any
such Employee Benefit Plan.
x. Section 2(u) of the Disclosure Schedule discloses each: (i)
agreement with any director, executive officer or other key employee of the
Seller (A) the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the Company
of the nature of any of the transactions contemplated by this Agreement, (B)
providing any term of employment or compensation guarantee or (C) providing
severance benefits or other benefits after the termination of employment of such
director, executive officer or key employee; (ii) agreement, plan or arrangement
under which any person may receive payments from the Company that may be subject
to the tax imposed by Section 4999 of the Code or included in the determination
of such person's "parachute payment" under Section 280G of the Code; and (iii)
agreement or plan binding the Company, including without limitation any stock
option plan, stock appreciation right plan,
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restricted stock plan, stock purchase plan, severance benefit plan, or any
Employee Benefit Plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement.
v. Environmental Matters.
i. The Stockholder and the Seller has complied with all
applicable Environmental Laws (as defined below). There is no pending or, to the
knowledge of the Seller, threatened civil or criminal litigation, written notice
of violation, formal administrative proceeding, or investigation, inquiry or
information request by any Governmental Entity, relating to any Environmental
Law involving the Seller. For purposes of this Agreement, "Environmental Law"
means any federal, state or local law, statute, rule or regulation or the common
law relating to the environment or occupational health and safety, including
without limitation any statute, regulation or order pertaining to (i) treatment,
storage, disposal, generation and transportation of industrial, toxic or
hazardous substances or solid or hazardous waste; (ii) air, water and noise
pollution; (iii) groundwater and soil contamination; (iv) the release or
threatened release into the environment of industrial, toxic or hazardous
substances, or solid or hazardous waste, including without limitation emissions,
discharges, injections, spills, escapes or dumping of pollutants, contaminants
or chemicals; (v) the protection of wild life, marine sanctuaries and wetlands,
including without limitation all endangered and threatened species; (vi) storage
tanks, vessels and containers; (vii) underground and other storage tanks or
vessels, abandoned, disposed or discarded barrels, containers and other closed
receptacles; (viii) health and safety of employees and other persons; and (ix)
manufacture, processing, use, distribution, treatment, storage, disposal,
transportation or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or oil or petroleum products or solid or hazardous
waste. As used above, the terms "release" and "environment" shall have the
meaning set forth in the federal Comprehensive Environmental Compensation,
Liability and Response Act of 1980 ("CERCLA").
ii. There have been no releases of any Materials of Environmental
Concern (as defined below) into the environment at any parcel of real property
or any facility formerly or currently owned, operated or controlled by the
Stockholder or the Seller. With respect to any such releases of Materials of
Environmental Concern, the Stockholder and the Seller have given all required
notices to Governmental Entities (copies of which have been provided to the
Buyer). Neither the Stockholder nor the Seller are aware of any releases of
Materials of Environmental Concern at parcels of real property or facilities
other than those owned, operated or controlled by the Stockholder or the Seller
that could reasonably be expected to have an impact on the real property or
facilities owned, operated or
-16-
controlled by the Stockholder or the Seller. For purposes of this Agreement,
"Materials of Environmental Concern" means any chemicals, pollutants or
contaminants, hazardous substances (as such term is defined under CERCLA), solid
wastes and hazardous wastes (as such terms are defined under the federal
Resources Conservation and Recovery Act), toxic materials, oil or petroleum and
petroleum products, or any other material subject to regulation under any
Environmental Law.
iii. Set forth in Section 2(v) of the Disclosure Schedule is a
list of all environmental reports, investigations and audits relating to
premises currently or previously owned or operated by the Stockholder or the
Seller (whether conducted by or on behalf of the Stockholder or Seller or a
third party, and whether done at the initiative of the Stockholder or the Seller
or directed by a Governmental Entity or other third party) which any of the
Stockholder or the Sellers has possession of or access to. Complete and accurate
copies of each such report, or the results of each such investigation or audit,
have been provided to the Buyer.
iv. Set forth in Section 2(v) of the Disclosure Schedule is a
list of all of the solid and hazardous waste transporters and treatment, storage
and disposal facilities that have been utilized by the Stockholder or the
Seller. The Seller is not aware of any material environmental liability of any
such transporter or facility.
w. Legal Compliance. The Seller, and the conduct and operations
of its business, are in compliance with each law (including rules and
regulations thereunder) of any federal, state, local or foreign government, or
any Governmental Entity, which (a) affects or relates to this Agreement or the
transactions contemplated hereby or (b) is applicable to the Seller or business,
except for any violation of or default under a law referred to in clause (b)
above which reasonably may be expected not to have a material adverse effect on
the assets, business, financial condition, results of operations or future
prospects of the Seller.
x. Permits. Section 2(x) of the Disclosure Schedule sets forth a
list of all permits, licenses, registrations, certificates, orders or approvals
from any Governmental Entity (including without limitation those issued or
required under Environmental Laws and those relating to the occupancy or use of
owned or leased real property) ("Permits") issued to or held by the Seller. Such
listed Permits are the only Permits that are required for the Seller to conduct
its business as presently conducted or as proposed to be conducted, except for
those the absence of which would not have any material adverse effect on the
assets, business, financial condition, results of operations or future prospects
of the Seller. Each such Permit is in full force and effect and, to the best of
the knowledge of the Seller, no suspension or cancellation of such Permit is
threatened and there is no basis for believing that such Permit will not be
renewed upon expiration. Each such Permit will continue in full force and effect
following the Closing.
-17-
y. Certain Business Relationships With Affiliates. Except as set
forth in Section 2(y) of the Disclosure Schedule, no affiliate of the Seller (a)
owns any property or right, tangible or intangible, which is used in the
business of the Seller, (b) has any claim or cause of action against the Seller,
or (c) owes any money to the Seller. Section 2(y) of the Disclosure Schedule
describes any transactions or relationships between the Seller and any affiliate
thereof.
z. Brokers' Fees. The Seller has no liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
aa. Books and Records. The minute books and other similar records of
the Seller contain true and complete records of all actions taken at any
meetings of the Seller's stockholders, Board of Directors or any committee
thereof and of all written consents executed in lieu of the holding of any such
meeting. The books and records of the Seller accurately reflect in all material
respects the assets, liabilities, business, financial condition and results of
operations of the Seller and have been maintained in accordance with good
business and bookkeeping practices.
bb. Customers and Suppliers. No unfilled customer order or commitment
obligating the Seller to deliver products or perform services will result in a
loss to the Seller upon completion of performance. No purchase order or
commitment of the Seller is in excess of normal requirements, nor are prices
provided therein in excess of current market prices for the products or services
to be provided thereunder.
cc. Disclosure. No representation or warranty by the Stockholder or
the Seller contained in this Agreement, and no statement contained in the
Disclosure Schedule or any other document, certificate or other instrument
delivered to or to be delivered by or on behalf of the Stockholders or the
Seller pursuant to this Agreement, and no other statement made by the
Stockholder or the Seller or any of their representatives in connection with
this Agreement, contains or will contain any untrue statement of a material fact
or omits or will omit to state any material fact necessary, in light of the
circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading. The Stockholder and the Seller have
disclosed to the Buyer all material information relating to the Assets and the
business of the Seller or the transactions contemplated by this Agreement.
3. Representations and Warranties of the Buyer. The Buyer represents and
warranties to the Stockholder and the Seller as follows:
a. Organization. The Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York.
-18-
b. Authorization of Transaction. The Buyer has all requisite power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and thereunder. The execution and delivery of this Agreement by the
Buyer and the performance of this Agreement and the consummation of the
transactions contemplated hereby and thereby by the Buyer have been duly and
validly authorized by all necessary corporate action on the part of the Buyer.
This Agreement has been duly and validly executed and delivered by the Buyer and
constitutes a valid and binding obligation of the Buyer enforceable against it
in accordance with its terms.
c. Noncontravention. Neither the execution and delivery of this
Agreement by the Buyer, nor the consummation by the Buyer of the transactions
contemplated hereby or thereby, will (a) conflict with or violate any provision
of the charter or Bylaws of the Buyer, (b) require on the part of the Buyer any
filing with, or permit, authorization, consent or approval of, any Governmental
Entity, (c) conflict with, result in breach of, constitute (with or without due
notice or lapse of time or both) a default under, result in the acceleration of,
create in any party any right to accelerate, terminate, modify or cancel, or
require any notice, consent or waiver under, any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, Security Interest or other
arrangement to which the Buyer is a party or by which it is bound or to which
its assets are subject, or (d) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Buyer or any of its properties or
assets.
d. Brokers' Fees. The Buyer has no liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
4. Covenants.
a. Best Efforts. Each of the Parties shall use its best efforts, to
the extent commercially reasonable, to take all actions and to do all things
necessary, proper or advisable to consummate the transactions contemplated by
this Agreement.
b. Notices and Consents. The Stockholder and the Seller shall use
their best efforts to obtain, at the Seller's expense, all such waivers,
permits, consents, approvals or other authorizations from third parties and
Governmental Entities, and to effect all such registrations, filings and notices
with or to third parties and Governmental Entities, as may be required by or
with respect to the Seller in connection with the transactions contemplated by
this Agreement (including without limitation those listed in Section 2(d) or
Section 2(x) of the Disclosure Schedule).
c. Operation of Business. Except as contemplated by this Agreement,
during the period from the date of this Agreement to the Closing Date,
-19-
the Seller shall conduct its operations only in the Ordinary Course of Business
and in compliance with all applicable laws and regulations and, to the extent
consistent therewith, use all reasonable efforts to preserve intact its current
business organization, keep its physical assets in good working condition, keep
available the services of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings with
it to the end that its goodwill and ongoing business shall not be impaired in
any material respect.
d. Full Access. The Stockholder and the Seller shall permit
representatives of the Buyer to have full access (at all reasonable times, and
in a manner so as not to interfere with the normal business operations of the
Seller) to all premises, properties, financial and accounting records,
contracts, other records and documents, and personnel, of or pertaining to the
Seller. The Buyer (a) shall treat and hold as confidential any Confidential
Information (as defined below), (b) shall not use any of the Confidential
Information except in connection with this Agreement, and (c) if this Agreement
is terminated for any reason whatsoever, shall return to the Seller all tangible
embodiments (and all copies) thereof which are in its possession. For purposes
of this Agreement, "Confidential Information" means any confidential or
proprietary information of the Seller that is furnished in writing to the Buyer
by the Seller in connection with this Agreement and is labelled confidential or
proprietary; provided, however, that it shall not include any information (i)
which, at the time of disclosure, is available publicly, (ii) which, after
disclosure, becomes available publicly through no fault of the Buyer, or (iii)
which the Buyer knew or to which the Buyer had access prior to disclosure.
e. Notice of Breaches. The Stockholder and the Seller shall promptly
deliver to the Buyer written notice of any event or development that would (a)
render any statement, representation or warranty of the Stockholder or the
Seller in this Agreement (including the Disclosure Schedule) inaccurate or
incomplete in any material respect, or (b) constitute or result in a breach by
the Stockholder or the Seller of, or a failure by the Stockholder or the Seller
to comply with, any agreement or covenant in this Agreement applicable to such
party. The Buyer shall promptly deliver to the Stockholder and the Seller
written notice of any event or development that would (i) render any statement,
representation or warranty of the Buyer in this Agreement inaccurate or
incomplete in any material respect, or (ii) constitute or result in a breach by
the Buyer of, or a failure by the Buyer to comply with, any agreement or
covenant in this Agreement applicable to the Buyer. No such disclosure shall be
deemed to avoid or cure any such misrepresentation or breach.
f. Exclusivity. The Stockholder and the Seller shall not, and the
Seller shall use its best efforts to cause each of its officers, directors,
employees, representatives and agents not to, directly or indirectly, (a)
encourage, solicit, initiate, engage or participate in discussions or
negotiations with any person or entity (other than the Buyer) concerning any
merger, consolidation, sale of material assets, tender
-20-
offer, recapitalization, purchase of shares, proxy solicitation or other
business combination involving the Seller, or any division of the Seller or (b)
provide any non-public information concerning the business, properties or assets
of the Seller to any person or entity (other than the Buyer). The Seller shall
immediately notify the Buyer of, and shall disclose to the Buyer all details of,
any inquiries, discussions or negotiations of the nature described in the first
sentence of this Section 4(f).
5. Conditions to Consummation of Asset Purchase.
a. Conditions to Each Party's Obligations. The respective obligations
of the Seller and the Buyer to consummate the transactions contemplated by this
Agreement to occur at the Closing are subject to the condition that no action,
suit or proceeding shall be pending or threatened by or before any Governmental
Entity wherein an unfavorable judgment, order, decree, stipulation or injunction
would (i) prevent consummation of any of the transactions contemplated by this
Agreement, (ii) cause any of the transactions contemplated by this Agreement to
be rescinded following consummation or (iii) affect adversely the right of the
Buyer to own, operate or control the Assets following the Closing, and no such
judgment, order, decree, stipulation or injunction shall be in effect.
b. Conditions to Obligations of the Buyer. The obligation of the Buyer
to consummate the transactions contemplated by this Agreement to occur at the
Closing is subject to the satisfaction of the following additional conditions:
i. the Seller shall have obtained all of the waivers, permits,
consents, approvals or other authorizations, and effected all of the
registrations, filings and notices, referred to in Section 4(b);
ii. the representations and warranties of the Stockholder and the
Seller set forth in Section 2 shall be true and correct when made on the date
hereof and shall be true and correct as of the Closing as if made as of such
Closing, except for representations and warranties made as of a specific date,
which shall be true and correct as of such date;
iii. the Seller shall have performed or complied with their
agreements and covenants required to be performed or complied with under this
Agreement as of or prior to the Closing;
iv. the Seller shall have delivered to the Buyer a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that the conditions specified in Section 5(a) and clauses (i) through
(iii) of this Section 5(b) are satisfied in all respects;
-21-
v. the Buyer shall have received from counsel to the Seller an
opinion with respect to the matters set forth in Exhibit C attached hereto,
addressed to the Buyer and dated as of the Closing Date;
vi. all actions to be taken by the Seller in connection with the
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments and other documents required to effect the transactions
contemplated hereby shall be reasonably satisfactory in form and substance to
the Buyer;
vii. the Buyer shall have received at or prior to the Closing
such documents, instruments or certificates as the Buyer may reasonably request
including, without limitation:
a. a bill of sale substantially in the form of Exhibit E;
b. such instruments of conveyance, assignment and transfer,
in form and substance satisfactory to the Buyer, as shall be appropriate to
convey, transfer and assign to, and to vest in, the Buyer, good, clear, record
and marketable title to the Assets other than the Real Property (including all
necessary bills of sale and certificates of title for motor vehicles owned by
the Seller);
c. such warranty deeds and instruments of conveyance,
assignment and transfer, in form and substance satisfactory to the Buyer, as
shall be appropriate to convey, transfer and assign to, and to vest in, the
Buyer, good, clear, record, marketable and insurable title to the Real Property;
d. all literature and other documentation relating to the
Seller's business, all in form and substance satisfactory to the Buyer;
e. such contracts, files and other data and documents
pertaining to the Assets or the Seller's business as the Buyer may reasonably
request;
f. [intentionally deleted]
g. such certificates of the Seller's officers and such other
documents evidencing satisfaction of the conditions specified in Section 5(b) as
the Buyer shall reasonably request;
h. certificates of the Secretary of State of the State of
New York as to the legal existence and good standing (including tax) of the
Seller in their respective states of incorporation;
i. certificates of the Secretary of the Seller attesting to
the incumbency of the Seller's officers, the authenticity of the resolutions
authorizing
-22-
the transactions contemplated by the Agreement, and the authenticity and
continuing
validity of the charter documents delivered pursuant to Section 2;
j. estoppel certificates from each lessor from whom the
Seller leases real or personal property consenting to the assumption of such
lease by the Buyer and representing that there are no outstanding claims against
the Seller under any such lease;
k. estoppel certificates from each tenant to whom the Seller
leases real property consenting to the assumption of such lease by the Buyer and
representing that there are no outstanding claims against the Seller under any
such lease;
l. a cross receipt executed by the Buyer and the Seller;
m. such other documents, instruments or certificates as the
Buyer may reasonably request.
c. Conditions to Obligations of the Seller. The obligation of the
Seller to consummate the transactions contemplated by this Agreement to occur at
the Closing is subject to the satisfaction of the following additional
conditions:
i. the representations and warranties of the Buyer set forth in
Section 3 shall be true and correct when made on the date hereof and shall be
true and correct as of the respective Effective Time as if made as of the
respective Effective Time, except for representations and warranties made as of
a specific date, which shall be true and correct as of such date;
ii. the Buyer shall have performed or complied with its
agreements and covenants required to be performed or complied with under this
Agreement as of or prior to the respective Effective Time;
iii. the Buyer shall have delivered to the Seller a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that each of the conditions specified in clauses (i) and (ii) of this
Section 5(c) is satisfied in all respects;
iv. the Seller shall have received from New York counsel to the
Buyer an opinion with respect to the matters set forth in Exhibit D attached
hereto, addressed to the Seller and dated as of the Closing Date;
v. all actions to be taken by the Buyer in connection with the
consummation of the transactions contemplated hereby and all certificates,
opinions,
-23-
instruments and other documents required to effect the transactions contemplated
hereby shall be reasonably satisfactory in form and substance to the Seller; and
vii. The Seller shall have received at or prior to the Closing
such documents, instruments or certificates as the Seller may reasonably request
including, without limitation:
a. such certificates of the Buyer's officers and such other
documents evidencing satisfaction of the conditions specified in this Section
5(c) as the Seller shall reasonably request;
b. a certificate of the Secretary of State of the State of
New York as to the legal existence and good standing of the Buyer in New York;
c. a certificate of the Secretary of the Buyer attesting to
the incumbency of the Buyer's officers, the authenticity of the resolutions
authorizing the transactions contemplated by this Agreement, and the
authenticity and continuing validity of the charter documents and by-laws;
d. payment of the cash portion of the Purchase Price;
e. the Instrument of Assumption executed by the Buyer and
accepted by the Seller; and
h. a cross receipt executed by the Buyer and the Seller.
6. Indemnification.
a. Indemnification. The Stockholder and the Seller, jointly and
severally, shall indemnify the Buyer and its officers, directors, stockholders
and affiliates (and the officers, directors and stockholders of its affiliates)
(the "Indemnified Parties") and hold the Indemnified Parties harmless against,
any and all debts, obligations and other liabilities (whether absolute, accrued,
contingent, fixed or otherwise, or whether known or unknown, or due or to become
due or otherwise), monetary damages, fines, fees, penalties, interest
obligations, deficiencies, losses and expenses (including without limitation
amounts paid in settlement, interest, court costs, costs of investigators, fees
and expenses of attorneys, accountants, financial advisors and other experts,
and other expenses of litigation) incurred or suffered by the Indemnified
Parties ("Damages"):
i. resulting from, relating to or constituting any
misrepresentation, breach of warranty or failure to perform any covenant or
agreement of the Stockholder or the Seller contained in this Agreement or in any
-24-
document delivered by the Stockholder or the Seller pursuant to this Agreement
or in connection with the transactions contemplated by this Agreement;
ii. resulting from any claims against, or liabilities or
obligations of, the Seller or against the Assets not specifically assumed by the
Buyer pursuant to this Agreement;
iii. resulting from any tax liabilities or obligations of the
Seller;
iv. resulting from any violation by the Seller of, or any failure
by the Seller to comply with any law, ruling, order, decree, regulation or
zoning, environmental or permit requirement applicable to the Seller to its
business or properties, whether or not any such failure or violation has been
disclosed to the Buyer, including any costs incurred by the Buyer (A) in order
to bring the Assets into compliance with environmental laws as a result of
noncompliance with such laws on or before the Closing Date or (B) in connection
with the transfer of the Asset;
v. resulting from the failure of the Buyer or the Seller to
obtain the protections afforded by compliance with the notification and other
requirements of the bulk sales laws in force in the jurisdictions in which such
laws may be applicable to the Seller or the transactions contemplated by this
Agreement;
vi. resulting from any claims against, or liabilities or
obligations of, the Seller with respect to obligations under Employee Plans not
specifically assumed by the Buyer pursuant to this Agreement;
vii. resulting from any claims against the Seller or the Assets
by or on behalf of Allied Waste Industries, Inc.; and
viii. resulting from any claims against the Seller, the
Stockholder, or the Assets by or on behalf of Robert Seymour.
b. Method of Asserting Claims.
i. If a third party asserts that an Indemnified Party is liable
to such third party for a monetary or other obligation which may constitute or
result in Damages for which the Indemnified Party may be entitled to
indemnification pursuant to this Section 6, and the Indemnified Party reasonably
determines that it has a valid business reason to fulfill such obligation, then
(i) the Indemnified Party shall be entitled to satisfy such obligation, without
prior notice to or consent from the Seller, (ii) the Indemnified Party may make
a claim for indemnification pursuant to this Section 6, and (iii) the
Indemnified Party shall be reimbursed for any such Damages for which it is
entitled to indemnification pursuant to this Section 6 (subject
-25-
to the right of the Seller to dispute the Indemnified Parties entitlement to
indemnification under the terms of this Section 6).
ii. The Buyer shall give prompt written notification to the
Seller of the commencement of any action, suit or proceeding relating to a third
party claim for which indemnification pursuant to this Section 6 may be sought;
provided, however, that no delay on the part of the Buyer in notifying the
Seller shall relieve the Seller of any liability or obligation hereunder except
to the extent of any damage or liability caused by or arising out of such
failure. Within 20 days after delivery of such notification, the Seller may,
upon written notice thereof to the Buyer, assume control of the defense of such
action, suit or proceeding with counsel reasonably satisfactory to the Buyer,
provided the Seller acknowledges in writing to the Buyer that any damages,
fines, costs or other liabilities that may be assessed against the Indemnified
Parties in connection with such action, suit or proceeding constitute Damages
for which the Indemnified Parties shall be entitled to indemnification pursuant
to this Section 6. If the Seller does not so assume control of such defense, the
Buyer shall control such defense. The party not controlling such defense may
participate therein at its own expense; provided that if the Seller assumes
control of such defense and the Buyer reasonably concludes that the indemnifying
parties and the Indemnified Parties have conflicting interests or different
defenses available with respect to such action, suit or proceeding, the
reasonable fees and expenses of counsel to the Indemnified Parties shall be
considered "Damages" for purposes of this Agreement. The party controlling such
defense shall keep the other party advised of the status of such action, suit or
proceeding and the defense thereof and shall consider in good faith
recommendations made by the other party with respect thereto. The Buyer shall
not agree to any settlement of such action, suit or proceeding without the prior
written consent of the Seller, which shall not be unreasonably withheld. The
Seller shall not agree to any settlement of such action, suit or proceeding
without the prior written consent of the Buyer, which shall not be unreasonably
withheld.
c. Survival. The representations and warranties of the
Stockholder and the Sellers set forth in this Agreement shall survive the
Closing and the consummation of the transactions contemplated hereby and
continue until the fifth anniversary of the Closing Date and shall not be
affected by any examination made for or on behalf of the Buyer or the knowledge
of any of the Buyer's officers, directors, stockholders, employees or agents. If
a notice is given before the expiration of such periods, then (notwithstanding
the expiration of such time period) the representation or warranty applicable to
such claim shall survive until, but only for purposes of, the resolution of such
claim.
d. Limitations. Except with respect to claims based on fraud, the
rights of the Buyer under this Section 6 shall be the exclusive remedy of the
Buyer with respect to claims resulting from or relating to any
misrepresentation, breach of
-26-
warranty or failure to perform any covenant or agreement of the Stockholder or
the Sellers contained in this Agreement (provided that nothing contained in this
Agreement shall limit or restrict any right or remedy the Buyer may have under
any Environmental Law).
7. Termination.
a. Termination of Agreement. This Agreement may be terminated prior to
the Closing Date as provided below:
i. the Stockholder, the Sellers and the Buyer may terminate this
Agreement by mutual written consent;
ii. the Buyer may terminate this Agreement by giving written
notice to the Seller in the event the Stockholder or the Seller is in breach,
and the Stockholder and the Seller may terminate this Agreement by giving
written notice to the Buyer in the event the Buyer is in breach, of any material
representation, warranty or covenant contained in this Agreement, and such
breach is not remedied within 10 days of delivery of written notice thereof;
iii. the Buyer may terminate this Agreement by giving written
notice to the Seller if the Closing shall not have occurred on or before the
60th day following the date of this Agreement by reason of the failure of any
condition precedent under Section 5(a) or 5(b) hereof (unless the failure
results primarily from a breach by the Buyer of any representation, warranty or
covenant contained in this Agreement);
iv. the Stockholder and the Seller may terminate this Agreement
by giving written notice to the Buyer if the Closing shall not have occurred on
or before the 60th day following the date of this Agreement by reason of the
failure of any condition precedent under Section 5(a) or 5(c) hereof (unless the
failure results primarily from a breach by the Stockholder or any Seller of any
representation, warranty or covenant contained in this Agreement).
b. Effect of Termination. If any Party terminates this Agreement
pursuant to Section 7(a), all obligations of the Parties hereunder shall
terminate without any liability of any Party to any other Party (except for any
liability of any Party for breaches of this Agreement); provided, however, that
the confidentiality provisions contained in Section 4(d) shall survive any such
termination.
8. Miscellaneous.
a. Press Releases and Announcements. No Party shall issue any press
release or public disclosure relating to the subject matter of this Agreement
-27-
without the prior written approval of the other Parties; provided, however, that
any Party may make any public disclosure it believes in good faith is required
by law or regulation (in which case the disclosing Party shall advise the other
Parties and provide them with a copy of the proposed disclosure prior to making
the disclosure).
b. No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns.
c. Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, with respect to the subject matter hereof.
d. Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Parties; provided, however, that the Buyer may assign its rights
and obligations hereunder to CWS or any affiliate thereof.
e. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
f. Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
g. Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly delivered three
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent via a reputable
nationwide overnight courier service, in each case to the intended recipient as
set forth below:
If to the Seller or to the Stockholder: Copy to:
--------------------------------------- --------
c/o Kenneth H. Mead Earl D. Butler, P.C.
1669 N.W. 114th Loop Vestal Professional Building Annex
Ocala, FL 34475 231-241 Main Street
Vestal, NY 13850
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If to the Buyer: Copy to:
---------------- --------
Casella Waste Management of Jeffrey A. Stein, Esq.
N.Y., Inc. Hale and Dorr
Box 866 60 State Street
25 Greens Hill Lane Boston, MA 02109
Rutland, VT 05702
Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the party for
whom it is intended. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.
h. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
New York.
i. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by all
of the Parties. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
j. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
-29-
k. Expenses. Each of the Parties shall bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
l. Specific Performance. Each of the Parties acknowledges and agrees
that one or more of the other Parties would be damaged irreparably in the event
any of the provisions of this Agreement are not performed in accordance with
their specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to the provisions of
Section 8(m)), in addition to any other remedy to which it may be entitled, at
law or in equity.
m. Submission to Jurisdiction. Each of the Parties (a) submits to the
jurisdiction of any state or federal court sitting in the State of Vermont in
any action or proceeding arising out of or relating to this Agreement, (b)
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court, and (c) agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety or other
security that might be required of any other Party with respect thereto. Any
Party may make service on another Party by sending or delivering a copy of the
process to the Party to be served at the address and in the manner provided for
the giving of notices in Section 8(g). Nothing in this Section 8(m), however,
shall affect the right of any Party to serve legal process in any other manner
permitted by law.
n. Construction. The language used in this Agreement shall be deemed
to be the language chosen by the Parties hereto to express their mutual intent,
and no rule of strict construction shall be applied against any Party. Any
reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise.
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o. Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
CASELLA WASTE MANAGEMENT
OF N.Y., INC.
By:
----------------------------------
Title:
------------------------------
KERKIM, INC.
By:
----------------------------------
Title:
------------------------------
--------------------------------------
KENNETH H. MEAD
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Execution Copy #1
REORGANIZATION AGREEMENT
Asset Purchase Agreement dated as of January 17, 1997 by and among
KENNETH H. MEAD (the "Stockholder"), SUPERIOR DISPOSAL SERVICES, INC., a New
York corporation ("Superior"), KENSUE, INC., a Pennsylvania corporation
("KENSUE"), S.D.S. at PA, INC., a Pennsylvania corporation and a wholly-owned
subsidiary of Kensue ("SDS"), CLAWS REFUSE, INC., a Pennsylvania corporation and
a wholly-owned subsidiary of Kensue ("CLAWS," and collectively with Superior,
Kensue and SDS, the "Sellers"; the Sellers each being referred to as a
"Seller"), and CASELLA WASTE MANAGEMENT OF N.Y., INC., a New York corporation
(the "New York Buyer") and CASELLA WASTE MANAGEMENT OF PENNSYLVANIA, INC., a
Pennsylvania corporation (the "Pennsylvania Buyer"). The Stockholder, the
Sellers and the Buyer are sometimes referred to collectively as the "Parties" or
individually as a "Party." The New York Buyer and the Pennsylvania Buyer are
referred to collectively as the "Buyer".
This Agreement contemplates a tax-free reorganization within the
meaning of Section 368(C) of the Internal Revenue Code of 1986, as amended, by
providing for an exchange by the Sellers (as defined herein) of all of the
assets of the Sellers for the capital stock of Casella Waste Systems, Inc., the
parent company of the Buyer.
W I T N E S S E T H:
WHEREAS, the Stockholder owns all of the shares of capital stock of
each of Superior and Kensue; and
WHEREAS, the Buyer desires to purchase, and each Seller desires to
sell, substantially all of its assets and business, for the consideration set
forth below and the assumption of certain of the Sellers' liabilities set forth
below, subject to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto do hereby agree as follows:
1. Purchase and Sale of the Assets.
a. Delivery of the Assets. Subject to and upon the terms and
conditions of this Agreement, at the closing of the transactions contemplated by
this Agreement (the "Closing"), Superior shall sell, transfer, convey, assign
and deliver to the New York Buyer, and each of Kensue, SDS and Claws shall sell,
transfer, convey, assign and deliver to the Pennsylvania Buyer, and the
respective Buyer shall
purchase from the respective Seller(s), all of the following properties and
assets of each such Seller:
i. all inventories, including of office supplies,
maintenance supplies, packaging materials, spare parts and similar items
(collectively, the "Inventory") which exist on the Closing Date (as defined
below);
ii. all accounts, accounts receivable, notes and
notes receivable existing on the Closing Date which are payable to such Seller,
including any security held by such Seller for the payment thereof
(collectively, the "Accounts Receivable");
iii. all cash, prepaid expenses, deposits, bank
accounts and other similar assets of such Seller existing on the Closing Date,
including the cash represented by such assets;
iv. all rights of such Seller under the contracts,
agreements, leases, licenses and other instruments set forth on Section 2(o) of
the Disclosure Schedule (collectively, the "Contract Rights");
v. all real property of such Seller set forth on
Section 2(k) of the Disclosure Schedule, together with all buildings, fixtures
and improvements located on or attached thereto, including such Seller's right,
title and interest in and to all leases, subleases, franchises, licenses,
permits, easements and rights-of-way which are appurtenant to said real property
(collectively, the "Real Property");
vi. all books, records and accounts, correspondence,
production records, technical, accounting, manufacturing and procedural manuals,
customer lists, employment records, studies, reports or summaries relating to
any environmental conditions or consequences of any operation, present or
former, as well as all studies, reports or summaries relating to any
environmental aspect or the general condition of the Assets, and any
confidential information which has been reduced to writing relating to or
arising out of the business of such Seller;
vii. All rights of such Seller under express or
implied warranties from the suppliers of such Seller;
viii. the motor vehicles and other rolling stock
owned by such Seller on the Closing Date;
ix. all of the machinery, containers, equipment,
tools, production reels and spools, tooling, dies, production fixtures,
maintenance machinery and equipment, furniture, leasehold improvements and
construction in
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progress owned by such Seller on the Closing Date whether or not reflected as
capital assets in the accounting records of such Seller (collectively, the
"Fixed Assets");
x. all of such Seller's right, title and interest in
and to all intangible property rights, including but not limited to trade
secrets, processes, know-how, trade names, including, as applicable to the
respective Seller, the names "Superior Disposal Services, Inc.," "Kensue, Inc.,"
"S.D.S. at PA, Inc." and "Claws Refuse, Inc." or any derivation thereof and any
assumed names under which such Seller has operated, owned or, where not owned,
used by such Seller in its business and all licenses and other agreements to
which such Seller is a party (as licensor or licensee) or by which such Seller
is bound relating to any of the foregoing kinds of property or rights to any
"know-how" or disclosure or use of ideas (collectively, the "Intangible
Property"); and
xi. except as specifically provided in Section 1(b)
below, all other assets, properties, claims, rights and interests of each Seller
which exist on the Closing Date, of every kind and nature and description,
whether tangible or intangible, real, personal or mixed.
b. Notwithstanding the provisions of Section 1(a) above, the
assets to be transferred to the Buyer under this Agreement shall not include any
interest of any of the Sellers in or to [the landfill located in Covert, New
York] (the "Covert Landfill") or any other assets listed on Schedule 1(b)
attached hereto (the "Excluded Assets").
c. The Inventory, Accounts Receivable, Contract Rights, Real
Property, Fixed Assets, Intangible Property and other properties, assets and
businesses of the Sellers described in Section 1(a) above, other than the
Excluded Assets, shall be referred to collectively as the "Assets."
d. Further Assurances. At any time and from time to time after
the Closing, at the Buyer's request and without further consideration, each
Seller promptly shall execute and deliver such instruments of sale, transfer,
conveyance, assignment and confirmation, and take such other action, as the
Buyer may reasonably request to more effectively transfer, convey and assign to
the Buyer, and to confirm the Buyer's title to, all of the Assets, to put the
Buyer in actual possession and operating control thereof, to assist the Buyer in
exercising all rights with respect thereto and to carry out the purpose and
intent of this Agreement.
e. Base Purchase Price. The purchase price for the Assets (the
"Purchase Price") shall be Six Hundred Thirty-Four Thousand Four Hundred
(634,400) shares of the Class A Common Stock of Casella Waste Systems, Inc., a
Delaware corporation (Casella Waste Systems, Inc. being hereinafter referred to
as "CWS" and the Class A Common Stock of CWS being hereinafter referred to as
the
-3-
"CWS Common Stock"), subject to adjustment as provided below. The Purchase Price
shall be paid as follows: (A) at the Closing (as defined below), the Buyer will
deliver to the Sellers certificates representing Five Hundred Seventy Thousand
Nine Hundred Sixty (570,960) shares of CWS Common Stock (the "Initial Shares");
and (B) on the first anniversary of the Closing, the Buyer will deliver to the
Sellers a certificate representing Sixty-Three Thousand Four Hundred Forty
(63,440) shares of CWS Common Stock (the "Retained Shares"), subject to
adjustment pursuant to the indemnification obligations of the Stockholder and
the Sellers set forth in this Agreement and the adjustment provisions set forth
in Section 1(g). The Initial Shares and the Retained Shares are hereinafter
referred to as the "Shares."
The Parties agree that the calculation of the Purchase Price has been
based in part on assumptions made by each of the Parties as to the valuation of
the Buyer and of CWS. Accordingly, the parties hereby further agree that the
Buyer will issue additional shares of CWS Common Stock or the Sellers (or the
Stockholder) will surrender certain of the Shares, as follows:
i. In the event that (A) CWS completes an underwritten
registered initial public offering
of the CWS Common Stock and (I) the
public offering price (with respect
to any Shares which are sold in such
offering) or (II) the average
closing sale price per share of the
CWS Common Stock over the ten
trading days ending on the twentieth
day after the date of the final
prospectus relating to such offering
(with respect to Shares not sold in
such offering) (the "Public Market
Price") is less than $20 (subject to
appropriate adjustment in the event
of any stock dividend, stock split,
combination or other
recapitalization affecting such
shares) ("Twenty Dollars Per
Share"); or
(B) CWS is acquired (whether by merger,
asset purchase, stock sale or
otherwise) in a transaction in which
the holders of the CWS Common Stock
receive publicly traded shares of
the acquiror, and the value of the
CWS Common Stock in such acquisition
(the "Acquisition Price") is less
than Twenty Dollars Per Share,
then the Buyer will issue additional shares of CWS Common
Stock as follows:
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If the Public Market Price or Then the Buyer will issue the
the Acquisition Price is: following number of additional
shares of CWS Common
Stock:
Between $19 and $20 Pro rata between 33,389 and 0
$19 33,389
Between $18 and $19 Pro rata between 70,489 and
33,389
$18 or less 70,489
ii. In the event that (A) CWS completes an underwritten
registered initial public offering
of the CWS Common Stock and the
Public Market Price is greater than
Twenty Dollars Per Share; or
(B) CWS is acquired (whether by merger,
asset purchase, stock sale or
otherwise) in a transaction in which
the holders of the CWS Common Stock
receive publicly traded shares of
the acquiror, and the Acquisition
Price is greater than Twenty Dollars
Per Share,
then the Sellers and the Stockholder shall, jointly and
severally, be liable to return to the Buyer a number of Shares
as follows:
If the Public Market Price or Then the Seller and the
the Acquisition Price is: Stockholder will return to the
Buyer the following number of
shares of CWS Common
Stock:
Between $20 and 521 Pro rata between 0 and 30,210
$21 or more 30,210
Notwithstanding the foregoing, no shares of CWS Common Stock shall be issued by
the Buyer or returned by the Sellers or the Stockholder if the event giving rise
to such
-5-
adjustment is on or after the fifth anniversary of the Closing. The foregoing
right shall not be assignable by the Stockholders or the Sellers.
f. Assumption of Liabilities. At the Closing, the Buyer shall
execute and deliver an Instrument of Assumption of Liabilities (the "Asset
Instrument of Assumption") substantially in the form attached hereto as Exhibit
B-1, pursuant to which it shall assume and agree to perform, pay and discharge
the following liabilities, obligations and commitments of each of the Sellers
(the "Assumed Liabilities"):
i. All trade accounts payable reflected on the
balance sheet of such Seller as of December 31, 1996 previously delivered to the
Buyer (the "Current Balance Sheet"), less any payments made from December 31,
1996 (the "Balance Sheet Date") to the Closing Date and less any trade accounts
payable of such Seller to any affiliate of such Seller;
ii. All obligations of such Seller continuing after
the Closing under the leases, contracts and employee benefit plans set forth on
Schedule 1(f) attached hereto which become due and payable after the Closing
Date; and
iii. All other liabilities and obligations of such
Seller specifically set forth in Schedule 1(f) attached hereto.
The Buyer shall not at the Closing assume or agree to perform, pay or discharge,
and each Seller shall each remain unconditionally liable for, all liabilities,
obligations and commitments, fixed or contingent, of such Seller other than the
Assumed Liabilities. Without limiting the foregoing, any and all liabilities of
any Seller arising from environmental laws (including with respect to the Covert
Landfill) and, except as provided above, in any way related to events prior to
the Closing, shall be the sole responsibility of such Seller.
g. Purchase Price Adjustments.
i. As promptly as possible following the Closing
Date, the Buyer shall cause Piaker & Lyons, independent public accountants (the
"Closing Auditors"), to conduct a review of the balance sheet of the Sellers as
of the Closing Date. Not later than 60 days after the Closing Date, the Buyer
shall cause the Closing Auditors to deliver a balance sheet with respect to the
Sellers as of the Closing Date (as corrected pursuant to this Section 1(g), the
"Closing Balance Sheet") to the Buyer and to the Sellers. The Closing Balance
Sheet shall be prepared in accordance with generally accepted accounting
principles, applied consistently with the Sellers' past practices and methods
(to the extent applicable under generally accepted accounting principles).
-6-
ii. The Seller and one firm of independent public
accountants acting on behalf of the Sellers (the "Sellers' Advisors") shall have
the right to review the work papers of the Closing Auditors utilized in
preparing the Closing Balance Sheet, and shall have full access to the books,
records, properties and personnel of the Sellers (and Buyer's personnel
participating in the review) for purposes of verifying the accuracy and fairness
of the presentation of the Closing Balance Sheet.
iii. The values or amounts for each item reflected
on the Closing Balance Sheet shall be binding upon the Buyer and the Sellers
unless the Sellers give written notice, within 30 calendar days after their
receipt of the Closing Balance Sheet, of disagreement with any values or amounts
shown on the Closing Balance Sheet, specifying, as to each such item in
reasonable detail, the nature and extent of such disagreement (the "Dispute
Notice"). If the Buyer and the Sellers are unable to resolve any such
disagreement within 30 days after the date of the Dispute Notice, the
disagreement shall be submitted to arbitration in Syracuse, New York in
accordance with the rules of the American Arbitration Association. If, as a
result of the resolution of any disputes by agreement pursuant to this Section
1(g), or by arbitration, any amount shown on the Closing Balance Sheet is
determined to be erroneous, such erroneous amount shall be deleted from the
Closing Balance Sheet and the correct amount shall be inserted in lieu thereof.
The Closing Balance Sheet, as so corrected, shall constitute the Closing Balance
Sheet for purposes of this Agreement.
iv. The Buyer shall pay the fees and disbursements of
the Closing Auditors. The fees and disbursements of the Sellers' Advisors shall
be paid by the Sellers.
v. Immediately upon the expiration of the 30 calendar
day period following the Sellers' receipt of the Closing Balance Sheet, if no
Dispute Notice is given by the end of such period, or immediately upon the
resolution of disputes, if any, pursuant to this Section 1(g), the Purchase
Price shall be adjusted as follows, based upon the Closing Balance Sheet (as so
adjusted, the "Final Purchase Price");
x. If the combined liabilities as shown on
the Closing Balance Sheet (excluding trade accounts payable and accrued
liabilities) is greater than [$7,552,103 less debt on Rt 49 Property] ("Excess
Liabilities"), and/or if the combined sum of the cash and trade receivables of
the Sellers exceeds the combined sum of the trade accounts payable and accrued
liabilities of the Sellers as shown on the Closing Balance Sheet by less than
the corresponding calculation shown on the Current Balance Sheet (a "Working
Capital Deficiency"), the Purchase Price shall be reduced by one share of CWS
Common Stock for every Twenty Dollars ($20) of Excess Liabilities or Working
Capital Deficiency (provided that if there exists both Excess Liabilities and a
Working Capital Deficiency, the adjustment shall be in the amount of the greater
of such amount and not the aggregate thereof).
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y. If the combined liabilities of the
Sellers (excluding trade accounts payable and accrued liabilities) is less than
[$7,552,103 less debt on Rt 49 Property] (the "Favorable Liabilities Variance")
and if the combined sum of the cash and trade receivables of the Sellers
(excluding receivables from affiliates of the Sellers) exceeds the combined sum
of the trade accounts payable and accrued liabilities of the Sellers ("Excess
Working Capital") as shown on the Closing Balance Sheet by more than the
corresponding calculation shown on the Current Balance Sheet ("Excess Working
Capital"), Buyer shall deliver to Sellers one additional share of CWS Common
Stock for each Twenty Dollars ($20) of the lesser of (A) such Favorable
Liabilities Variance, or (B) such Excess Working Capital.
vi. Any adjustment in the Purchase Price payable to
the Buyer shall be satisfied first from the Retained Shares. To the extent that
the Retained Shares shall not be sufficient to satisfy any adjustment provided
for herein, the Stockholder and the Sellers shall be jointly and severally
liable for any deficiency (provided, however, that the Stockholder and the
Sellers may satisfy such obligation by surrendering Initial Shares at a value of
$20 per share).
h. Closing. The closing of the purchase and sale of the Assets
(the "Closing") shall take place at the offices of Earl D. Butler, P.C., 231-241
Man Street, Vestal, New York 13160, or at such other place as the parties may
mutually agree at 10:00 A.M., on January __ 1997 or as soon as practicable
thereafter (the "Closing Date").
i. Apportionment. Prepaid premiums on insurance if assigned as
herein provided, water and sewer use charges, transfer taxes and recording fees,
if any, incurred in connection with the transfer of the Assets contemplated
hereby, and the real property taxes for the then current tax period, shall be
apportioned and adjusted as of the Closing Date and the net amount thereof shall
be added to or deducted from, as the case may be, the Purchase Price at a rate
of one share of CWS Common Stock for every $20 of such adjustment. If the amount
of said real property taxes has not been determined at the Closing Date, they
shall be apportioned on the basis of such taxes assessed for the preceding year,
with a reapportionment as soon as the new tax rate and valuation can be
ascertained; and, if the taxes which are to be apportioned shall thereafter be
reduced by abatement, the amount of such abatement, less the reasonable cost of
obtaining the same, shall be apportioned between the parties, provided that no
party shall be obligated to institute or prosecute proceedings for an abatement
unless otherwise agreed. If such proceedings are commenced, the parties
commencing the same shall give the other party notice thereof and shall
prosecute such proceedings and not discontinue the same without first giving the
other party notice of its intention so to do and reasonable opportunity to be
substituted in such proceedings; and the other party agrees to cooperate in such
proceedings without being obligated to incur any expense in connection
therewith.
-8-
2. Joint and Several Representations and Warranties of the Stockholder
and the Sellers. Each of the Sellers and the Stockholder, jointly and severally,
represent and warrant to the Buyer that the statements contained in this Article
II are true and correct, except as set forth in the disclosure schedule attached
hereto (the "Disclosure Schedule").
a. Organization, Qualification and Corporate Power. Each of
the Sellers is a corporation duly organized, validly existing and in corporate
and tax good standing under the laws of the state of its incorporation. Each of
the Sellers is duly qualified to conduct business and is in corporate and tax
good standing under the laws of each jurisdiction in which the nature of its
businesses or the ownership or leasing of its properties requires such
qualification. Each of the Sellers has all requisite corporate power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it. Each of the Sellers has furnished to the
Buyer true and complete copies of its charter and Bylaws, each as amended and as
in effect on the date hereof. None of the Sellers is in default under or in
violation of any provision of its charter or Bylaws.
b. Capitalization. The authorized, issued and outstanding
shares of capital stock of each of the Sellers are as set forth in Section 2(b)
of the Disclosure Schedule. Section 2(b) of the Disclosure Schedule sets forth a
complete and accurate list of all beneficial and record stockholders of each
Seller, indicating the number of shares of each Seller held by each stockholder.
All of the issued and outstanding shares of capital stock of the Sellers are
duly authorized, validly issued, fully paid, nonassessable and free of all
preemptive rights. There are no outstanding or authorized options, warrants,
rights, agreements or commitments to which any of the Sellers is a party or
which are binding upon any of the Sellers providing for the issuance,
disposition or acquisition of any of its capital stock. There are no outstanding
or authorized stock appreciation, phantom stock or similar rights with respect
to any Seller. There are no agreements, voting trusts, proxies, or
understandings with respect to the voting, or registration under the Securities
Act, of any shares of capital stock of the Sellers. All of the issued and
outstanding shares of capital stock of the Sellers were issued in compliance
with applicable federal and state securities laws. The Stockholder has not
entered into any agreement to sell, pledge or otherwise encumber any of his
shares of the capital stock of the Sellers.
c. Authorization of Transaction. Each of the Sellers has all
requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement,
the performance by the Sellers of this Agreement and the consummation by the
Sellers of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of the Sellers. This
Agreement has been duly and validly executed and delivered by the Stockholder
and the Sellers and constitutes
-9-
a valid and binding obligation of the Stockholder and the Sellers, enforceable
against such persons in accordance with its terms.
d. Noncontravention. Neither the execution and delivery of
this Agreement by Stockholder and the Sellers, nor the consummation by the
Sellers of the transactions contemplated hereby, will (a) conflict with or
violate any provision of the charter or By-laws of any of the Sellers, (b)
require on the part of the Stockholder or the Sellers any filing with, or any
permit, authorization, consent or approval of, any court, arbitrational
tribunal, administrative agency or commission or other governmental or
regulatory authority or agency (a "Governmental Entity"), (c) conflict with,
result in a breach of, constitute (with or without due notice or lapse of time
or both) a default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify or cancel, or require any notice, consent
or waiver under, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Security Interest (as defined below) or other arrangement to which
the Stockholder or any of the Sellers is a party or by which the Stockholder or
any of the Sellers is bound or to which any of their assets is subject, (d)
result in the imposition of any Security Interest upon any assets of the
Stockholder or any of the Sellers or (e) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Stockholder or any of the
Sellers, or any of their properties or assets. For purposes of this Agreement,
"Security Interest" means any mortgage, pledge, security interest, encumbrance,
charge, or other lien (whether arising by contract or by operation of law),
other than (i) mechanic's, materialmen's, and similar liens, (ii) liens arising
under worker's compensation, unemployment insurance, social security,
retirement, and similar legislation, and (iii) liens on goods in transit
incurred pursuant to documentary letters of credit, in each case arising in the
ordinary course of business consistent with past custom and practice (including
with respect to frequency and amount) ("Ordinary Course of Business") of the
Sellers and not material to the Sellers.
e. Subsidiaries. Except as set forth in Section 2(e) of the
Disclosure Schedule, none of the Sellers controls directly or indirectly or has
any direct or indirect equity participation in any corporation, partnership,
trust, or other business association.
f. Financial Statements. The Sellers have provided to the
Buyer (a) the balance sheets and statements of income, changes in stockholders'
equity and cash flows for each of the three fiscal years for each of the Sellers
in the three-year period ending December 31, 1995 (each of which has been
reviewed in accordance with standards established by the American Institute of
Certified Public Accountants); and (b) the unaudited balance sheet and
statements of income, changes in stockholders' equity and cash flows as of and
for the fiscal year ended as of December 31, 1996 (the "Most Recent Fiscal
Period End"). Such financial statements (collectively, the "Financial
Statements") have been prepared in accordance with
-10-
United States generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods covered thereby, fairly present the
financial condition, results of operations and cash flows of the Sellers as of
the respective dates thereof and for the periods referred to therein and are
consistent with the books and records of the Sellers; provided, however, that
the Financial Statements referred to in clause (b) above are subject to normal
recurring year-end adjustments (which will not be material) and do not include
footnotes.
g. Absence of Certain Changes. Since the Most Recent Fiscal
Period End, (a) there has not been any material adverse change in the assets,
business, financial condition or results of operations of any of the Sellers,
nor has there occurred any event or development which could reasonably be
foreseen to result in such a material adverse change in the future, and (b) none
of the Sellers has taken any of the actions not in the Ordinary Course of
Business.
h. Undisclosed Liabilities. None of the Sellers has any
liability (whether known or unknown, whether absolute or contingent, whether
liquidated or unliquidated and whether due or to become due), except for (a)
liabilities shown on the balance sheet referred to in clause (b) of Section 2(f)
(the "Most Recent Balance Sheet"), (b) liabilities which have arisen since the
Most Recent Fiscal Period End in the Ordinary Course of Business and which are
similar in nature and amount to the liabilities which arose during the
comparable period of time in the immediately preceding fiscal period and (c)
contractual liabilities incurred in the Ordinary Course of Business which are
not required by GAAP to be reflected on a balance sheet.
i. Tax Matters.
i. Each of the Stockholder and the Sellers has filed
all Tax Returns (as defined below) that he or it was required to file and all
such Tax Returns were correct and complete in all material respects. Each of the
Stockholder and the Sellers has paid all Taxes (as defined below) that are shown
to be due on any such Tax Returns. The unpaid Taxes of the Sellers for tax
periods through the date of the Most Recent Balance Sheet do not exceed the
accruals and reserves for Taxes set forth on the Most Recent Balance Sheet. None
of the Sellers has any actual or potential liability for any Tax obligation of
any taxpayer (including without limitation the Stockholder or any affiliated
group of corporations or other entities that included any of the Sellers during
a prior period) other than the Sellers. All Taxes that the Sellers are or were
required by law to withhold or collect have been duly withheld or collected and,
to the extent required, have been paid to the proper Governmental Entity. For
purposes of this Agreement, "Taxes" means all taxes, charges, fees, levies or
other similar assessments or liabilities, including without limitation income,
gross receipts, ad valorem, premium, value-added, excise, real property,
personal property, sales, use, transfer, withholding, employment, payroll and
franchise taxes imposed by the United States of America or any state, local or
foreign government, or any agency
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thereof, or other political subdivision of the United States or any such
government, and any interest, fines, penalties, assessments or additions to tax
resulting from, attributable to or incurred in connection with any tax or any
contest or dispute thereof. For purposes of this Agreement, "Tax Returns" means
all reports, returns, declarations, statements or other information required to
be supplied to a taxing authority in connection with Taxes.
ii. The Sellers have delivered to the Buyer correct
and complete copies of all federal income Tax Returns, examination reports and
statements of deficiencies assessed against or agreed to by any of the Sellers
since January 1, 1990. The federal income Tax Returns of the Sellers have been
audited by the Internal Revenue Service or are closed by the applicable statute
of limitations for all taxable years through December 31, 1992. No examination
or audit of any Tax Returns of any of the Sellers by any Governmental Entity is
currently in progress or, to the knowledge of the Sellers or the Stockholder,
threatened or contemplated. None of the Sellers has waived any statute of
limitations with respect to taxes or agreed to an extension of time with respect
to a tax assessment or deficiency.
iii. None of the Sellers is a "consenting
corporation" within the meaning of Section 341(f) of the Code and none of the
assets of the Sellers are subject to an election under Section 341(f) of the
Code. None of the Sellers has been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code. None of the
Sellers is a party to any Tax allocation or sharing agreement.
iv. None of the Sellers is or has ever been a member
of an "affiliated group" of corporations (within the meaning of Section 1504 of
the Code), other than a group of which only the Sellers are members. None of the
Sellers has made an election under Treasury Reg. Section 1.1502-20(g). None of
the Sellers is or has been required to make a basis reduction pursuant to
Treasury Reg. Section 1.1502-20(b) or Treasury Reg. Section 1.337(d)-2T(b).
j. Assets. Each of the Sellers owns or leases all tangible
assets necessary for the conduct of its businesses as presently conducted and as
presently proposed to be conducted. Each such tangible asset is free from
material defects, has been maintained in accordance with normal industry
practice, is in good operating condition and repair (subject to normal wear and
tear) and is suitable for the purposes for which it presently is used. No asset
of any of the Sellers (tangible or intangible) is subject to any Security
Interest. A list of the Fixed Assets is attached hereto as Section 2(j) of the
Disclosure Schedule.
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k. Owned Real Property. Section 2(k) of the Disclosure
Schedule lists and describes briefly all real property that any of the Sellers
owns. With respect to each parcel of such real property:
i. the identified owner has good and clear record and
marketable title to such parcel, insurable by a recognized national title
insurance company at standard rates, free and clear of any Security Interest,
easement, covenant or other restriction, except for recorded easements,
covenants and other restrictions which do not impair the uses, occupancy or
value of such parcel in their current uses (the "Intended Uses");
ii. there are no (i) pending or, to the knowledge of
the Sellers, threatened condemnation proceedings relating to such parcel, (ii)
pending or, to the knowledge of the Sellers, threatened litigation or
administrative actions relating to such parcel, or (iii) other matters affecting
adversely the Intended Uses, occupancy or value thereof;
iii. the legal description for such parcel contained
in the deed thereof describes such parcel fully and adequately; the buildings
and improvements may be used as of right under applicable zoning and land use
laws for the Intended Uses, and such buildings and improvements are located
within the boundary lines of the described parcels of land, are not in violation
of current setback requirements, zoning laws and ordinances and do not encroach
on any easement which may burden the land; the land does not serve any adjoining
property for any purpose inconsistent with the Intended Uses; and such parcel is
not located within any flood plain or subject to any similar type restriction
for which any permits or licenses necessary to the use thereof have not been
obtained;
iv. there are no leases, subleases, licenses or
agreements, written or oral, granting to any party or parties (other than the
Sellers) the right of use or occupancy of any portion of such parcel;
v. there are no outstanding options or rights of
first refusal to purchase such parcel, or any portion thereof or interest
therein;
vi. all facilities located on such parcel are
supplied with utilities and other services necessary for the operation of such
facilities, including gas, electricity, water, telephone, sanitary sewer and
storm sewer, all of which services are adequate for the Intended Uses and in
accordance with all applicable laws, ordinances, rules and regulations and are
provided via public roads or via permanent, irrevocable, appurtenant easements
benefiting such parcel;
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vii. such parcel abuts on and has direct vehicular
access to a public road or access to a public road via a permanent, irrevocable,
appurtenant easement benefiting such parcel;
viii. the Sellers have not received notice of, and to
the best of the Sellers' knowledge, there is no proposed or pending proceeding
to change or redefine the zoning classification of all or any portion of the
parcels;
ix. the improvements constructed on the parcels are
in good condition and proper order, free of roof leaks, insect infestation, and
material construction defects, and all mechanical and utility systems servicing
such improvements are in good condition and proper working order, free of
material defects; and
x. each parcel is an independent unit which does not
rely on any facilities (other than the facilities of public utilities) located
on any other property (i) to fulfill any zoning, building code, or other
municipal or governmental requirement, (ii) for structural support or the
furnishing of any essential building systems or utilities, including, but not
limited to electric, plumbing, mechanical, heating, ventilating, and air
conditioning systems, or (iii) to fulfill the requirements of any lease. No
building or other improvement not included in the parcels relies on any part of
the parcels to fulfill any zoning, building code, or other municipal or
governmental requirement or for structural support or the furnishing of any
essential building systems or utilities. Each of the parcels is assessed by
local property assessors as a tax parcel or parcels separate from all other tax
parcels.
l. Intellectual Property. Each of the Sellers owns, or is
licensed or otherwise possesses legally enforceable rights to use, all patents,
trademarks, trade names, service marks, copyrights, and any applications for
such patents, trademarks, trade names, service marks and copyrights, schematics,
technology, know-how, computer software programs or applications and tangible or
intangible proprietary information or material (collectively, "Intellectual
Property") that are used to conduct its business as currently conducted or
planned to be conducted.
m. Inventory. All inventory of the Sellers whether or not
reflected on the Most Recent Balance Sheet, consists of a quality and quantity
usable and saleable in the Ordinary Course of Business, except for obsolete
items and items of below-standard quality, all of which have been written-off or
written-down to net realizable value on the Most Recent Balance Sheet. All
inventories not written-off have been priced at the lower of cost or market on a
last-in, firstout basis.
n. Real Property Leases. Section 2(n) of the Disclosure
Schedule lists and describes briefly all real property leased or subleased to
any of the Sellers. The Sellers have delivered to the Buyer correct and complete
copies of the leases and
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subleases (as amended to date) listed in Section 2(n) of the Disclosure
Schedule. With respect to each lease and sublease listed in Section 2(n) of the
Disclosure Schedule:
i. the lease or sublease is legal, valid, binding,
enforceable and in frill force and effect;
ii. the lease or sublease will continue to be legal,
valid, binding, enforceable and in full force and effect immediately following
the Closing in accordance with the terms thereof as in effect prior to the
Closing;
iii. no party to the lease or sublease is in breach
or default, and no event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination, modification, or
acceleration thereunder;
iv. there are no disputes, oral agreements or
forbearance programs in effect as to the lease or sublease;
v. none of the Sellers has assigned, transferred,
conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold
or subleasehold;
vi. all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the operation of said
facilities;
vii. to the knowledge of the Sellers, the owner of
the facility leased or subleased has good and clear record and marketable title
to the parcel of real property, free and clear of any Security Interest,
easement, covenant or other restriction, except for recorded easements,
covenants, and other restrictions which do not impair the Intended Uses,
occupancy or value of the property subject thereto; and
viii. the Sellers have obtained non-disturbance
agreements from the holder of each superior Security Interest and ground lease
in connection with each such lease or sublease (each of which is listed in
Section 2(n) of the Disclosure Schedule); and the representations and warranties
set forth in clauses (i) through (iv) of this Section 2(n) with respect to
leases and subleases are true and correct with respect to such nondisturbance
agreements.
o. Contracts. Section 2(o) of the Disclosure Schedule lists
the following written arrangements (including without limitation written
agreements) to which any of the Sellers is a party:
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i. any written arrangement (or group of related
written arrangements) for the lease of personal property from or to third
parties providing for lease payments in excess of $1,000 per annum;
ii. any written arrangement (or group of related
written arrangements) for the purchase or sale of raw materials, commodities,
supplies, products or other personal property or for the furnishing or receipt
of services (i) which calls for performance over a period of more than one year,
(ii) which involves more than the sum of $25,000, or (iii) in which any of the
Sellers has granted exclusive rights relating to any products, services or
territory or has agreed to purchase a minimum quantity of goods or services or
has agreed to purchase goods or services exclusively from a certain party;
iii. any written arrangement establishing a
partnership or joint venture;
iv. any written arrangement (or group of related
written arrangements) under which it has created, incurred, assumed, or
guaranteed (or may create, incur, assume, or guarantee) indebtedness (including
capitalized lease obligations) or under which it has imposed (or may impose) a
Security Interest on any of its assets, tangible or intangible;
v. any written arrangement concerning confidentiality
or noncompetition;
vi. any written arrangement between any of the
Sellers and the Stockholder or any of his relatives or affiliates;
vii. any written arrangement under which the
consequences of a default or termination could have a material adverse effect on
the assets, business, financial condition, results of operations or future
prospects of any of the Sellers; and
viii. any other written arrangement (or group of
related written arrangements) either involving more than $25,000 or not entered
into in the Ordinary Course of Business.
The Sellers have delivered to the Buyer a correct and complete copy of each
written arrangement (as amended to date) listed in Section 2(o) of the
Disclosure Schedule. With respect to each written arrangement so listed: (i) the
written arrangement is legal, valid, binding and enforceable and in full force
and effect; (ii) the written arrangement will continue to be legal, valid,
binding and enforceable and in full force and effect immediately following the
Closing in accordance with the terms thereof as in effect prior to the Closing;
and (iii) no party is in breach or default, and no event has occurred which with
notice or lapse of time would constitute a breach or default
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or permit termination, modification, or acceleration, under the written
arrangement. None of the Sellers is a party to any oral contract, agreement or
other arrangement which, if reduced to written form, would be required to be
listed in Section 2(o) of the Disclosure Schedule under the terms of this
Section 2(o).
p. Accounts Receivable. All accounts receivable of the Sellers
reflected on the Most Recent Balance Sheet are valid receivables subject to no
setoffs or counterclaims and are current and collectible to the best of the
Sellers' knowledge, net of the applicable reserve for bad debts on the Most
Recent Balance Sheet. All accounts receivable reflected in the financial or
accounting records of the Sellers that have arisen since the Most Recent Fiscal
Period End are valid receivables subject to no setoffs or counterclaims and are
collectible, net of a reserve for bad debts in an amount proportionate to the
reserve shown on the Most Recent Balance Sheet.
q. Powers of Attorney; Bank Accounts. There are no outstanding
powers of attorney executed on behalf of any of the Sellers. A list of the bank
accounts of the Sellers is set forth on Section 2(q) of the Disclosure Schedule.
r. Insurance. Section 2(r) of the Disclosure Schedule sets
forth the following information with respect to each insurance policy (including
fire, theft, casualty, general liability, workers compensation, business
interruption, environmental, product liability and automobile insurance policies
and bond and surety arrangements) to which the Sellers have been a party, a
named insured, or otherwise the beneficiary of coverage at any time within the
past five years:
i. the name of the insurer, the name of the
policyholder and the name of each covered insured;
ii. the policy number and the period of coverage;
iii. the scope (including an indication of whether
the coverage was on a claims made, occurrence, or other basis) and amount
(including a description of how deductibles and ceilings are calculated and
operate) of coverage; and
iv. a description of any retroactive premium
adjustments or other loss-sharing arrangements.
(i) Each such insurance policy is enforceable and in full force and effect; (ii)
such policy will continue to be enforceable and in full force and effect
immediately following the Closing in accordance with the terms thereof as in
effect prior to the Closing; (iii) none of the Sellers is in breach or default
(including with respect to the payment of premiums or the giving of notices)
under such policy, and no event has occurred which, with notice or the lapse of
time, would constitute such a breach or
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default or permit termination, modification or acceleration, under such policy;
and (iv) none of the Sellers has received any notice from the insurer
disclaiming coverage or reserving rights with respect to a particular claim or
such policy in general. None of the Sellers has incurred any loss, damage,
expense or liability covered by any such insurance policy for which it has not
properly asserted a claim under such policy. Each of the Sellers is covered by
insurance in scope and amount customary and reasonable for the businesses in
which it is engaged.
s. Litigation. Section 2(s) of the Disclosure Schedule
identifies, and contains a brief description of, (a) any unsatisfied judgment,
order, decree, stipulation or injunction and (b) any claim, complaint, action,
suit, proceeding, hearing or investigation of or in any Governmental Entity or
before any arbitrator to which any of the Sellers is a party or, to the
knowledge of the Sellers is threatened to be made a party. None of the
complaints, actions, suits, proceedings, hearings, and investigations set forth
in Section 2(s) of the Disclosure Schedule could have a material adverse effect
on the assets, business, financial condition, results of operations or future
prospects of any of the Sellers.
t. Employees. Section 2(t) of the Disclosure Schedule contains
a list of all employees of the Sellers, along with the position and the annual
rate of compensation of each such person. To the knowledge of the Sellers, no
key employee or group of employees has any plans to terminate employment with
the Sellers. None of the Sellers is a party to or bound by any collective
bargaining agreement, nor has any of them experienced any strikes, grievances,
claims of unfair labor practices or other collective bargaining disputes. The
Sellers have no knowledge of any organizational effort made or threatened,
either currently or within the past two years, by or on behalf of any labor
union with respect to employees of any of the Sellers.
u. Employee Benefits.
i. Section 2(u) of the Disclosure Schedule contains a
complete and accurate list of all Employee Benefit Plans (as defined below)
maintained, or contributed to, by any of the Sellers, or any ERISA Affiliate (as
defined below). For purposes of this Agreement, "Employee Benefit Plan" means
any "employee pension benefit plan" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), any "employee
welfare benefit plan" (as defined in Section 3(1) of ERISA), and any other
written or oral plan, agreement or arrangement involving direct or indirect
compensation, including without limitation insurance coverage, severance
benefits, disability benefits, deferred compensation, bonuses, stock options,
stock purchase, phantom stock, stock appreciation or other forms of incentive
compensation or post-retirement compensation. For purposes of this Agreement,
"ERISA Affiliate" means any entity which is a member of (i) a controlled group
of corporations (as defined in Section 414(b) of the Code), (ii) a
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group of trades or businesses under common control (as defined in Section 414(c)
of the Code), or (iii) an affiliated service group (as defined under Section
414(m) of the Code or the regulations under Section 414(o) of the Code), any of
which includes any of the Sellers. Complete and accurate copies of (i) all
Employee Benefit Plans which have been reduced to writing, (ii) written
summaries of all unwritten Employee Benefit Plans, (iii) all related trust
agreements, insurance contracts and summary plan descriptions, and (iv) all
annual reports filed on IRS Form 5500, 5500C or 5500R for the last five plan
years for each Employee Benefit Plan, have been delivered to the Buyer. Each
Employee Benefit Plan has been administered in all material respects in
accordance with its terms and each of the Sellers, and the ERISA Affiliates has
in all material respects met its obligations with respect to such Employee
Benefit Plan and has made all required contributions thereto. The Sellers and
all Employee Benefit Plans are in compliance in all material respects with the
currently applicable provisions of ERISA and the Code and the regulations
thereunder.
ii. There are no investigations by any Governmental
Entity, termination proceedings or other claims (except claims for benefits
payable in the normal operation of the Employee Benefit Plans and proceedings
with respect to qualified domestic relations orders) suits or proceedings
against or involving any Employee Benefit Plan or asserting any rights or claims
to benefits under any Employee Benefit Plan that could give rise to any material
liability.
iii. All the Employee Benefit Plans that are intended
to be qualified under Section 401(a) of the Code have received determination
letters from the Internal Revenue Service to the effect that such Employee
Benefit Plans are qualified and the plans and the trusts related thereto are
exempt from federal income taxes under Sections 401(a) and 501(a), respectively,
of the Code, no such determination letter has been revoked and revocation has
not been threatened, and no such Employee Benefit Plan has been amended since
the date of its most recent determination letter or application therefor in any
respect, and no act or omission has occurred, that would adversely affect its
qualification or materially increase its cost.
iv. Neither any of the Sellers, nor any ERISA
Affiliate has ever maintained an Employee Benefit Plan subject to Section 412 of
the Code or Title IV of ERISA.
v. At no time has any of the Sellers, or any ERISA
Affiliate been obligated to contribute to any "multi-employer plan" (as defined
in Section 4001(a)(3) of ERISA).
vi. There are no unfunded obligations under any
Employee Benefit Plan providing benefits after termination of employment to any
employee of any of the Sellers (or to any beneficiary of any such employee),
including but not limited to retiree health coverage and deferred compensation,
but excluding
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continuation of health coverage required to be continued under Section 4980B of
the Code and insurance conversion privileges under state law.
vii. No act or omission has occurred and no condition
exists with respect to any Employee Benefit Plan maintained by any of the
Sellers, or any ERISA Affiliate that would subject the Sellers, or any ERISA
Affiliate to any material fine, penalty, tax or liability of any kind imposed
under ERISA or the Code.
viii. No Employee Benefit Plan is funded by,
associated with, or related to a "voluntary employee's beneficiary association"
within the meaning of Section 501(c)(9) of the Code.
ix. No Employee Benefit Plan, plan documentation or
agreement, summary plan description or other written communication distributed
generally to employees by its terms prohibits any of the Sellers from amending
or terminating any such Employee Benefit Plan.
x. Section 2(u) of the Disclosure Schedule discloses
each: (i) agreement with any director, executive officer or other key employee
of any of the Sellers (A) the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction involving
such Seller of the nature of any of the transactions contemplated by this
Agreement, (B) providing any term of employment or compensation guarantee or (C)
providing severance benefits or other benefits after the termination of
employment of such director, executive officer or key employee; (ii) agreement,
plan or arrangement under which any person may receive payments from such Seller
that may be subject to the tax imposed by Section 4999 of the Code or included
in the determination of such person's "parachute payment" under Section 280G of
the Code; and (iii) agreement or plan binding such Seller, including without
limitation any stock option plan, stock appreciation right plan, restricted
stock plan, stock purchase plan, severance benefit plan, or any Employee Benefit
Plan, any of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the benefits
of which will be calculated on the basis of any of the transactions contemplated
by this Agreement.
v. Environmental Matters.
i. The Sellers have complied with all applicable
Environmental Laws (as defined below). There is no pending or, to the knowledge
of the Sellers, threatened civil or criminal litigation, written notice of
violation, formal administrative proceeding, or investigation, inquiry or
information request by any Governmental Entity, relating to any Environmental
Law involving any of the Sellers. For purposes of this Agreement, "Environmental
Law" means any federal, state or local law, statute, rule or regulation or the
common law relating to the environment
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or occupational health and safety, including without limitation any statute,
regulation or order pertaining to (i) treatment, storage, disposal, generation
and transportation of industrial, toxic or hazardous substances or solid or
hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and soil
contamination; (iv) the release or threatened release into the environment of
industrial, toxic or hazardous substances, or solid or hazardous waste,
including without limitation emissions, discharges, injections, spills, escapes
or dumping of pollutants, contaminants or chemicals; (v) the protection of wild
life, marine sanctuaries and wetlands, including without limitation all
endangered and threatened species; (vi) storage tanks, vessels and containers;
(vii) underground and other storage tanks or vessels, abandoned, disposed or
discarded barrels, containers and other closed receptacles; (viii) health and
safety of employees and other persons; and (ix) manufacture, processing, use,
distribution, treatment, storage, disposal, transportation or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or oil or petroleum products or solid or hazardous waste. As used above, the
terms "release" and "environment" shall have the meaning set forth in the
federal Comprehensive Environmental Compensation, Liability and Response Act of
1980 ("CERCLA").
ii. There have been no releases of any Materials of
Environmental Concern (as defined below) into the environment at any parcel of
real property or any facility formerly or currently owned, operated or
controlled by any of the Sellers. With respect to any such releases of Materials
of Environmental Concern, the Sellers have given all required notices to
Governmental Entities (copies of which have been provided to the Buyer). None of
the Sellers is aware of any releases of Materials of Environmental Concern at
parcels of real property or facilities other than those owned, operated or
controlled by any of the Sellers that could reasonably be expected to have an
impact on the real property or facilities owned, operated or controlled by the
Sellers. For purposes of this Agreement, "Materials of Environmental Concern"
means any chemicals, pollutants or contaminants, hazardous substances (as such
term is defined under CERCLA), solid wastes and hazardous wastes (as such terms
are defined under the federal Resources Conservation and Recovery Act), toxic
materials, oil or petroleum and petroleum products, or any other material
subject to regulation under any Environmental Law.
iii. Set forth in Section 2(v) of the Disclosure
Schedule is a list of all environmental reports, investigations and audits
relating to premises currently or previously owned or operated by any of the
Sellers (whether conducted by or on behalf of Sellers or a third party, and
whether done at the initiative of the Sellers or directed by a Governmental
Entity or other third party) which any of the Sellers has possession of or
access to. Complete and accurate copies of each such report, or the results of
each such investigation or audit, have been provided to the Buyer.
iv. Set forth in Section 2(v) of the Disclosure
Schedule is a list of all of the solid and hazardous waste transporters and
treatment, storage and
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disposal facilities that have been utilized by any of the Sellers. The Sellers
are not aware of any material environmental liability of any such transporter or
facility.
w. Legal Compliance. Each of the Sellers, and the conduct and
operations of their respective businesses, are in compliance with each law
(including rules and regulations thereunder) of any federal, state, local or
foreign government, or any Governmental Entity, which (a) affects or relates to
this Agreement or the transactions contemplated hereby or (b) is applicable to
such Seller or business, except for any violation of or default under a law
referred to in clause (b) above which reasonably may be expected not to have a
material adverse effect on the assets, business, financial condition, results of
operations or future prospects of any of the Sellers.
x. Permits. Section 2(x) of the Disclosure Schedule sets forth
a list of all permits, licenses, registrations, certificates, orders or
approvals from any Governmental Entity (including without limitation those
issued or required under Environmental Laws and those relating to the occupancy
or use of owned or leased real property) ("Permits") issued to or held by any of
the Sellers. Such listed Permits are the only Permits that are required for the
Sellers to conduct their respective businesses as presently conducted or as
proposed to be conducted, except for those the absence of which would not have
any material adverse effect on the assets, business, financial condition,
results of operations or future prospects of the Sellers. Each such Permit is in
full force and effect and, to the best of the knowledge of the Sellers, no
suspension or cancellation of such Permit is threatened and there is no basis
for believing that such Permit will not be renewed upon expiration. Each such
Permit will continue in full force and effect following the Closing.
y. Certain Business Relationships With Affiliates. Except as
set forth in Section 2(y) of the Disclosure Schedule, no affiliate of any of the
Sellers (a) owns any property or right, tangible or intangible, which is used in
the business of any of the Sellers, (b) has any claim or cause of action against
any of the Sellers, or (c) owes any money to any of the Sellers. Section 2(y) of
the Disclosure Schedule describes any transactions or relationships between any
of the Sellers and any affiliate thereof.
z. Brokers' Fees. None of the Sellers has any liability or
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.
aa. Books and Records. The minute books and other similar
records of each of the Sellers contain true and complete records of all actions
taken at any meetings of such Seller's stockholders, Board of Directors or any
committee thereof and of all written consents executed in lieu of the holding of
any such meeting. The books and records of each Seller accurately reflect in all
material respects the assets,
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liabilities, business, financial condition and results of operations of such
Seller and have been maintained in accordance with good business and bookkeeping
practices.
bb. Customers and Suppliers. No unfilled customer order or
commitment obligating any Seller to deliver products or perform services will
result in a loss to any Seller upon completion of performance. No purchase order
or commitment of any Seller is in excess of normal requirements, nor are prices
provided therein in excess of current market prices for the products or services
to be provided thereunder.
cc. Disclosure. No representation or warranty by the
Stockholder or any of the Sellers contained in this Agreement, and no statement
contained in the Disclosure Schedule or any other document, certificate or other
instrument delivered to or to be delivered by or on behalf of the Stockholder or
the Sellers pursuant to this Agreement, and no other statement made by the
Stockholder or any of the Sellers or any of their representatives in connection
with this Agreement, contains or will contain any untrue statement of a material
fact or omits or will omit to state any material fact necessary, in light of the
circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading. The Stockholder and the Sellers
have disclosed to the Buyer all material information relating to the Assets and
the business of the Sellers or the transactions contemplated by this Agreement.
dd. Investment Representations. The Stockholder is acquiring
the Shares for his own account for investment only, and not with a view to, or
for sale in connection with, any distribution of the Shares in violation of the
Securities Act of 1933 (the "Securities Act"), or any rule or regulation under
the Securities Act. The Stockholder has had such opportunity as he has deemed
adequate to obtain from representatives of the Buyer such information as is
necessary to permit him to evaluate the merits and risks of his investment in
the Buyer. The Stockholder has sufficient experience in business, financial and
investment matters to be able to evaluate the risks involved in the acquisition
of the Shares and to make an informed investment decision with respect to such
acquisition.
ee. Limitations on Resale. The Stockholder understands that
(i) the Shares have not been registered under the Securities Act and are
"restricted securities" within the meaning of Rule 144 under the Securities Act,
(ii) such shares cannot be sold, transferred or otherwise disposed of unless
they are subsequently registered under the Securities Act or an exemption from
registration is then available; (iii) in any event, the exemption from
registration under Rule 144 or otherwise may not be available for at least two
years and even then will not be available unless a public market then exists for
the CWS Common Stock, adequate information concerning the Buyer is then
available to the public, and other terms and conditions of Rule 144 are complied
with; and (iv) there is now no registration
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statement on file with the Securities and Exchange Commission with respect to
any stock of the Buyer and the Buyer has no obligation or current intention to
register any shares under the Securities Act.
ff. Legends. The Stockholder understands that a legend
substantially in the following form will be placed on the certificate
representing the Shares:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be sold, transferred or otherwise disposed of in the
absence of an effective registration statement under such Act
or an opinion of counsel satisfactory to the corporation to
the effect that such registration is not required."
In addition, the Stockholder understands that a legend substantially in
the following form will be placed on a certificate representing not less than
30,210 shares:
"The shares represented by this certificate are subject to a
certain Reorganization Agreement dated as of January ___,
1997, including, without limitation, Section 1(e) thereof."
3. Representations and Warranties of the Buyer. Each of the New York
Buyer and the Pennsylvania Buyer represents and warrants to the Stockholder and
the Sellers as follows:
a. Organization. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation.
b. Capitalization. The authorized, issued and outstanding
capital stock of the Buyer and of CWS is as set forth on Schedule 3(b) attached
hereto. All of the Shares will be, when issued in accordance with this
Agreement, duly authorized, validly issued, fully paid, nonassessable and free
of all preemptive rights.
c. Authorization of Transaction. The Buyer has all requisite
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder and thereunder. The execution and delivery of this
Agreement by the Buyer and the performance of this Agreement and the
consummation of the transactions contemplated hereby by the Buyer have been duly
and validly authorized by all necessary corporate action on the part of the
Buyer. This Agreement has been duly and validly executed and delivered by the
Buyer and constitutes a valid and binding obligation of the Buyer enforceable
against it in accordance with its terms.
-24-
d. Noncontravention. Neither the execution and delivery of
this Agreement by the Buyer, nor the consummation by the Buyer of the
transactions contemplated hereby or thereby, will (a) conflict with or violate
any provision of the charter or Bylaws of the Buyer, (b) require on the part of
the Buyer any filing with, or permit, authorization, consent or approval of, any
Governmental Entity, (c) conflict with, result in breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in the
acceleration of, create in any party any right to accelerate, terminate, modify
or cancel, or require any notice, consent or waiver under, any contract, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, Security Interest or
other arrangement to which the Buyer is a party or by which it is bound or to
which its assets are subject, or (d) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Buyer or any of its
properties or assets.
e. Financial Statements. The audited consolidated financial
statements of CWS for the three years ending April 30, 1996, and unaudited
financial statements for the six months ended October 31, 1996 (i) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby (except as may be indicated therein or in the notes
thereto), (ii) fairly present the consolidated financial condition, results of
operations and cash flows of CWS as of the respective dates thereof and for the
periods referred to therein, and (iii) are consistent with the books and records
of CWS.
f. Absence of Material Adverse Changes. Since October 31,
1996, there has not been any material adverse change in the assets, business,
financial condition or results of operations of CWS, nor has there occurred any
event or development which could reasonably be foreseen to result in such a
material adverse change in the future.
g. Brokers' Fees. The Buyer has no liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
h. Disclosure. No representation or warranty by the Buyer
contained in this Agreement, and no statement contained in any document,
certificate or other instrument delivered to or to be delivered by or on behalf
of the Buyer pursuant to this Agreement, contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary, in light of the circumstances under which it was or will be made, in
order to make the statements herein or therein not misleading.
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4. Covenants.
a. Best Efforts. Each of the Parties shall use its best
efforts, to the extent commercially reasonable, to take all actions and to do
all things necessary, proper or advisable to consummate the transactions
contemplated by this Agreement.
b. Notices and Consents. The Stockholder and the Sellers shall
use their best efforts to obtain, at the Sellers' expense, all such waivers,
permits, consents, approvals or other authorizations from third parties and
Governmental Entities, and to effect all such registrations, filings and notices
with or to third parties and Governmental Entities, as may be required by or
with respect to the Sellers in connection with the transactions contemplated by
this Agreement (including without limitation those listed in Section 2(d) or
Section 2(x) of the Disclosure Schedule).
c. Operation of Business. Except as contemplated by this
Agreement, during the period from the date of this Agreement to the Closing
Date, each of the Sellers shall conduct its operations in the Ordinary Course of
Business and in compliance with all applicable laws and regulations and, to the
extent consistent therewith, use all reasonable efforts to preserve intact its
current business organization, keep its physical assets in good working
condition, keep available the services of its current officers and employees and
preserve its relationships with customers, suppliers and others having business
dealings with it to the end that its goodwill and ongoing business shall not be
impaired in any material respect.
d. Full Access. The Stockholder and the Sellers shall permit
representatives of the Buyer to have full access (at all reasonable times, and
in a manner so as not to interfere with the normal business operations of the
Sellers) to all premises, properties, financial and accounting records,
contracts, other records and documents, and personnel, of or pertaining to the
Sellers. The Buyer (a) shall treat and hold as confidential any Confidential
Information (as defined below), (b) shall not use any of the Confidential
Information except in connection with this Agreement, and (c) if this Agreement
is terminated for any reason whatsoever, shall return to the Sellers all
tangible embodiments (and all copies) thereof which are in its possession. For
purposes of this Agreement, "Confidential Information" means any confidential or
proprietary information of the Sellers that is furnished in writing to the Buyer
by any Seller in connection with this Agreement and is labelled confidential or
proprietary; provided, however, that it shall not include any information (i)
which, at the time of disclosure, is available publicly, (ii) which, after
disclosure, becomes available publicly through no fault of the Buyer, or (iii)
which the Buyer knew or to which the Buyer had access prior to disclosure.
e. Notice of Breaches. The Stockholder and the Sellers shall
promptly deliver to the Buyer written notice of any event or development that
would (a) render any statement, representation or warranty of the Stockholder or
any Seller
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in this Agreement (including the Disclosure Schedule) inaccurate or incomplete
in any material respect, or (b) constitute or result in a breach by the
Stockholder or any Seller of, or a failure by the Stockholder or any Seller to
comply with, any agreement or covenant in this Agreement applicable to such
party. The Buyer shall promptly deliver to the Stockholder and the Sellers
written notice of any event or development that would (i) render any statement,
representation or warranty of the Buyer in this Agreement inaccurate or
incomplete in any material respect, or (ii) constitute or result in a breach by
the Buyer of, or a failure by the Buyer to comply with, any agreement or
covenant in this Agreement applicable to the Buyer. No such disclosure shall be
deemed to avoid or cure any such misrepresentation or breach.
f. Exclusivity. The Stockholder and the Sellers shall not, and
the Sellers shall use their best efforts to cause each of their other officers,
directors, employees, representatives and agents not to, directly or indirectly,
(a) encourage, solicit, initiate, engage or participate in discussions or
negotiations with any person or entity (other than the Buyer) concerning any
merger, consolidation, sale of material assets, tender offer, recapitalization,
purchase of shares, proxy solicitation or other business combination involving
any Seller, or any division of any Seller or (b) provide any non-public
information concerning the business, properties or assets of any Seller to any
person or entity (other than the Buyer). The Sellers shall immediately notify
the Buyer of, and shall disclose to the Buyer all details of, any inquiries,
discussions or negotiations of the nature described in the first sentence of
this Section 4(f).
5. Conditions to Consummation of Asset Purchase.
a. Conditions to Each Party's Obligations. The respective
obligations of the Sellers and the Buyer to consummate the transactions
contemplated by this Agreement to occur at the Closing are subject to the
condition that no action, suit or proceeding shall be pending or threatened by
or before any Governmental Entity wherein an unfavorable judgment, order,
decree, stipulation or injunction would (i) prevent consummation of any of the
transactions contemplated by this Agreement, (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation or (iii)
affect adversely the right of the Buyer to own, operate or control the Assets
following the Closing, and no such judgment, order, decree, stipulation or
injunction shall be in effect.
b. Conditions to Obligations of the Buyer. The obligation of
the Buyer to consummate the transactions contemplated by this Agreement to occur
at the Closing is subject to the satisfaction of the following additional
conditions:
i. the Sellers shall have obtained all of the
waivers, permits, consents, approvals or other authorizations, and effected all
of the registrations, filings and notices, referred to in Section 4(b);
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ii. the representations and warranties of the
Stockholder and the Sellers set forth in Section 2 shall be true and correct
when made on the date hereof and shall be true and correct as of the Closing as
if made as of such Closing, except for representations and warranties made as of
a specific date, which shall be true and correct as of such date;
iii. the Sellers shall have performed or complied
with their agreements and covenants required to be performed or complied with
under this Agreement as of or prior to the Closing;
iv. the Sellers shall have delivered to the Buyer a
certificate (without qualification as to knowledge or materiality or otherwise)
to the effect that the conditions specified in Section 5(a) and clauses (i)
through (iii) of this Section 5(b) are satisfied in all respects;
v. the Buyer shall have received from counsel to the
Sellers an opinion with respect to the matters set forth in Exhibit C attached
hereto, addressed to the Buyer and dated as of the Closing Date;
vi. all actions to be taken by the Sellers in
connection with the consummation of the transactions contemplated hereby and all
certificates, opinions, instruments and other documents required to effect the
transactions contemplated hereby shall be reasonably satisfactory in form and
substance to the Buyer;
vii. the Buyer shall have received at or prior to the
Closing such documents, instruments or certificates as the Buyer may reasonably
request including, without limitation:
a. a bill of sale substantially in the form
of Exhibit E;
b. such instruments of conveyance,
assignment and transfer, in form and substance satisfactory to the Buyer, as
shall be appropriate to convey, transfer and assign to, and to vest in, the
Buyer, good, clear, record and marketable title to the Assets other than the
Real Property (including all necessary bills of sale and certificates of title
for motor vehicles owned by the Sellers);
c. such warranty deeds and instruments of
conveyance, assignment and transfer, in form and substance satisfactory to the
Buyer, as shall be appropriate to convey, transfer and assign to, and to vest
in, the Buyer, good, clear, record, marketable and insurable title to the Real
Property;
d. all literature and other documentation
relating to the Sellers' business, all in form and substance satisfactory to the
Buyer;
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e. such contracts, files and other data and
documents pertaining to the Assets or the Sellers' business as the Buyer may
reasonably request;
f. an agreement by the Stockholder to become
subject to the CWS 1995 Stockholders Agreement;
g. such certificates of the Sellers'
officers and such other documents evidencing satisfaction of the conditions
specified in Section 5(b) as the Buyer shall reasonably request;
h. certificates of the Secretaries of State
of the State of New York and the Commonwealth of Pennsylvania as to the legal
existence and good standing (including tax) of the Sellers in their respective
states of incorporation;
i. certificates of the Secretary of the
Seller attesting to the incumbency of the Sellers' officers, the authenticity of
the resolutions authorizing the transactions contemplated by the Agreement, and
the authenticity and continuing validity of the charter documents delivered
pursuant to Section 2;
j. estoppel certificates from each lessor
from whom any of the Sellers lease real or personal property consenting to the
assumption of such lease by the Buyer and representing that there are no
outstanding claims against such Seller under any such lease;
k. estoppel certificates from each tenant to
whom any Seller leases real property consenting to the assumption of such lease
by the Buyer and representing that there are no outstanding claims against such
Seller under any such lease;
l. a title policy or policies (together, the
"Title Policy") from one or more title companies reasonably acceptable to the
Buyer (the "Title Insurer"), in form and substance reasonably satisfactory to
the Buyer covering the Real Property on which any transfer station is located;
m. such affidavits and indemnities executed
by the Sellers and the Stockholder as the Title Insurer may reasonably require
in order to omit from the Title Policy all exceptions for (i) judgments,
bankruptcies or other returns against persons or entities whose names are the
same as or similar to such Seller; (ii) parties in possession other than under
rights to possession granted under the Leases; (iii) mechanics' liens; and (iv)
hazardous waste (if applicable). It shall be the obligation of the Sellers to
obtain the title Policy and the cost of the title Policy shall be borne by the
Sellers;
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n. a cross receipt executed by the Buyer and
the Sellers;
o. such other documents, instruments or
certificates as the Buyer may reasonably request.
c. Conditions to Obligations of the Sellers. The obligation of
the Sellers to consummate the transactions contemplated by this Agreement to
occur at the Closing is subject to the satisfaction of the following additional
conditions:
i. the representations and warranties of the Buyer
set forth in Section 3 shall be true and correct when made on the date hereof
and shall be true and correct as of the respective Effective Time as if made as
of the respective Effective Time, except for representations and warranties made
as of a specific date, which shall be true and correct as of such date;
ii. the Buyer shall have performed or complied with
its agreements and covenants required to be performed or complied with under
this Agreement as of or prior to the respective Effective Time;
iii. the Buyer shall have delivered to the Sellers a
certificate (without qualification as to knowledge or materiality or otherwise)
to the effect that each of the conditions specified in clauses (i) and (ii) of
this Section 5(c) is satisfied in all respects;
iv. the Stockholder shall have been elected a member
of the Board of Directors of CWS;
v. the Sellers shall have received from New York
counsel to the Buyer an opinion with respect to the matters set forth in Exhibit
D attached hereto, addressed to the Sellers and dated as of the Closing Date;
vi. all actions to be taken by the Buyer in
connection with the consummation of the transactions contemplated hereby and all
certificates, opinions, instruments and other documents required to effect the
transactions contemplated hereby shall be reasonably satisfactory in form and
substance to the Sellers; and
vii. The Sellers shall have received at or prior to
the Closing such documents, instruments or certificates as the Sellers may
reasonably request including, without limitation:
a. such certificates of the Buyer's officers
and such other documents evidencing satisfaction of the conditions specified in
this Section 5(c) as the Sellers shall reasonably request;
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b. a certificate of the Secretary of State
of the State of New York as to the legal existence and good standing of the New
York Buyer in New York, and a certificate of the Secretary of State of the
Commonwealth of Pennsylvania as to the legal existence and good standing of the
Pennsylvania Buyer in Pennsylvania;
c. a certificate of the Secretary of the
Buyer attesting to the incumbency of the Buyer's officers, the authenticity of
the resolutions authorizing the transactions contemplated by this Agreement, and
the authenticity and continuing validity of the charter documents and by-laws;
d. delivery of the Initial Shares to the
Sellers;
e. the Instrument of Assumption executed by
the Buyer and accepted by the Sellers; and
f. a cross receipt executed by the Buyer and
the Sellers.
6. Indemnification.
a. Indemnification. The Stockholder and the Sellers, jointly
and severally, shall indemnify the Buyer and its officers, directors,
stockholders and affiliates (and the officers, directors and stockholders of its
affiliates) (the "Indemnified Parties") and hold the Indemnified Parties
harmless against, any and all debts, obligations and other liabilities (whether
absolute, accrued, contingent, fixed or otherwise, or whether known or unknown,
or due or to become due or otherwise), monetary damages, fines, fees, penalties,
interest obligations, deficiencies, losses and expenses (including without
limitation amounts paid in settlement, interest, court costs, costs of
investigators, fees and expenses of attorneys, accountants, financial advisors
and other experts, and other expenses of litigation) incurred or suffered by the
Indemnified Parties ("Damages"):
i. resulting from, relating to or constituting any
misrepresentation, breach of warranty or failure to perform any covenant or
agreement of the Stockholder or the Sellers contained in this Agreement or in
any document delivered by the Stockholder or the Sellers pursuant to this
Agreement or in connection with the transactions contemplated by this Agreement;
ii. resulting from any claims against, or liabilities
or obligations of, the Sellers or against the Assets not specifically assumed by
the Buyer pursuant to this Agreement;
-31-
iii. resulting from any tax liabilities or
obligations of any of the Sellers;
iv. resulting from any violation by any of the
Sellers of, or any failure by any of the Sellers to comply with, any law,
ruling, order, decree, regulation or zoning, environmental or permit requirement
applicable to any of the Sellers or their business or properties, whether or not
any such failure or violation has been disclosed to the Buyer, including any
costs incurred by the Buyer (A) in order to bring the Assets into compliance
with environmental laws as a result of noncompliance with such laws on or before
the Closing Date or (B) in connection with the transfer of the Assets;
v. resulting from the failure of the Buyer or the
Sellers to obtain the protections afforded by compliance with the notification
and other requirements of the bulk sales laws in force in the jurisdictions in
which such laws may be applicable to either the Sellers or the transactions
contemplated by this Agreement;
vi. resulting from any claims against, or liabilities
or obligations of, the Sellers with respect to obligations under Employee Plans
not specifically assumed by the Buyer pursuant to this Agreement;
vii. resulting from any claims against the Sellers or
the Assets by or on behalf of Allied Waste Industries, Inc.;
viii. resulting from any claims against the Sellers,
the Stockholder or the Assets by or on behalf of Robert Seymour; and
ix. resulting from any and all claims relating to or
arising out of the Covert Landfill, including any claim for civil and/or
criminal fine or penalty, which may be asserted in any form, including any
administrative proceeding or court proceeding, by the Organized Crime Task
Force, the Department of Environmental Conservation, or any other federal, state
or local governmental entity.
b. Method of Asserting Claims.
i. The Buyer agrees to look to the Retained Shares to
satisfy any claims for indemnification hereunder, until such Retained Shares
have been fully applied, and the Buyer shall have the right to offset against
its obligation to issue the Retained Shares pursuant to the terms of this
Agreement the amount of any such claim for indemnification. Thereafter, the
Stockholder and the Sellers shall be liable for any additional claims (provided,
however, that the Stockholder and the Sellers may satisfy such obligation by
surrendering Initial Shares). For purposes of
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satisfying the Stockholder's and Sellers' indemnification obligations under this
Section 6, the Retained Shares and the Initial Shares will be valued at $20 per
share.
ii. If a third party asserts that an Indemnified
Party is liable to such third party for a monetary or other obligation which may
constitute or result in Damages for which the Indemnified Party may be entitled
to indemnification pursuant to this Section 6, and the Indemnified Party
reasonably determines that it has a valid business reason to fulfill such
obligation, then (i) the Indemnified Party shall be entitled to satisfy such
obligation, without prior notice to or consent from the Stockholder or the
Sellers, (ii) the Indemnified Party may make a claim for indemnification
pursuant to this Section 6, and (iii) the Indemnified Party shall be reimbursed
for any such Damages for which it is entitled to indemnification pursuant to
this Section 6 (subject to the right of the Stockholder and the Sellers to
dispute the Indemnified Party's entitlement to indemnification under the terms
of this Section 6).
iii. The Buyer shall give prompt written notification
to the Stockholder of the commencement of any action, suit or proceeding
relating to a third party claim for which indemnification pursuant to this
Section 6 may be sought; provided, however, that no delay on the part of the
Buyer in notifying the Stockholder shall relieve the Stockholder or the Sellers
of any liability or obligation hereunder except to the extent of any damage or
liability caused by or arising out of such failure. Within 20 days after
delivery of such notification, the Stockholder may, upon written notice thereof
to the Buyer, assume control of the defense of such action, suit or proceeding
with counsel reasonably satisfactory to the Buyer, provided the Stockholder
acknowledges in writing to the Buyer that any damages, fines, costs or other
liabilities that may be assessed against the Indemnified Parties in connection
with such action, suit or proceeding constitute Damages for which the
Indemnified Parties shall be entitled to indemnification pursuant to this
Section 6. If the Stockholder does not so assume control of such defense, the
Buyer shall control such defense. The party not controlling such defense may
participate therein at its own expense; provided that if the Stockholder assumes
control of such defense and the Buyer reasonably concludes that the indemnifying
parties and the Indemnified Parties have conflicting interests or different
defenses available with respect to such action, suit or proceeding, the
reasonable fees and expenses of counsel to the Indemnified Parties shall be
considered "Damages" for purposes of this Agreement. The party controlling such
defense shall keep the other party advised of the status of such action, suit or
proceeding and the defense thereof and shall consider in good faith
recommendations made by the other party with respect thereto. The Buyer shall
not agree to any settlement of such action, suit or proceeding without the prior
written consent of the Stockholder, which shall not be unreasonably withheld.
The Stockholder and the Sellers shall not agree to any settlement of such
action, suit or proceeding without the prior written consent of the Buyer, which
shall not be unreasonably withheld.
-33-
c. Survival. The representations and warranties of the
Stockholder and the Sellers set forth in this Agreement shall survive the
Closing and the consummation of the transactions contemplated hereby and
continue until the fifth anniversary of the Closing Date and shall not be
affected by any examination made for or on behalf of the Buyer or the knowledge
of any of the Buyer's officers, directors, stockholders, employees or agents. If
a notice is given before the expiration of such periods, then (notwithstanding
the expiration of such time period) the representation or warranty applicable to
such claim shall survive until, but only for purposes of, the resolution of such
claim.
d. Limitations. Except with respect to claims based on fraud,
the rights of the Buyer under this Section 6 shall be the exclusive remedy of
the Buyer with respect to claims resulting from or relating to any
misrepresentation, breach of warranty or failure to perform any covenant or
agreement of the Stockholder or the Sellers contained in this Agreement
(provided that nothing contained in this Agreement shall limit or restrict any
right or remedy the Buyer may have under any Environmental Law).
7. Termination.
a. Termination of Agreement. This Agreement may be terminated
prior to the Closing Date as provided below:
i. the Stockholder, the Sellers and the Buyer may
terminate this Agreement by mutual written consent;
ii. the Buyer may terminate this Agreement by giving
written notice to the Stockholder in the event the Stockholder or any Seller is
in breach, and the Stockholder and the Sellers may terminate this Agreement by
giving written notice to the Buyer in the event the Buyer is in breach, of any
material representation, warranty or covenant contained in this Agreement, and
such breach is not remedied within 10 days of delivery of written notice
thereof;
iii. the Buyer may terminate this Agreement by giving
written notice to the Stockholder if the Closing shall not have occurred on or
before the 60th day following the date of this Agreement by reason of the
failure of any condition precedent under Section 5(a) or 5(b) hereof (unless the
failure results primarily from a breach by the Buyer of any representation,
warranty or covenant contained in this Agreement);
x. the Stockholder and the Sellers may terminate this
Agreement by giving written notice to the Buyer if the Closing shall not have
occurred on or before the 60th day following the date of this Agreement by
reason of the failure of any condition precedent under Section 5(a) or 5(c)
hereof (unless the
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failure results primarily from a breach by the Stockholder or any Seller of any
representation, warranty or covenant contained in this Agreement).
b. Effect of Termination. If any Party terminates this
Agreement pursuant to Section 7(a), all obligations of the Parties hereunder
shall terminate without any liability of any Party to any other Party (except
for any liability of any Party for breaches of this Agreement); provided,
however, that the confidentiality provisions contained in Section 4(d) shall
survive any such termination.
8. Miscellaneous.
a. Press Releases and Announcements. No Party shall issue any
press release or public disclosure relating to the subject matter of this
Agreement without the prior written approval of the other Parties; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by law or regulation (in which case the disclosing Party shall
advise the other Parties and provide them with a copy of the proposed disclosure
prior to making the disclosure).
b. No Third Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any person other than the Parties and their
respective successors and permitted assigns.
c. Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties, and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, with respect to the subject matter hereof.
d. Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Parties; provided, however, that the Buyer may assign its
rights and obligations hereunder to CWS or any affiliate thereof
e. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
f. Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
g. Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim,
-35-
or other communication hereunder shall be deemed duly delivered three business
days after it is sent by registered or certified mail, return receipt requested,
postage prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service, in each case to the intended recipient as set forth
below:
If to any of the Sellers or to the Stockholder: Copy to:
c/o Kenneth H. Mead Earl D. Butler, P.C.
1669 N.W. 114th Loop Vestal Professional Building
Ocala, FL 34475 Annex
231-241 Main Street
Vestal, NY 13850
If to the Buyer: Copy to:
Casella Waste Management of N.Y., Inc. Jeffrey A. Stein, Esq.
Box 866 Hale and Dorr
25 Greens Hill Lane 60 State Street
Rutland, VT 05702 Boston, MA 02109
Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the party for
whom it is intended. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.
h. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts) of
the State of New York.
i. Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
all of the Parties. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
-36-
j. Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
k. Expenses. Each of the Parties shall bear its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
l. Specific Performance. Each of the Parties acknowledges and
agrees that one or more of the other Parties would be damaged irreparably in the
event any of the provisions of this Agreement are not performed in accordance
with their specific terms or otherwise are breached. Accordingly, each of the
Parties agrees that the other Parties shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to the provisions of
Section 8(m)), in addition to any other remedy to which it may be entitled, at
law or in equity.
m. Submission to Jurisdiction. Each of the Parties (a) submits
to the jurisdiction of any state or federal court sitting in the State of
Vermont in any action or proceeding arising out of or relating to this
Agreement, (b) agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court, and (c) agrees not to bring any
action or proceeding arising out of or relating to this Agreement in any other
court. Each of the Parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety
or other security that might be required of any other Party with respect
thereto. Any Party may make service on another Party by sending or delivering a
copy of the process to the Party to be served at the address and in the manner
provided for the giving of notices in Section 8(g). Nothing in this Section
8(m), however, shall affect the right of any Party to serve legal process in any
other manner permitted by law.
-37-
n. Construction. The language used in this Agreement shall be
deemed to be the language chosen by the Parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any Party.
Any reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise.
o. Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
CASELLA WASTE MANAGEMENT
OF N.Y., INC.
By: ______________________________________
Title: ___________________________________
CASELLA WASTE MANAGEMENT
OF PENNSYLVANIA, INC.
By: ______________________________________
Title: ___________________________________
SUPERIOR DISPOSAL SERVICES, INC.
By: ______________________________________
Title: ___________________________________
KENSUE, INC.
By: ______________________________________
Title: ___________________________________
-38-
S.D.S AT PA, INC.
By: ______________________________________
Title: ___________________________________
CLAWS REFUSE, INC.
By: ______________________________________
Title: ___________________________________
__________________________________________
KENNETH H. MEAD
-39-
TERMINATION OF
LEASE AGREEMENT
Agreement made this 25th day of September, 1996, by and between Casella
Associates, a Vermont partnership of Rutland, Vermont (hereinafter referred to
as "Associates") and Casella Waste Management, Inc., a Vermont corporation with
a principal place of business at Rutland, Vermont (hereinafter referred to as
"CWM"). Any and all references within this Agreement to "the parties" shall mean
the aforementioned "Associates" and "CWM".
RECITALS
Whereas, the parties entered into a Lease Agreement, dated August 1, 1993
(hereinafter referred to as the "Lease Agreement") with respect to property
located at 108 Seymour Street, Middlebury, VT (hereinafter referred to as the
"Premises"); and
Whereas, the term of said Lease Agreement was for a period of 117 months, ending
on April 30, 2003; and
Whereas, the parties now wish to terminate said Lease Agreement, specifically
due to the fact that CWM has paid to Associates the total amount of monies
necessary to satisfy the Green Mountain Bank Covenant as specified in Section 18
of the Lease Agreement.
PROVISIONS
Now therefore, in consideration of the mutual terms and covenants contained
herein, the parties agree as follows:
1. Associates hereby acknowledges receipt of the sum of $191,868.98 from CWM on
September 25, 1996.
2. Associates hereby acknowledges and agrees that said $191,868.98 represents
the full and final payment due by CWM under the terms of the Lease Agreement.
3. The parties hereto agree that said Lease Agreement, dated August 1, 1993, is
hereby terminated effective September 30, 1996, and that all the terms and
conditions contained in said Agreement are hereby null and void.
-1-
In witness whereof, the parties have hereunto set their hands and seals this
25th day of September, 1996.
Casella Associates,
By:
- -------------------------------- -----------------------------------
John W. Casella, General Partner
Casella Waste Management, Inc.
By:
------------------------------------
- --------------------------------- Jerry S. Cifor, Vice President &
Treasurer
-2-
LEASE AGREEMENT
---------------
This Lease Agreement is made this 1st day of August, 1993, by and
between CASELLA ASSOCIATES, a Vermont partnership of Rutland, Vermont,
hereinafter collectively referred to as Lessor, and CASELLA WASTE MANAGEMENT,
INC., a Vermont corporation with offices in the City of Rutland, County of
Rutland and State of Vermont, hereinafter referred to as Lessee.
KNOWN ALL MEN BY THESE PRESENT, that for One Dollar and other good and
valuable consideration, receipt of which is acknowledged the above mentioned
parties on the date first above written have agreed to the following:
1. Description. Lessor does hereby let and lease and Lessee hereby
accepts lease of certain premises located at 108 Seymour Street, in the Town of
Middlebury, Vermont (hereinafter "Premises").
2. Term. This Lease is for a term of one hundred seventeen (117)
months commencing on the 1st day of August, 1993, and to continue until April
30, 2003.
3. Rent. The rent due under the terms of this Lease shall be as set
forth herein and as follows:
(a) The rent for August 1, 1993 through April 30, 1994 shall be
the monthly sum of Two Thousand Two Hundred and no/100
Dollars ($2,200.00).
(b) The rent for May 1, 1994 through April 30, 1995 shall be the
monthly sum of Three Thousand Two Hundred and no/100 Dollars
($3,200.00). After April 30, 1995, an annual adjustment to
the rent may be made by Lessor to give full and adequate
consideration to the increase in the consumer price index,
using the consumer price index for all urban consumers,
Boston, Massachusetts, or an equivalent index, indicating
the amount of inflation during the latest period of the
lease.
4. Rent Payments Due. The rent payments specified herein shall be made
monthly. Payments are to be made on the 1st day of each month unless a payment
schedule is otherwise agreed upon by the parties.
5. Insurance and Indemnification. The Lessee shall keep the Premises
insured against loss or damage by fire with extended coverage endorsement in an
amount sufficient to prevent the Lessor from becoming a co-insurer under the
terms of the applicable policies, but in any event, in an amount not less than
ninety percent
-3-
(90%) of the full insurable value as determined from time to time. The Lessor
shall be named as an additional insured.
The Lessee shall indemnify the Lessor against any liability or loss
arising out of injury to any person, or damage to any property belonging to the
Lessee, the Lessor, or to any other person, occurring in or about the Premises,
and the Lessee shall keep the Premises insured, at its sole cost and expense,
against claims for personal injury or property damage under a policy of general
public liability insurance, with limits of at least $500,000/$1,000,000 for
bodily injury and $500,000 for property damage. Such policies shall name the
Lessor and the Lessee as the insureds. Within ten (10) days after the date
hereof, the Lessee shall deliver to the Lessor, certificates of insurance
certifying that such insurance is in full force and effect. Lessee shall
continue to deliver such certificates of insurance during the term of this
Lease, at least annually.
If, at anytime after the execution hereof, the improvements on the
demised Premises are destroyed or damaged by fire or the elements or by any
other cause whatsoever, Lessor at its expense to the extent that there are
sufficient insurance proceeds, shall restore or rebuild them as nearly as
practicable to the condition existing just prior to such destruction or damage
except that if said improvements are destroyed or damaged during the last two
years of the term of this Lease. If the Premises are not rebuilt, the proceeds
of the insurance shall go to the Lessor.
6. Repairs. Lessee shall at all times be responsible for all repairs
and maintenance on and to the Premises, including but not limited to major
structural repairs and roof repairs.
7. Taxes. The Lessee, in addition to the fixed rent provided for
herein, shall pay all taxes and assessments upon the Premises and upon the
buildings and improvements thereon, which are assessed during the lease term.
8. Utilities. The Lessee shall pay all charges for gas, electricity,
light, heat, power and telephone or other communication services used, rendered
or supplied upon or in connection with the Premises, and shall indemnify the
Lessor against any liability or damages on such account.
9. Default. If the Premises shall be deserted or vacated, or if
proceedings are commenced against the Lessee in any court under a bankruptcy act
or for the appointment of a trustee or a receiver of the Lessee's property
either before or after the commencement of the Lease term, or if there shall be
a default in the payment of rent or any part thereof for more than ten (10) days
after written notice of such default by the Lessor, or if there shall be default
in the performance of any other covenant, agreement, condition, rule or
regulation herein contained or hereafter established on the part of the Lessee
for more than twenty (20) days after written
-4-
notice of such default by the Lessor, this Lease, if the Lessor so elects, shall
thereupon become null and void, and the Lessor shall have the right to re-enter
or repossess the Premises, either by force, summary proceedings, surrender or
otherwise and dispossess and remove therefrom the Lessee, or other occupants
thereof, and their effects, without being liable to any prosecution therefor.
In case of default, the Lessor may, at its option, re-let the Premises
or any part thereof, as the agent of the Lessee and the Lessee shall pay the
Lessor the difference between the rent hereby reserved and agreed to be paid by
the Lessee for the portion of the term remaining at the time of re-entry or
repossession and the amount, if any, received or to be received under such
re-letting for such portion of the term.
10. Assignment. Lessee shall not assign this Lease without Lessor's
written approval of the assignment, which approval may be withheld by Lessor for
any reason. Lessor shall either grant approval of any assignment or withhold
approval of any assignment within thirty (30) days after notice in writing by
the Lessee to the Lessor of the proposed assignment. Lessor retains a right to
assign this Lease without Lessee's consent or approval.
11. Acceptance of Property. At the commencement of the term, the
Lessee shall accept the buildings, improvements and any equipment on or in the
Premises, in their existing condition. No representation, statement or warranty,
expressed or implied, has been made by or on behalf of the Lessor as to such
condition, or as the use that may be made on such property. In no event shall
the Landlord be liable for any defect in such property or for any limitation on
its use.
12. Reimbursement of Expenses. The Lessee shall pay and indemnify the
Lessor against all legal costs and charges, including counsel fees lawfully and
reasonably incurred in obtaining possession of the Premises after a default of
the Lessee, as defined in this lease, or after Lessee's default in surrendering
possession upon the expiration or earlier termination of the term of the lease
or enforcing any covenant of the Lessee herein contained.
13. Lessor's Right of Access. The Lessor and its representatives may
enter the Premises at any reasonable time for the purpose of inspecting the
Premises, performing any work which the Lessor elects to undertake or was made
necessary by reason of the Lessee's default under the terms of this Lease,
exhibiting the Premises for sale, lease or mortgage financing, or posting
notices of non responsibility under any mechanic's lien law.
14. Leasehold Improvements. Lessee shall not make any leasehold
improvements to the premises without Lessor's prior consent.
-5-
15. Binding Effect. The covenants, conditions and agreements contained
in this Lease shall bind and inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors and, except as
otherwise provided herein, their assigns.
16. Condition of Property. Upon expiration or termination of the Lease
or any extension thereof, the Lessee shall deliver up said Premises and
improvements thereto to said Lessor in as good condition as they were in at the
commencement of this Lease, or may have been put in during the term of this
Lease, except for ordinary wear and tear.
17. Title to Lease Premises. The Lessor represents and warrants that
it is the owner of the leased premises and has the right to make this Lease and
that the Lessee, on paying the rent herein reserved and upon performing all of
the terms and conditions of this Lease on its part to be performed, shall at all
times during the term herein demised peacefully and quietly have, hold and enjoy
the Premises.
18. Green Mountain Bank Covenant. So long as any outstanding balance
remains on the Green Mountain Bank $1,340,000 Term Loan to Casella Associates
("Lessor"), Lessor and Lessee shall not make any modifications to this Lease
Agreement without the written consent to do so from Green Mountain Bank. This
Lease Agreement may only be terminated prior to the expiration of the Lease
Term, if Lessor or Lessee pays 15.2% of the then current outstanding principal
balance on the Term Loan to Green Mountain Bank.
19. Compliance with Laws. Lessee agrees to comply with all local,
state and federal laws with regard to the Premises and its maintenance and
improvement thereof.
20. Law. This Lease shall be governed by the laws of Vermont.
IN WITNESS WHEREOF, Lessor and Lessee have respectfully signed and
sealed this Lease Agreement as of the date and year first above written.
LESSOR
CASELLA ASSOCIATES
By:
- ------------------------------ --------------------------------
Witness Duly Authorized Partner
LESSEE
CASELLA WASTE MANAGEMENT, INC.
_______________________________ By: __________________________
Witness Its Duly Authorized Agent
-6
AMENDMENT TO LEASE AGREEMENT
----------------------------
This Amendment to Lease Agreement made this 9th day of December, 1994, by
and between CASELLA ASSOCIATES, a Vermont partnership of Rutland, Vermont (the
"Lessor") and CASELLA WASTE MANAGEMENT, INC., a Vermont corporation with offices
in the City of Rutland, County of Rutland and State of Vermont (the "Lessee").
W I T N E S S E T H:
WHEREAS, the Lessor and the Lessee entered into a Lease Agreement, dated
August 1, 1993, respecting certain premises located at 25 Greens Hill Land,
Rutland, Vermont (the "Lease Agreement"); and
WHEREAS, the Lessor and the Lessee now wish to amend the Lease Agreement to
provide Lessee with the option to extend the term of the Lease Agreement for two
additional five year terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter set forth, the parties agree as follows:
1. Section 2, entitled "Term," of the Lease Agreement is hereby deleted in
its entirety and replaced with a new Section 2:
Section 2. Term. This Lease is for an initial term of one hundred
seventeen (117) months commencing on the 1st day of August, 1993, and
to continue until April 30, 2003. The Lessee shall have the option to
extend the initial term for two (2) successive periods of five (5)
years each upon the same terms as contained in this Lease, except as
otherwise specifically stated herein. The Lessee shall exercise its
option by giving written notice to the Lessor not less than six (6)
months prior to expiration of the initial term or the then ending
additional term, as the case may be. The monthly rent during any
additional term shall be determined pursuant to Section 3(b) of this
Lease.
2. Except as aforesaid, the parties hereto affirm and ratify the terms of
the Lease Agreement between them in all respects. The Lease Agreement and this
Amendment thereto shall be read and construed as one Agreement.
3. This Agreement, together with all of the respective rights of the
parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Vermont.
4. This Agreement shall be binding upon and inure to the benefit of each of
the parties hereto and their respective successors in title and assigns.
IN WITNESS WHEREOF, the parties have executed this Amendment to the Lease
Agreement effective the day and year first above-written.
IN PRESENCE OF: Lessor:
CASELLA ASSOCIATES
By:
- ------------------------------------ ------------------------------------
Duly Authorized Partner
Lessee:
CASELLA WASTE MANAGEMENT, INC.
By:
- ------------------------------------ ------------------------------------
Duly Authorized Partner
LEASE AGREEMENT
---------------
This Lease Agreement is made this 1st day of August, 1993, by and between
CASELLA ASSOCIATES, a Vermont partnership of Rutland, Vermont, hereinafter
collectively referred to as Lessor, and CASELLA WASTE MANAGEMENT, INC., a
Vermont corporation with offices in the City of Rutland, County of Rutland and
State of Vermont, hereinafter referred to as Lessee.
KNOWN ALL MEN BY THESE PRESENT, that for One Dollar and other good and
valuable consideration, receipt of which is acknowledged the above mentioned
parties on the date first above written have agreed to the following:
1. Description. Lessor does hereby let and lease and Lessee hereby accepts
lease of certain premises located at 25 Greens Hill Lane, in the City of
Rutland, Vermont (hereinafter "Premises").
2. Term. This Lease is for a term of one hundred seventeen (117) months
commencing on the 1st day of August, 1993, and to continue until April 30, 2003.
3. Rent. The rent due under the terms of this Lease shall be as set forth
herein and as follows:
(a) The rent for August 1, 1993 through April 30, 1994 shall be the
monthly sum of Six Thousand Eight Hundred and no/100 Dollars
($6,800.00).
(b) The rent for May 1, 1994 through April 30, 1995 shall be the
monthly sum of Eight Thousand Eight Hundred and no/100 Dollars
($8,800.00). After April 30, 1995, an annual adjustment to the
rent may be made by Lessor to give full and adequate
consideration to the increase in the consumer price index, using
the consumer price index for all urban consumers, Boston,
Massachusetts, or an equivalent index, indicating the amount of
inflation during the latest period of the lease.
4. Rent Payments Due. The rent payments specified herein shall be made
monthly. Payments are to be made on the 1st day of each month unless a payment
schedule is otherwise agreed upon by the parties.
5. Insurance and Indemnification. The Lessee shall keep the Premises
insured against loss or damage by fire with extended coverage endorsement in an
amount sufficient to prevent the Lessor from becoming a co-insurer under the
terms of the applicable policies, but in any event, in an amount not less than
ninety percent (90%) of the full insurable value as determined from time to
time. The Lessor shall be named as an additional insured.
The Lessee shall indemnify the Lessor against any liability or loss arising
out of injury to any person, or damage to any property belonging to the Lessee,
the Lessor, or to any other person, occurring in or about the Premises, and the
Lessee shall keep the Premises insured, at is sole cost and expense, against
claims for personal injury or property damage under a policy of general public
liability insurance, with limits of at least $500,000/$1,000,000 for bodily
injury and $500,000 for property damage. Such policies shall name the Lessor and
the Lessee as the insureds. Within ten (10) days after the date hereof, the
Lessee shall deliver to the Lessor, certificates of insurance certifying that
such insurance is in full force and effect. Lessee shall continue to deliver
such certificates of insurance during the term of this Lease, at least annually.
If, at anytime after the execution hereof, the improvements on the demised
Premises are destroyed or damaged by fire or the elements or by any other cause
whatsoever, Lessor at its expense to the extent that there are sufficient
insurance proceeds, shall restore or rebuild them as nearly as practicable to
the condition existing just prior to such destruction or damage except that if
said improvements are destroyed or damaged during the last two years of the term
of this Lease. If the Premises are not rebuilt, the proceeds of the insurance
shall go to the Lessor.
6. Repairs. Lessee shall at all times be responsible for all repairs and
maintenance on and to the Premises, including but not limited to major
structural repairs and roof repairs.
7. Taxes. The Lessee, in addition to the fixed rent provided for herein,
shall pay all taxes and assessments upon the Premises and upon the buildings and
improvements thereon, which are assessed during the lease term.
-2-
8. Utilities. The Lessee shall pay all charges for gas, electricity, light,
heat, power and telephone or other communication services used, rendered or
supplied upon or in connection with the Premises, and shall indemnify the Lessor
against any liability or damages on such account.
9. Default. If the Premises shall be deserted or vacated, or if proceedings
are commenced against the Lessee in any court under a bankruptcy act or for the
appointment of a trustee or a receiver of the Lessee's property either before or
after the commencement of the Lease term, or if there shall be a default in the
payment of rent or any part thereof for more than ten (10) days after written
notice of such default by the Lessor, or if there shall be default in the
performance of any other covenant, agreement, condition, rule or regulation
herein contained or hereafter established on the part of the Lessee for more
than twenty (20) days after written notice of such default by the Lessor, this
Lease, if the Lessor so elects, shall thereupon become null and void, and the
Lessor shall have the right to re-enter or repossess the Premises, either by
force, summary proceedings, surrender or otherwise and dispossess and remove
therefrom the Lessee, or other occupants thereof, and their effects, without
being liable to any prosecution therefor.
In case of default, the Lessor may, at its option, re-let the Premises or
any part thereof, as the agent of the Lessee and the Lessee shall pay the Lessor
the difference between the rent hereby reserved and agreed to be paid by the
Lessee for the portion of the term remaining at the time of re-entry or
repossession and the amount, if any, received or to be received under such
re-letting for such portion of the term.
10. Assignment. Lessee shall not assign this Lease without Lessor's written
approval of the assignment, which approval may be withheld by Lessor for any
reason. Lessor shall either grant approval of any assignment or withhold
approval of any assignment within thirty (30) days after notice in writing by
the Lessee to the Lessor of the proposed assignment. Lessor retains a right to
assign this Lease without Lessee's consent or approval.
11. Acceptance of Property. At the commencement of the term, the Lessee
shall accept the buildings, improvements and any equipment on or in the
Premises,
-3-
in their existing condition. No representation, statement or warranty, expressed
or implied, has been made by or on behalf of the Lessor as to such condition, or
as the use that may be made on such property. In no event shall the Landlord be
liable for any defect in such property or for any limitation on its use.
12. Reimbursement of Expenses. The Lessee shall pay and indemnify the
Lessor against all legal costs and charges, including counsel fees lawfully and
reasonably incurred in obtaining possession of the Premises after a default of
the Lessee, as defined in this lease, or after Lessee's default in surrendering
possession upon the expiration or earlier termination of the term of the lease
or enforcing any covenant of the Lessee herein contained.
13. Lessor's Right of Access. The Lessor and its representatives may enter
the Premises at any reasonable time for the purpose of inspecting the Premises,
performing any work which the Lessor elects to undertake or was made necessary
by reason of the Lessee's default under the terms of this Lease, exhibiting the
Premises for sale, lease or mortgage financing, or posting notices of non
responsibility under any mechanic's lien law.
14. Leasehold Improvements. Lessee shall not make any leasehold
improvements to the premises without Lessor's prior consent.
15. Binding Effect. The covenants, conditions and agreements contained in
this Lease shall bind and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and, except as otherwise
provided herein, their assigns.
16. Condition of Property. Upon expiration or termination of the Lease or
any extension thereof, the Lessee shall deliver up said Premises and
improvements thereto to said Lessor in as good condition as they were in at the
commencement of this Lease, or may have been put in during the term of this
Lease, except for ordinary wear and tear.
17. Title to Lease Premises. The Lessor represents and warrants that it is
the owner of the leased premises and has the right to make this Lease and that
the Lessee, on paying the rent herein reserved and upon performing all of the
terms and
-4-
conditions of this Lease on its part to be performed, shall at all times during
the term herein demised peacefully and quietly have, hold and enjoy the
Premises.
18. Green Mountain Bank Covenant. So long as any outstanding balance
remains on the Green Mountain Bank $1,340,000 Term Loan to Casella Associates
("Lessor"), Lessor and Lessee shall not make any modifications to this Lease
Agreement without the written consent to do so from Green Mountain Bank. This
Lease Agreement may only be terminated prior to the expiration of the Lease
Term, if Lessor or Lessee pays 41.9% of the then current outstanding principal
balance on the Term Loan to Green Mountain Bank.
19. Compliance with Laws. Lessee agrees to comply with all local, state and
federal laws with regard to the Premises and its maintenance and improvement
thereof.
20. Law. This Lease shall be governed by the laws of Vermont.
IN WITNESS WHEREOF, Lessor and Lessee have respectfully signed and sealed
this Lease Agreement as of the date and year first above written.
LESSOR
CASELLA ASSOCIATES
By:
- ------------------------------- -----------------------------------
Witness Duly Authorized Partner
LESSEE
CASELLA WASTE MANAGEMENT, INC.
By:
- ------------------------------- -----------------------------------
Witness Its Duly Authorized Partner
-5-
AMENDMENT TO LEASE AGREEMENT
----------------------------
This Amendment to Lease Agreement made this 9th day of December, 1994, by
and between CASELLA ASSOCIATES, a Vermont partnership of Rutland, Vermont (the
"Lessor") and CASELLA WASTE MANAGEMENT, INC., a Vermont corporation with offices
in the City of Rutland, County of Rutland and State of Vermont (the "Lessee").
W I T N E S S E T H:
WHEREAS, the Lessor and the Lessee entered into a Lease Agreement, dated
August 1, 1993, respecting certain premises located off East Montpelier Road,
Montpelier, Vermont (the "Lease Agreement"); and
WHEREAS, the Lessor and the Lessee now wish to amend the Lease Agreement to
provide Lessee with the option to extend the term of the Lease Agreement for two
additional five year terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter set forth, the parties agree as follows:
1. Section 2, entitled "Term," of the Lease Agreement is hereby deleted in
its entirety and replaced with a new Section 2:
Section 2. Term. This Lease is for an initial term of one hundred
seventeen (117) months commencing on the 1st day of August, 1993, and
to continue until April 30, 2003. The Lessee shall have the option to
extend the initial term for two (2) successive periods of five (5)
years each upon the same terms as contained in this Lease, except as
otherwise specifically stated herein. The Lessee shall exercise its
option by giving written notice to the Lessor not less than six (6)
months prior to expiration of the initial term or the then ending
additional term, as the case may be. The monthly rent during any
additional term shall be determined pursuant to Section 3(b) of this
Lease.
2. Except as aforesaid, the parties hereto affirm and ratify the terms of
the Lease Agreement between them in all respects. The Lease Agreement and this
Amendment thereto shall be read and construed as one Agreement.
3. This Agreement, together with all of the respective rights of the
parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Vermont.
4. This Agreement shall be binding upon and inure to the benefit of each of
the parties hereto and their respective successors in title and assigns.
IN WITNESS WHEREOF, the parties have executed this Amendment to the Lease
Agreement effective the day and year first above-written.
IN PRESENCE OF: Lessor:
CASELLA ASSOCIATES
By:
- ------------------------------- -----------------------------------
Duly Authorized Partner
Lessee:
CASELLA WASTE MANAGEMENT, INC.
By:
- ------------------------------- -----------------------------------
Duly Authorized Partner
LEASE AGREEMENT
---------------
This Lease Agreement is made this 1st day of August, 1993, by and between
CASELLA ASSOCIATES, a Vermont partnership of Rutland, Vermont, hereinafter
collectively referred to as Lessor, and CASELLA WASTE MANAGEMENT, INC., a
Vermont corporation with offices in the City of Rutland, County of Rutland and
State of Vermont, hereinafter referred to as Lessee.
KNOWN ALL MEN BY THESE PRESENT, that for One Dollar and other good and
valuable consideration, receipt of which is acknowledged the above mentioned
parties on the date first above written have agreed to the following:
1. Description. Lessor does hereby let and lease and Lessee hereby accepts
lease of certain premises located off East Montpelier Road, Washington County,
Montpelier, Vermont and as more particularly described as, "a portion of the
land and premises conveyed to Lessor by Charles and Martha Haynes by deed dated
June 30, 1988 and filed in Book 217 at Page 349 of the City of Montpelier Land
Records (hereinafter "Premises").
2. Term. This Lease is for a term of one hundred seventeen (117) months
commencing on the 1st day of August, 1993, and to continue until April 30, 2003.
3. Rent. The rent due under the terms of this Lease shall be as set forth
herein and as follows:
(a) The rent for August 1, 1993 through April 30, 1994 shall be the
monthly sum of Seven Thousand Thirty and 50/100 Dollars ($7,030.50).
(b) The rent for May 1, 1994 through April 30, 1995 shall be the monthly
sum of Nine Thousand and no/100 Dollars ($9,000.00). After April 30,
1995, an annual adjustment to the rent may be made by Lessor to give
full and adequate consideration to the increase in the consumer price
index, using the consumer price index for all urban consumers, Boston,
Massachusetts, or an equivalent index, indicating the amount of
inflation during the latest period of the lease.
4. Rent Payments Due. The rent payments specified herein shall be made
monthly. Payments are to be made on the 1st day of each month unless a payment
schedule is otherwise agreed upon by the parties.
5. Insurance and Indemnification. The Lessee shall keep the Premises
insured against loss or damage by fire with extended coverage endorsement in an
amount sufficient to prevent the Lessor from becoming a co-insurer under the
terms of the applicable policies, but in any event, in an amount not less than
ninety percent (90%) of the full insurable value as determined from time to
time. The Lessor shall be named as an additional insured.
The Lessee shall indemnify the Lessor against any liability or loss arising
out of injury to any person, or damage to any property belonging to the Lessee,
the Lessor, or to any other person, occurring in or about the Premises, and the
Lessee shall keep the Premises insured, at is sole cost and expense, against
claims for personal injury or property damage under a policy of general public
liability insurance, with limits of at least $500,000/$1,000,000 for bodily
injury and $500,000 for property damage. Such policies shall name the Lessor and
the Lessee as the insureds. Within ten (10) days after the date hereof, the
Lessee shall deliver to the
-2-
Lessor, certificates of insurance certifying that such insurance is in full
force and effect. Lessee shall continue to deliver such certificates of
insurance during the term of this Lease, at least annually.
If at anytime after the execution hereof, the improvements on the demised
Premises are destroyed or damaged by fire or the elements or by any other cause
whatsoever, Lessor at its expense to the extent that there are sufficient
insurance proceeds, shall restore or rebuild them as nearly as practicable to
the condition existing just prior to such destruction or damage except that if
said improvements are destroyed or damaged during the last two years of the term
of this Lease. If the Premises are not rebuilt, the proceeds of the insurance
shall go to the Lessor.
6. Repairs. Lessee shall at all times be responsible for all repairs and
maintenance on and to the Premises, including but not limited to major
structural repairs and roof repairs.
7. Taxes. The Lessee, in addition to the fixed rent provided for herein,
shall pay all taxes and assessments upon the Premises and upon the buildings and
improvements thereon, which are assessed during the lease term.
8. Utilities. The Lessee shall pay all charges for gas, electricity, light,
heat, power and telephone or other communication services used, rendered or
supplied upon or in connection with the Premises, and shall indemnify the Lessor
against any liability or damages on such account.
9. Default. If the Premises shall be deserted or vacated, or if proceedings
are commenced against the Lessee in any court under a bankruptcy act or for the
-3-
appointment of a trustee or a receiver of the Lessee's property either before or
after the commencement of the Lease term, or if there shall be a default in the
payment of rent or any part thereof for more than ten (10) days after written
notice of such default by the Lessor, or if there shall be default in the
performance of any other covenant, agreement, condition, rule or regulation
herein contained or hereafter established on the part of the Lessee for more
than twenty (20) days after written notice of such default by the Lessor, this
Lease, if the Lessor so elects, shall thereupon become null and void, and the
Lessor shall have the right to re-enter or repossess the Premises, either by
force, summary proceedings, surrender or otherwise and dispossess and remove
therefrom the Lessee, or other occupants thereof and their effects, without
being liable to any prosecution therefor.
In case of default, the Lessor may, at its option, re-let the Premises or
any part thereof, as the agent of the Lessee and the Lessee shall pay the Lessor
the difference between the rent hereby reserved and agreed to be paid by the
Lessee for the portion of the term remaining at the time of re-entry or
repossession and the amount, if any, received or to be received under such
re-letting for such portion of the term.
10. Assignment. Lessee shall not assign this Lease without Lessor's written
approval of the assignment, which approval may be withheld by Lessor for any
reason. Lessor shall either grant approval of any assignment or withhold
approval of any assignment within thirty (30) days after notice in writing by
the Lessee to the Lessor of the proposed assignment. Lessor retains a right to
assign this Lease without Lessee's consent or approval.
-4-
11. Acceptance of Property. At the commencement of the term, the Lessee
shall accept the buildings, improvements and any equipment on or in the
Premises, in their existing condition. No representation, statement or warranty,
expressed or implied, has been made by or on behalf of the Lessor as to such
condition, or as the use that may be made on such property. In no event shall
the Landlord be liable for any defect in such property or for any limitation on
its use.
12. Reimbursement of Expenses. The Lessee shall pay and indemnify the
Lessor against all legal costs and charges, including counsel fees lawfully and
reasonably incurred in obtaining possession of the Premises after a default of
the Lessee, as defined in this lease, or after Lessee's default in surrendering
possession upon the expiration or earlier termination of the term of the lease
or enforcing any covenant of the Lessee herein contained.
13. Lessor's Right of Access. The Lessor and its representatives may enter
the Premises at any reasonable time for the purpose of inspecting the Premises,
performing any work which the Lessor elects to undertake or was made necessary
by reason of the Lessee's default under the terms of this Lease, exhibiting the
Premises for sale, lease or mortgage financing, or posting notices of non
responsibility under any mechanic's lien law.
14. Leasehold Improvements. Lessee shall not make any leasehold
improvements to the premises without Lessor's prior consent.
15. Binding Effect. The covenants, conditions and agreements contained in
this Lease shall bind and inure to the benefit of the parties hereto and their
respective
-5-
heirs, legal representatives, successors and, except as otherwise provided
herein, their assigns.
16. Condition of Property. Upon expiration or termination of the Lease or
any extension thereof, the Lessee shall deliver up said Premises and
improvements thereto to said Lessor in as good condition as they were in at the
commencement of this Lease, or may have been put in during the term of this
Lease, except for ordinary wear and tear.
17. Title to Lease Premises. The Lessor represents and warrants that it is
the owner of the leased premises and has the right to make this Lease and that
the Lessee, on paying the rent herein reserved and upon performing all of the
terms and conditions of this Lease on its part to be performed, shall at all
times during the term herein demised peacefully and quietly have, hold and enjoy
the Premises.
18. Green Mountain Bank Covenant. So long as any outstanding balance
remains on the Green Mountain Bank $1,340,000 Term Loan to Casella Associates
("Lessor"), Lessor and Lessee shall not make any modifications to this Lease
Agreement without the written consent to do so from Green Mountain Bank. This
Lease Agreement may only be terminated prior to the expiration of the Lease
Term, if Lessor or Lessee pays 42.9% of the then current outstanding principal
balance on the Term Loan to Green Mountain Bank.
19. Compliance with Laws. Lessee agrees to comply with all local, state and
federal laws with regard to the Premises and its maintenance and improvement
thereof.
-6-
20. Law. This Lease shall be governed by the laws of Vermont.
IN WITNESS WHEREOF, Lessor and Lessee have respectfully signed and sealed
this Lease Agreement as of the date and year first above written.
LESSOR
CASELLA ASSOCIATES
By:
- ------------------------------- -----------------------------------
Witness Duly Authorized Partner
LESSEE
CASELLA WASTE MANAGEMENT, INC.
By:
- ------------------------------- -----------------------------------
Witness Its Duly Authorized Agent
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FURNITURE AND FIXTURES LEASE RENEWAL AGREEMENT
----------------------------------------------
KNOWN ALL MEN BY THESE PRESENTS that this Agreement (a renewal of the
"Equipment Lease Agreement" dated the 1st of May, 1989) made this 1st day of
May, 1994, by and between CASELLA ASSOCIATES, a Vermont Partnership with its
principal place of business located in the City of Rutland, County of Rutland,
and State of Vermont, hereinafter referred to as "Lessor" and CASELLA WASTE
MANAGEMENT, INC., a Vermont corporation in the City of Rutland, County of
Rutland and State of Vermont, hereinafter referred to as "Lessee" as follows:
1. SUBJECT. Lessor leases to Lessee and the Lessee hires from Lessor the
following property as set forth in this paragraph (hereinafter referred to as
"Furniture and Fixtures"): Office equipment including but not limited to desks,
chairs, table and file cabinets as may be replaced or supplemented from time to
time by Lessor or at the request of Lessee.
2. RENEWED TERM AND RENT. This Lease is for a renewed term of sixty (60)
months commencing on the 1st day of May, 1994, and ending the 30th day of April,
1999, for a monthly rent of Nine Hundred Fifty and 00/100 Dollars ($950.00) to
be paid by the Lessee to Lessor in monthly installments on the 1st day of each
and every month during the term hereof. Upon expiration of the Renewed Term,
Lessee shall purchase for cash consideration, all (but not less than all) of the
Furniture and Fixtures for an amount equal to Five Thousand and 00/100 Dollars
($5,000.00) plus all applicable sales, use and other taxes thereon, on an "as
is, where is" basis.
3. SECURITY INTEREST. In order to secure payment and performance of
Lessee's obligations hereunder, Lessee hereby grants Lessor a security interest
in (i) the Furniture and Fixtures, and (ii) all proceeds of such property,
including but not limited to insurance proceeds.
4. TAXES AND OTHER CHARGES.
(a) The Lessee shall pay all use taxes, personal property taxes or
other direct taxes imposed on the ownership, possession, use or operation of the
Furniture and Fixtures or levies against or based upon the ownership, title or
-1-
property rights or interest in and to said equipment and the same shall be
billed to the Lessee by the Lessor as it comes due.
(b) All certificates of title or registration applicable to the
Furniture and Fixtures shall be applied for, issued and maintained in the name
of the Lessor as owner, and the lessee shall pay all costs in relation thereto.
(c) If the taxes, licensing, registration or permit fees, fines or
other charges that the Lessee is responsible for under this paragraph are
levied, assessed, charged, or imposed against the Lessor, it shall notify the
Lessee in writing of such fact. The Lessor shall have the option, but not the
obligation, to pay any such tax, licensing, registration, or permit fee, fine or
other charge whether levied, assessed, charged or imposed against the Lessor or
the Lessee. In the event such payment is made by Lessor, the Lessee shall
reimburse the Lessor within seven (7) days after receipt of an invoice thereof,
and the failure to make such reimbursement when due shall be deemed a default on
the part of Lessee.
5. MAINTENANCE AND REPAIR. The Lessee shall pay all expenses at the
Lessee's sole cost and expense to keep the Furniture and Fixtures in good
repair, mechanical condition and operating order.
(a) Lessee shall at its own cost and expense make all repairs as may
be necessary to keep and maintain Furniture and Fixtures at all times in first
class condition and repair.
(b) Lessee, at Lessee's own cost and expense and without any
obligation or liability whatsoever on the part of Lessor, shall keep the
Furniture and Fixtures in good repair, condition, and working order and shall
furnish any and all parts, mechanisms and devices required to keep the Furniture
and Fixtures in good mechanical and working order, all of which shall become
Furniture and Fixtures covered by this Lease.
(c) The Lessee shall at all times provide suitable garage facilities
and appropriate service for the Furniture and Fixtures including washing,
polishing, cleaning, inspection and storage space and, at the end or other
expiration of this Lease, shall return the Furniture and Fixtures to the Lessor
at the address above set
-2-
forth in the same condition and state of repair as it was at the date of
delivery, ordinary wear and tear excepted.
6. INSURANCE. The Lessee hereby indemnifies and shall hold the Lessor
harmless from all loss and damage the Lessor may sustain or suffer by reason of:
(a) The loss of or damage to the Furniture and Fixtures because of
fire, theft, collision, lightning, flood, windstorm, explosion or other
casualty, or
(b) The death of or injury to the person or property of any third
person as a result, in whole or part, of the use or maintenance of the Furniture
and Fixtures during the term of this Lease; and the Lessee shall procure at the
Lessee's cost and expense, a policy or policies of insurance issued by a company
satisfactory to the Lessor with premiums prepaid thereon, insuring the Lessee
against the risks and hazards specified in (a) above to the extent of the full
value of the Furniture and Fixtures and against the risks and hazards as
specified above in minimum amounts of $300,000/$500,000 personal injury
liability and $50,000 property damage liability. Such policy or policies shall
name the Lessor as loss payee and not as co-insured, shall be delivered to the
Lessor simultaneously with or prior to the delivery to the Lessee of the leased
Furniture and Fixtures, and shall carry an endorsement by the insurer either
upon the policy or policies issued by it or by an independent instrument that
the Lessor will receive 30 days' written notice of the alteration or
cancellation of such policy and policies.
(c) Failure by the Lessee to procure such insurance shall not affect
the Lessee's obligations under the terms, covenants and conditions of this
Lease, and the loss, damage to, or destruction of the Furniture and Fixtures
shall not terminate this Lease nor except to the extent that the Lessor is
actually compensated by the insurance paid for by the Lessee, as herein
provided, relieve the Lessee from the Lessee's ability hereunder. Should the
Lessee fail to procure or maintain the insurance provided herein, the Lessor
shall have the option, but not the obligation, to do so on the account of the
Lessee. In the event payment for procuring or maintaining such insurance is made
by the Lessor, the Lessee shall reimburse the
-3-
Lessor within seven (7) days after receipt of an invoice therefor, and the
failure to make such reimbursement when due shall be deemed a default.
(d) Lessee assumes the risk of liability arising from or pertaining to
the possession, operation, or use of such leased Furniture and Fixtures. Lessee
does hereby agree to indemnify, hold safe and harmless against, and defend
Lessor from any and all claims, costs, expenses, damage and liability arising
from or pertaining to the use, possession or operation of such leased Furniture
and Fixtures without limiting the generality of the above.
7. DEFAULT. In the event the Lessee fails to perform any of the terms,
conditions, and covenants in the manner and at the time or times required,
including but not limited to, the payment in full of any rental payment or the
reimbursement on the Lessor of any disbursement made hereunder, or if any
proceeding in bankruptcy or insolvency is instituted by or against the Lessee,
or if reorganization of the Lessee is sought under any statute, state or
federal, or a receiver appointed for the goods and chattels of the Lessee, or
the Lessee makes an assignment for the benefit of creditors or makes an attempt
to sell, secrete, convert, or remove the Furniture and Fixtures or if any
distress, execution, or attachment be levied thereon, or the equipment be
encumbered in any way, or if at any time in the Lessor's judgment its rights in
the Furniture and Fixtures shall be threatened or rendered insecure, the Lessee
shall be deemed to be in default under this Agreement, and the Lessor shall have
the right to exercise either of the following remedies:
(a) To declare the balance of the rental payable hereunder to be due
and payable whereupon the same shall become immediately due and payable; or
(b) To retake and retain the Furniture and Fixtures without demand or
legal process, free of all rights of the Lessee, in which case the Lessee
authorized the Lessor or its agents to enter upon any premises where the
Furniture and Fixtures may be found for the purpose of repossessing the same and
the Lessee specifically waives any right of action it might otherwise have
arising out of such entry and repossession whereupon all rights of the Lessee in
the Furniture and Fixtures shall terminate immediately. If the Lessor retakes
possession of the Furniture and Fixtures
-4-
and at the time of such retaking there shall be in, upon or attached to the
Furniture and Fixtures any property, goods or things of value belonging to the
Lessee or in the custody or under the control of the Lessee, the Lessor is
hereby authorized to take possession of such property, goods, or things of value
and hold the same for the Lessee, or place such property, goods or things of
value in public storage for the account of, in at the expense of, the Lessee.
8. WAIVER. Forbearance on the part of the Lessor to exercise any right or
remedy available hereunder upon the Lessee's breach of the terms, covenants and
conditions of this Agreement or the Lessor's failure to demand the punctual
performance thereof shall not be deemed a waiver:
(a) Of such right or remedy,
(b) Of the requirement of punctual performance, or
(c) Of any subsequent breach or default on the part of the Lessee.
9. ASSIGNMENT.
(a) Neither this Lease nor the Lessee's rights hereunder shall be
assignable by the Lessee without the prior written consent of the Lessor. In the
event that the Lessor consents to an assignment, the assignee shall become bound
by all of the terms, covenants and conditions of the Lease on the Lessee's part
to be performed.
(b) The Lessor shall have the right to sell or assign this Lease
including its right, title and interest to the Furniture and Fixtures and rent
reserved herein. In the event of any assignment by the Lessor, the assignee
shall acquire all of the rights and remedies possessed by or available to the
Lessor. Upon receiving proper notice of any assignment, the Lessee shall
thereafter make rental payment and redelivery of the Furniture and Fixtures as
therein described.
10. ENTIRE AGREEMENT. This instrument contains the entire agreement
between the parties and shall be binding on their respective heirs, executors,
administrators, legal representatives, successors and assigns. This Agreement
may not be amended or altered except by a writing signed by both parties.
-5-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
this 16th day of March, 1994.
LESSOR
CASELLA ASSOCIATES
By:
- ------------------------------- -----------------------------------
Witness Duly Authorized Partner
Witness
LESSEE
CASELLA WASTE MANAGEMENT, INC.
By:
- ------------------------------- -----------------------------------
Witness Duly Authorized Agent
- -------------------------------
Witness
-6-
LEASE, OPERATIONS AND MAINTENANCE AGREEMENT
-------------------------------------------
This Lease, Operations and Maintenance Agreement ("Agreement") is made this
30th day of June, 1994, by and between CV Landfill, Inc., a Vermont corporation
("Owner"), and Casella Waste Management, Inc., a Vermont corporation
("Operator").
In consideration of the mutual covenants, promises, and payments reflected
herein, Owner and Operator agree as follows:
1. Description. Operator does hereby let and lease and Owner hereby accepts
lease of a certain waste transfer station, including all stationary assets,
located on Route 2, in the Town of East Montpelier, Vermont (hereinafter
referred to as "Transfer Station"). Operator will operate and maintain the
Transfer Station during the entire term of this Agreement.
2. Term. This Agreement shall commence on the date first written above and
extend for a period of ten (10) years. This Agreement shall automatically renew
for additional terms of five (5) years unless terminated in writing by either
party at least sixty (60) days prior to the expiration of the then current term.
If the Operator is prohibited from operating the Transfer Station by any
federal, state or local body or agency, the Operator may terminate this
Agreement in its entirety, without any liability for damages, costs or other
compensation as a result of such termination.
3. Rent. The rent due under the terms of this Agreement shall be as set
forth herein and as follows:
(a) The monthly rent for the first five (5) years of this Agreement
shall be at the rate of $5.00 per ton of waste disposed/tipped at the Transfer
Station each month with a minimum rent amount of $6,650.00 per month.
(b) The monthly rent for year six (6) and all subsequent years of this
Agreement shall be at the rate of $2.00 per ton of waste disposed/tipped at the
Transfer Station each month with a minimum rent amount of $2,500.00 per month.
4. Rent Payments Due. The rent payments specified herein shall be made
monthly, thirty (30) days in arrears. Payments are to be made on the 30th day of
each month unless a different payment schedule is agreed upon by the parties.
Operator agrees to pay to Owner all rents due without demand or setoff.
5. Owner Responsibilities. The Owner shall be responsible for the
following:
(a) To assist Operator on a best efforts basis in maintaining and/or
obtaining all governmental permits necessary for the operation of the Transfer
Station.
(b) Maintain the post closure maintenance of the inactive landfill
adjacent to the Transfer Station in such a manner as to not adversely affect the
operation of the Transfer Station.
(c) Owner shall assign all contracts existing on the current operation
of the Transfer Station to the Operator, assuming assignment of such contracts
is not prohibited.
(d) The total taxes payable on the Transfer Station for the tax year
ending March 31, 1995. For subsequent tax years, the Owner shall pay the same
amount as it paid for the tax year ending March 31, 1995 towards the tax
liability assessed against the Owner. Any amount for taxes beyond the Owner's
obligation shall be paid for by the Operator.
6. Operator Responsibilities. The Operator shall be responsible for the
following:
(a) Operator shall abide by all the terms and conditions of all
governmental permits necessary for the operation of the Transfer Station.
Operator will use its best efforts to maintain and/or obtain all governmental
permits required for the operation of the Transfer Station.
(b) Operator will pay all governmental permit costs, insurance,
electric, telephone and other utility bills associated with the operation of the
Transfer Station.
(c) Operator, at its sole cost and expense, shall at all times be
responsible for all repairs and maintenance on and to the Transfer Station,
including but not limited to major structural repairs, fixtures, equipment,
scales, ingress and egress roads, and the building, all of which Operator shall
at all times keep in good order and repair.
(d) Operator shall keep the Transfer Station insured against loss or
damage by fire in an amount not less than ninety percent (90%) of the full
insurable value as determined from time to time. Additionally, Operator shall
carry minimum coverage of One Million Dollars ($1,000,000) comprehensive general
liability per occurrence. The Owner shall be named as an additional insured.
Operator shall furnish upon request of Owner, proof that the aforesaid insurance
policies are in effect.
7. Equipment Purchase Option. Operator shall have the right to lease from
the Owner all the rolling stock equipment, trailers and containers currently
utilized by the Transfer Station as set forth on Exhibit A, for up to six (6)
months from the date of execution of this Agreement at the rate of $1,000.00 per
month. Operator
-2-
shall have the option to purchase the same equipment, trailers and containers
from the Owner at a price mutually agreed upon by both parties. The purchase
option will expire six (6) months from the date of execution of this Agreement.
8. Reports.
(a) Operator shall, within thirty (30) days following the end of each
month, submit to Owner a report indicating the total tons of waste
disposed/tipped during the month. Such report shall list the customer by account
number and the amount of waste received from each customer. The identification
of the customer shall not be part of such report. Names and addresses of each
customer from whom tonnage was received by Operator will be provided to Owner in
the event that Owner's examination of Operator's records pursuant to
subparagraph 8(b) reveals an underreporting of at least ten (10%) percent.
(b) Operator agrees to keep full and accurate books of account,
records, scales transaction history and customer tickets in sufficient detail to
enable the rent to be paid hereunder to Owner to be determined. Operator further
agrees to give Owner the right to cause the said books and records to be
examined insofar as they concern waste received/tipped at the Transfer Station
for the purpose of verifying the reports provided for in this Agreement. Prior
to examining Operator's books, records, documents and other relevant materials,
Owner will furnish Operator with at least five (5) days' notice of such
inspection. Such inspection shall take place at Operator's office where
Operator's business records are maintained during normal business hours.
Operator agrees to make available to Owner appropriate space and facilities to
conduct such examination. The cost of representatives of Owner to conduct such
an examination shall be at Owner's expense unless such examination reveals
underreporting of at least ten (10%) percent. In that event, Operator shall
reimburse Owner for the cost of such inspection. Owner may not examine
Operator's books and records more frequently than every six (6) months unless
the prior examination has revealed an underreporting of at least ten (10%)
percent. In such event, Owner may examine Operator's books and records no more
frequently than monthly if Owner so chooses.
9. Casualty Loss. If, at any time during the term hereof, the Transfer
Station or part thereof shall be damaged or destroyed by fire or other
occurrence (including any occurrence for which insurance coverage was not
obtained or obtainable) of any kind or nature, ordinary or extraordinary,
foreseen or unforeseen, Operator, at its sole cost and expense, and whether or
not any available insurance proceeds shall be sufficient for the purpose, shall
immediately proceed to repair, restore, replace or rebuild the Transfer Station
as nearly as possible to its value, condition and character immediately prior to
such damage or destruction (including temporary repairs and work necessary to
protect the Transfer Station from further damage). Under no circumstances shall
Owner be obligated to contribute to the cost
-3-
of repairing or rebuilding the improvements of the Transfer Station. In no event
shall Operator be entitled to any abatement, allowance, reduction or suspension
of rent because part or all of the Transfer Station shall be untenantable owing
to the partial or total destruction thereof. No such damage or destruction shall
affect in any way the obligation of Operator to pay the rent and other charges
required to be paid, nor release Operator of or from obligations imposed upon
Operator hereunder.
10. Default. If any one or more of the following events (herein sometimes
referred to as "events of default") shall happen:
(a) If default shall be made in the due and punctual payment of rent
payable under this lease, or any part thereof, when and as the same shall become
due and payable, and such default shall continue for a period of fifteen (15)
days and for an additional forty-eight (48) hours after receipt by Operator of
written notice from Owner that such rent has not been paid; or
(b) If default shall be made by Operator in the performance or
compliance with any of the agreements, terms, covenants or conditions in the
Lease provided, other than those referred to in the foregoing subparagraph (a)
of this paragraph 10, for a period of twenty (20) days after notice from Owner
to Operator specifying the items in default, or in the case of a default or
contingency which cannot with due diligence be cured within said twenty (20) day
period, if Operator fails to commence within said twenty (20) day period, the
steps necessary to cure the same and thereafter to prosecute the curing of such
default with due diligence (it being understood that the time of Operator within
which to cure shall be extended for such period as may be necessary to complete
the same with all due diligence); or
(c) If Operator shall file a voluntary petition in bankruptcy or shall
be adjudicated as bankrupt or insolvent, or if there shall be appointed a
receiver or trustee of all or substantially all of the property of the Operator
or if Operator shall make assignment for the benefit of Operator's creditors, or
if the Operator shall vacate the Transfer Station, and any such condition shall
continue for a period of twenty (20) days after notice from Owner specifying the
matter involved;
then, and in any such event, Owner at any time thereafter may give written
notice to Operator specifying such event or events of default and stating that
this Lease and the term hereby demised shall expire and terminate on the date
specified in such notice, and upon the date so specified, and all rights of
Operator under this Lease shall expire and terminate on the date specified in
such notice, and upon the date so specified, and all rights of Operator under
this Lease shall expire and terminate.
11. Operator Indemnification. Operator agrees to indemnify, save harmless
and defend Owner from and against any and all liabilities, claims, penalties,
forfeitures, suits and the costs of defense, settlement and reasonable
attorneys' fees,
-4-
which it may hereafter incur, become responsible for, or pay out as a result of
death or bodily injuries to any person, destruction or damage to any property,
contamination or adverse effects on the environment, or any violation of
governmental laws, regulations, or orders caused in whole or in part by Operator
employees, or its subcontractors in the performance of this Agreement, or from
the operation of the Transfer Station by the Operator.
12. Owner Indemnification. Owner agrees to indemnify, save harmless and
defend Operator from and against any and all liabilities, claims, penalties,
forfeitures, suits and the costs of defense, settlement and reasonable
attorneys' fees, which it may hereafter incur, become responsible for, or pay
out as a result of death or bodily injuries to any person, destruction or damage
to any property, contamination or adverse effects on the environment, or any
violation of governmental laws, regulations, or orders caused, in whole or in
part, by (i) any breach of any representation, agreement or obligation of Owner
contained in this Agreement, or (ii) any act or omission of Owner with respect
to, or any event or circumstance related to, the ownership or operation of the
Transfer Station that occurred or existed prior to the commencement of this
Agreement, without regard to whether a claim with respect such matter is
asserted before or after the commencement of this Agreement.
13. Assignment. Neither party may assign, transfer, or otherwise vest in
any other person, any of its rights or obligations under this Agreement without
the prior written consent of the other party, such written consent will not be
unreasonably withheld.
14. Acceptance of Transfer Station. At the commencement of the term of this
Agreement, the Operator shall accept the land, buildings, improvements and any
equipment on or in the Transfer Station, in their existing condition. No
representation, statement or warranty, expressed or implied, has been made by or
on behalf of the Owner as to such condition, or as to the use that may be made
of such property.
15. Leasehold Improvements. Operator may make any leasehold improvements as
deemed necessary by the Operator to improve the operation of the Transfer
Station without the necessity of obtaining Owner's prior consent.
16. Binding Effect. The conditions and agreements contained in this
Agreement shall bind and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and, except as otherwise
provided herein, their assigns.
17. Title to Transfer Station. The Owner represents and warrants that it is
the owner of the Transfer Station and has the right to make this Agreement and
that the Operator, on paying the Rent herein reserved and upon performing all of
the
-5-
terms and conditions of this Agreement on its part to be performed, shall at all
times during the term herein demised peacefully and quietly have, hold and
operate the Transfer Station.
18. Entire Agreement and Construction. This Agreement represents the entire
understanding and agreement between the parties hereto, and supersedes any and
all prior agreements, whether written or oral, that may exist between the
parties regarding same. The validity, interpretation, and performance of this
Agreement shall be governed and construed in accordance with the laws of the
State of Vermont.
19. Expense. Each party will pay all of its expenses, including attorneys'
and accountants' fees in connection with the negotiation of this Agreement and
the consummation of the transactions contemplated by this Agreement.
20. Notice of Lease. Neither this Agreement nor any copy hereof, nor any
memorandum, notice or document making any reference hereto shall be recorded in
the office of the Town Clerk of East Montpelier, Vermont, by Operator, its
agents, representatives or any other persons acting for, with or on the behalf
of Operator, and if this prohibition against recording shall be breached, then
this Agreement shall, at the sole option of Owner be null, void and of no
further force or effect. Notwithstanding the foregoing, a Notice of Lease, in
the form of Notice of Lease attached as Exhibit B and signed simultaneously
herewith by the parties, may be recorded in the office of the Town Clerk of East
Montpelier.
The parties have executed this Agreement as of the day and year first
above written.
IN THE PRESENCE OF: OWNER:
CV LANDFILL, INC.
By
- ------------------------------- -----------------------------------
Name
- ------------------------------- -----------------------------------
Title
-----------------------------------
OPERATOR:
CASELLA WASTE MANAGEMENT, INC.
By
- ------------------------------- -----------------------------------
Name
- ------------------------------- -----------------------------------
Title
-----------------------------------
-6-
STATE OF VERMONT )
COUNTY OF CHITTENDEN ) ss
On this 30th day of June, 1994, before me personally appeared John Casella of
Casella Waste Management, Inc., to me known to be the person who executed the
foregoing instrument, and he(she) thereupon duly acknowledged to me that he(she)
executed the same to be his(her) free and act and deed.
-----------------------------------
Notary Public
Commission Expires
-----------------
STATE OF VERMONT )
COUNTY OF CHITTENDEN ) ss
On this 30th day of June, 1994, before me personally appeared Leonard Wing of CV
Landfill, Inc., to me known to be the person who executed the foregoing
instrument, and he(she) thereupon duly acknowledged to me that he(she) executed
the same to be his(her) free and act and deed.
-----------------------------------
Notary Public
Commission Expires
-----------------
-7-
EXHIBIT A
TO
LEASE, OPERATIONS & MAINTENANCE AGREEMENT
1986 Accurate Trailer 1A9754026F1037389
1985 Accurate Trailer 1A9754022F1037390
Power Wedge Model 750 HD Compactor
Diesel Generator
Compactor Stand
Pump
1983 Steco Refuse Trailer 1S9ESM2T9D1007260
1983 Steco Refuse Trailer 1S9ESM2T3D1007262
(Equipment is owned by Sunshine Leasing Corporation.)
-8-
RESTATED OPERATION, MANAGEMENT AND LEASE AGREEMENT
--------------------------------------------------
This Agreement ("Agreement") is made by and between CASELLA WASTE SYSTEMS,
INC., a foreign domestic corporation having its principal place of business at
Box 866, Rutland, Vermont 05702 ("Casella"), and CLINTON COUNTY, a New York
State Municipal Corporation, created under Article 9 of the New York State
Constitution, having a principal place of business at 137 Margaret Street,
County of Clinton, City of Plattsburgh, State of New York 12901 ("County").
WHEREAS, the County is the owner of certain facilities relative to the
collection and management of solid waste located within Clinton County, and
WHEREAS, the County did circulate a request for proposal (Exhibit "1") for
the operation, management or lease of those facilities, and
WHEREAS, the County has determined that the proposal submitted by Casella
best complies with the request for proposals and it is in the best interest of
the County to enter into a contract with Casella, and
WHEREAS, pursuant thereto the County and Casella did enter into an
Operation, Management and Lease Agreement on the 8th day of July, 1996, and
WHEREAS, the parties now desire to modify that Agreement to correct minor
errors in said Agreement and to conform the Agreement to newly discovered facts,
and
WHEREAS, said modifications are minor and more properly bring the Agreement
in conformity with the understandings of the parties.
NOW, THEREFORE, in consideration of the representations, warranties,
promises, covenants and agreements hereinafter contained and other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. DEFINITIONS
For the purpose of this Agreement the following words and phrases shall
have the following meanings:
1.01 "Acceptable Waste" - shall mean discarded putrescible and
non-putrescible waste including, without limitation, Special Waste, garbage,
refuse, trash, yard waste, C & D, and other discarded materials of the type
which are typically found in household, commercial or municipal refuse, whether
such materials are from residential, commercial, institutional, or industrial
sources, but shall not include Excluded Waste.
1.02 "Air Space" - means the existing or anticipated volume of Acceptable
Waste, that may be disposed in the Landfill, or any portion thereof.
1.03 "Annual Capacity" - shall mean the annual ability of the Lined
Landfill to accept at least 125,000 Tons of Acceptable Waste.
1.04 "Anticipated Capacities" - shall mean the anticipated capacity of the
Lined Landfill beyond Phase I, II, and III as set forth in Schedule "G", or as
it might be approved by the New York State Department of Environmental
Conservation.
1.05 "Approved Area" - shall mean the geographic area excluding that area
within the State of New York south of the County of Saratoga Springs.
Page 2 - September 5, 1996
1.06 "Base Rate" - shall mean the rate charged for Approved Waste generated
within the County per ton as a Tipping Fee for a particular year prior to
adjustment. The initial Base Rate shall be $54.75 per ton.
1.07 "Closing" - means the consummation of the transaction through the
exchange of closing documents as described herein.
1.08 "Closing Date" - means 60 days after the later of the execution of the
original contract pursuant to the request for proposal and the obtaining of the
necessary legislative and SEQRA approvals in order to proceed to closing, or
such other time or date as the parties mutually agree upon in writing. Casella
and the County shall use their best efforts to close this transaction on the
Closing Date.
1.09 "Closure" - shall mean those acts and activities required by New York
State Environmental Conservation Law and the regulations adopted thereunder
which result in a permanent cessation of use of a municipal landfill, as those
requirements and regulations may be amended or modified, and which result in a
stabilized municipal landfill which is not in active use excluding those acts
and activities which are required for Post-Closure Care including monitoring,
reporting and maintenance for the periods set forth in the relevant
environmental statutes and regulations, as they may be amended or shortened as
the case might be.
1.10 "Consent Order" - shall mean the consent order with amendment through
the 24th day of March, 1996, entered into between the County and the New York
State Department of Environmental Conservation together with any succeeding
Page 3 - September 5, 1996
amendments or modifications thereto related to the maintenance, existence and
operation of the Unlined Landfill, annexed hereto as Exhibit "2".
1.11 "Convenience Stations" - shall mean the existing convenience stations
utilized by the County being eleven (11) in number together with one (1)
transfer station all more particularly described in the schedule annexed as
Schedule "D". These convenience stations are utilized for the pick-up, receipt
and transportation of solid waste from residents of the County.
1.12 "CPI" - shall mean the Consumer Price Index for the region including
the City Of Plattsburgh as published by the United States Department of Labor
Bureau of Labor Statistics.
1.13 "Effective Date" - shall mean the date the original Agreement was
executed.
1.14 "Excluded Waste" - shall mean highly flammable substances, Hazardous
Waste, liquid wastes, certain pathological and biological wastes, explosives,
radioactive materials, oil, petroleum, municipal waste water sludge and
industrial sludge material, or any other waste excluded by an applicable
environmental law or regulation, or excluded by any of the terms and conditions
of any permits, licenses or approvals obtained with respect to the operation of
the Facilities. This term shall also include such other waste material which
Casella finds, in its sole discretion, to pose an unreasonable risk or danger to
the operation or safety of the Facilities or the environment.
Page 4 - September 5, 1996
1.15 "Facilities" - shall mean the Landfill, Personal Property, Convenience
Stations, Recycling Program presently operated, to be construed, utilized or
owned by the County in the handling of solid waste and recyclables, intended to
be all personal, real, and intangible property subject of this agreement.
1.16 "Force Majeure" - shall mean any act, event or condition affecting the
facilities or the parties to the extent that it materially and adversely affects
the ability of either party to perform or comply with any obligation, duty or
agreement required of the party under this Agreement, the Host Agreement or the
Labor Utilization Agreement, if such act, event, or condition is beyond the
reasonable control of a party or its agents relying thereon and is not the
result of the willful or negligent action, inaction or fault of the party
relying thereon. Including, without limitation: (a) an act of God, epidemic,
landslide, lightening, earthquake, fire, explosion, storm, flood or similar
occurrence; (b) an act of public enemy, war, blockage, insurrection, riot,
general arrest or restraint of government and people, civil disturbance or
disobedience, sabotage or similar occurrence, interference by third parties with
any solid waste disposal operations or any other duties of Casella, or the
County; (c) a strike, work slowdown, or similar industrial or labor action; (d)
an order or judgment (including, without limitation, a temporary restraining
order, temporary injunction, permanent injunction, or cease and desist order) or
other act of any federal, state, county or local court, administrative agency or
governmental office or body, including without limitation, such an order or
judgment which limits the duration of this Agreement to less than 25 years plus
extensions; (e) the denial, loss, suspension,
Page 5 - September 5, 1996
expiration, termination or failure of renewal of any permit, license or other
governmental approval required to operate the Facilities which does not result
from any negligent or willful act or omission of the party; (f) adoption or
change (including a change in interpretation or enforcement) of any federal,
state, county or local law, rule, permit, regulation or ordinance after the
effective date applicable to the parties or the Facilities, adversely affecting
any obligations hereunder, including, without limitation, such changes which
have an adverse effect on the cost of development, construction, operation or
maintenance of the Facilities; (g) the institution of a legal or administrative
action, or similar proceeding, by any person, firm, corporation, agency or other
entity which delays or prevents any aspect of the development or operation of
the Facilities, including, without limitation, comments on or challenges to the
consideration or issuance of any permit, license or other approval required to
construct or operate the Facilities; or (h) if Casella is for any reason (other
than any reason resulting from its negligent or willful act or omission) delayed
or barred by governmental or judicial action from collecting all or any part of
the fees to be paid under this Agreement, as may be from time to time adjusted,
and any other payments that may become due and owing.
1.17 "Hazardous Waste" - shall mean any pollutant, contaminant, chemical,
industrial, toxic or other waste that constitutes hazardous waste as defined
pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. ss. 9601 et.
seq, or the New York State Environmental Conservation Law, Article 27, ss.
27-1301(1), or the regulations adopted thereunder.
Page 6 - September 5, 1996
1.18 "Host Agreement" - shall mean the agreement intended to be executed
simultaneously herewith by and between Casella and the County and the Town of
Schuyler Falls relative to the obligations of Casella, the County, and the Town
of Schuyler Falls relative to the ongoing deposit of waste at the Landfill and
the fees paid therefrom and all more particularly described in said agreement,
annexed as Exhibit "4".
1.19 "Host Fee" - shall mean a payment paid to the County and the Town of
Schuyler Falls for solid waste disposed of or at the Landfill, partially in lieu
of all town, county and school taxes and more particularly described in the Host
Agreement.
1.20 "Identified Personal Property" - shall mean that Personal Property
that has been specifically identified on Schedule M.
1.21 "Labor Adjustment" - shall mean an adjustment to the Tipping Fee made
by virtue of the provisions of the Labor Utilization Agreement.
1.22 "Labor Agreement" - shall mean the agreement by and between the County
and the CSEA relative to the employees of the County effected by this Agreement
and annexed hereto as Exhibit "5".
1.23 "Landfill" - means all of the County's assets and properties used or
held for use by the County in connection with the Clinton County Landfill,
including land, buildings, appurtenances, office furniture, equipment and
fixtures, the full benefit of all utility arrangements, licenses and permits,
including rights of assignment to the
Page 7 - September 5, 1996
extent any such licenses and permits may be assignable and all other rights,
assets and interests all as used in connection with the Clinton County Landfill.
1.24 "Lease Payments" - shall mean the consideration that Casella will pay
the County for the lease of the Facilities, exclusive of the Unlined Landfill
which is subject to the operating portion of this Agreement and not the lease.
1.25 "Lined Landfill" - shall mean that portion of the Landfill, excluding
the Unlined Landfill, which includes existing partially constructed lined
capacity and projected lined Air Space capacity of approximately 1.804 million
cubic yards and the Anticipated Capacities, all encompassing 160 acres together
with the full benefit of all utility arrangements, licenses and permits, to the
extent any such licenses and permits may be assignable and all other rights,
assets and interests all as used in connection with the Lined Landfill more
particularly described in Schedule "B".
1.26 "Option Payment" - shall mean the payment to be made to the County in
the event that this Agreement is extended for a term of 25 years which payment
shall be in the amount of $1,000,000.00 (One Million).
1.27 "Personal Property" - means all of the personal property used or held
for use by the County in connection with the operation of the Landfill,
Recycling Program and the Convenience Stations together with certain delineated
equipment related thereto, exclusive of real property. The Personal Property is
intended to be all personal property and interests related thereto subject of
this Agreement including the Identified Personal Property and is more
particularly described in Schedule "E" annexed hereto, excluding, however, the
following: water truck, County radio
Page 8 - September 5, 1996
communication system, messenger pick up truck and four personal computers with
printers, all which shall be retained by the County. (See Schedule N).
1.28 "Phase I" - shall mean that portion of the Lined Landfill which is
partially constructed and consists of 6.1 acres containing 3 lined cells having
a total Air Space capacity of approximately 521,000 cubic yards.
1.29 "Phase II" - shall mean that portion of the Lined Landfill which is
intended to be constructed second and consists of 6.4 acres containing 2 lined
cells having a total Air Space capacity of approximately 547,000 cubic yards.
1.30 "Phase III" - shall mean that portion of the Lined Landfill which is
intended to be constructed third and consists of 9.2 acres containing 3 lined
cells having a total Air Space capacity of approximately 735,000 cubic yards.
1.31 "Post Closure Care" - shall include those acts and activities which
are required for post-closure care including monitoring, reporting and
maintenance for the time set forth in the relevant environmental statutes and
regulations, as they may be amended or shortened as the case might be.
1.32 "Property" - shall mean any parcels of real property located in the
County on which the Facilities are located, exclusive of the Unlined Landfill,
more particularly described in the annexed Schedule "F".
1.33 "Recycling Payment" - shall mean payments due to the County from
Casella through the operation of the Recycling Program.
1.34 "Recycling Program" - shall mean all of the equipment and buildings
associated with the County's existing recycling program more particularly
described
Page 9 - September 5, 1996
in the schedule annexed as Schedule "C", together with the program as it may be
amended.
1.35 "Special Waste" - shall mean any discarded waste material other than
those which are typically found in household, commercial or municipal refuse,
including, without limitation, materials such as industrial waste, institutional
waste, animal manure, petroleum contaminated soil of a nonhazardous nature,
residue from incineration, food processing wastes, dredging wastes, tires and
asbestos, or waste which requires special or exceptional handling or approval
from DEC, but shall not include Excluded Waste.
1.36 "Tipping Fee" - shall mean the tipping fees established for the
disposal of a single Ton of Acceptable Waste at the Facilities paid to, and
retained by Casella, in accordance with paragraph 10 herein.
1.37 "Ton(s)" - shall mean 2000 pounds.
1.38 "Unlined Landfill" - means that portion of the Clinton County Landfill
which has been operated by the County as an unlined landfill which consists of
the areas within the Landfill that is utilized as an unlined landfill plus an
additional 100 foot buffer zone and which is intended to be subject to the
operating provisions of this Agreement together with the full benefit of all
utility arrangements, licenses and permits, and all other rights, assets and
interests all as used in connection with the Unlined Landfill more particularly
described in Schedule "A".
1.39 "Labor Utilization Agreement" - shall mean the agreement intended to
be executed simultaneously herewith by and between Casella and the County
relative
Page 10 - September 5, 1996
to the utilization of labor at the Facilities and adjustments made thereto and
all more particularly described in said agreement, annexed as Exhibit "3".
2. LEASE PAYMENT
The County hereby leases to Casella the Facilities, excluding the Unlined
Landfill, to Casella for a term of twenty-five (25) years commencing on the
Closing Date on the terms and conditions as more fully set forth as follows:
Casella shall pay to the County the sum of $10,501,284.00 (Ten million,
five hundred and one thousand, two hundred and eighty four), payable in
accordance with Schedule "H", for a period of seven (7) years from the date of
the first payment for a total of 28 payments. The obligation of Casella to make
Lease Payments shall be suspended on July 1, 1997 in the event that the County
has failed to complete construction of Phase I and has not supplied Casella with
all necessary permits and authorities for Casella to operate Phase I at the
Annual Capacity by that date. Casella shall resume Lease Payments in accordance
with the schedule above referenced after construction has been completed and all
permits and authorities have been supplied, provided, however, that Casella
shall have no obligation to remit, without effecting the total amount due, any
payments that would have been due during the suspension period.
3. HOST FEE
Casella will pay the sum of $2.50 for each ton of Acceptable Waste disposed
of at the Landfill. Payment shall be made to the parties to the Host Agreement
at the
Page 11 - September 5, 1996
same time, same manner and subject to the adjustments as specified in the Host
Agreement.
4. PURCHASE OPTION
Casella may, during the term of this Agreement or any renewals hereof,
elect to purchase the Lined Landfill, Personal Property, Recycling Program,
Property and Convenience Stations subject to the necessary County approval of
the same. In the event, that the County approves such purchase option, the Lease
Payments, upon the closing of title, shall cease and there shall be an
acceleration of the unpaid Lease Payments and the County shall be paid at
closing a purchase price equal to the unpaid Lease Payments calculated by
referring to the annexed Schedule "H". In the event that the purchase option is
exercised and approved after all Lease Payments have been made, and only in that
event, the purchase price shall be equal to a sum equal to the last two years
Recycling Payment which sum shall represent an acceleration of monies due for
the succeeding two years of this Agreement following sale, for which Casella
shall be given credit against future monies due. No Recycling Payment shall be
due from Casella for the following two (2) years following the closing of the
purchase. There shall be an adjustment made with respect to the credit for the
amount paid to the County versus the actual amount due the County for the two
year period for which acceleration has been made. Casella shall at the
conclusion of the two years remit to the County any additional sums that might
be due based on the actual Recycling Payment or, should money be due Casella,
Casella shall be entitled to a credit against the third year or years for the
amount overpaid.
Page 12 - September 5, 1996
A. PROPERTY
The Property to be conveyed to Casella shall be conveyed by Bargain and
Sale Deed with covenants and in proper statutory form for recording, being
clear of all liens and encumbrances, subject, however, to the following:
1. Provisions of existing building, zoning land use, subdivision and
environmental laws and regulations whether imposed by federal, state
or municipal or other governmental units or authority;
2. Rights of the public and others in respect to streets and ways
abutting and laying within or between parcels.
3. All rights of way, plans, easements, conditions, restrictions,
covenants, liens or claims of record.
B. PERMITS
All permits for the utilization of the Facilities as may be required, which
allow use of the Facilities in the manner and at the capacities set forth
herein, shall be transferred to Casella by the County to the extent
permitted by applicable law and shall be a condition of closing.
C. PERSONAL PROPERTY
All Personal Property shall be transferred free and clear of all liens and
encumbrances in "as is" condition. In the event that specific personal
property has been substituted, in accordance with the procedures set forth
in paragraph 5 herein, such substituted or upgraded personal
Page 13 - September 5, 1996
property shall be transferred provided, however, that no additional
payments shall be required from Casella.
D. OBLIGATION TO PURCHASE
Casella's obligation to close the purchase under this Agreement is
conditioned upon the following:
1. The issuance to Casella prior to closing, of those permits or licenses
as may be required in Casella's sole opinion to operate the Landfill
at the capacities set forth herein; or
2. The receipt prior to closing of preliminary authorization, to
Casella's satisfaction, by all governmental authorities having
jurisdiction to permit Casella to operate in the matter desired; and
3. The receipt from Casella of those assurances that might be necessary
in the discretion of Casella's counsel, which would allow Casella's
counsel to issue an opinion letter to Casella that there is no state
of facts which would impair, restrain or prohibit the consummation of
the transactions contemplated hereby or which might, in Casella's
counsel's reasonable judgment, materially impair value; and
4. Receipt by Casella of the necessary Bills of Sale, Assignments, Deeds,
and other instruments of transfer, conveyance, and assignment in
accordance with the provisions hereof, transferring
Page 14 - September 5, 1996
to Casella all of the County's right, title and interest in the
Facilities other than the Unlined Landfill, free and clear of all
mortgages, liens, encumbrances, pledges, equities, claims and
obligations to other persons or parties, of whatever kind and
character and allowing, to the extent applicable, the issuance by a
New York state title insurance company title, insurance guaranteeing
marketable title.
E. NONMERGER
The closing of the purchase shall only result in a merger of those
provisions of this Agreement which are relevant to the transfer, and shall
not work a termination of this Agreement beyond that necessary for the
closing, termination of the lease, and transfer of ownership.
5. PERSONAL PROPERTY
The Lease Payment shall include payments for the utilization of the
Personal Property by Casella. Casella may utilize the Identified Personal
Property at the Facilities or such other location as Casella in its sole
discretion deems appropriate, provided, however, that if any of the Identified
Personal Property are utilized in a location other than the Facilities, Casella
shall promptly notify the County of the location of the Identified Personal
Property. Casella may utilize the balance of the Personal Property at any of the
Facilities in its sole discretion as it deems appropriate. Although it is the
intent of the parties that the Personal Property, other than the
Page 15 - September 5, 1996
Identified Personal Property, be used for the purposes covered by this
Agreement, Casella may use the Personal Property, other than the Identified
Personal Property, outside of Clinton County for purposes outside the scope of
the Agreement with the consent of the County, which consent may not be
unreasonably withheld. Title to the Personal Property shall remain with the
County, subject, however, to the provisions herein, absent a closing under the
purchase option at which time the title to the Personal Property will be
transferred to Casella.
It is agreed by the County and Casella that the Personal Property have a
useful life based on the date of purchase of the particular personal property.
The agreed upon useful life of each personal property is set forth in Schedule
"I". In consideration for the maintenance of the Personal Property by Casella
for the balance of the term of its useful life, the County agrees that upon the
end of the agreed upon useful life for each of the personal property, the County
will abandon its interest in the particular personal property to Casella for
payment by Casella equal to the scrap value of the particular personal property
which the parties agree shall be 1% of the value of the Personal Property as set
forth in Schedule "J".
Casella may at any time during the useful life of a personal property,
request that the County upgrade or replace the personal property in order to
ensure a more efficient operation of the Landfill, the Recycling Program, or the
Convenience Stations. In the event Casella so requests the County, the County
shall, in accordance with public acquisition requirements, acquire replacement
equipment in accordance with the specifications submitted by Casella. The
personal property for which the
Page 16 - September 5, 1996
upgrade is sought shall be declared surplus by the County and shall be sold or
traded in accordance with the procedures set forth in law and the sum realized
from said sale shall be utilized, in whole or in part, to pay for the newly
acquired personal property. In the event there is a shortfall between the monies
realized from the auction sale and the acquisition price of the newly acquired
personal property, Casella shall, after receiving delivery of the replacement
personal property, remit to the County on the next Payment Date, as an
additional Lease Payment the difference between the realized auction price and
the acquisition price for the newly acquired personal property. In the event of
an early termination of this agreement, the proportionate useful life remaining
of the newly acquired equipment shall be multiplied times the amount paid by
Casella which shall be a credit to Casella. This payment by Casella shall be
considered in full satisfaction of that portion of Casella's lease obligations
under this Agreement for the newly acquired personal property, and the newly
acquired personal property shall be added to this Agreement and to the schedules
contained on Schedules "E" and "J", a useful life shall be established and added
to Schedule "I", and thereafter the personal property shall be subject to the
terms of this Agreement.
Alternatively, Casella may also at any time decide that a personal property
is surplus and not necessary to the operations of the Landfill. In the event
that Casella makes such determination, it shall inform the County in writing and
within thirty (30) days the County will advise Casella whether the County agrees
with that determination. In the event that the County so agrees, the personal
property shall be
Page 17 - September 5, 1996
auctioned off by the County pursuant to the procedures previously set forth, and
the amount realized at said auction shall be credited to Casella against any
payments due the County under this Agreement. In the event that the County
disagrees with Casella's determination that the personal property is surplus,
the County shall, within the time specified, inform Casella and shall assume
control of the personal property. Casella and the County shall thereafter
mutually select an appraiser, or in the event that mutual agreement cannot be
had, each shall mutually select an appraiser which appraisers shall select a
third appraiser, and an appraisal of the personal property shall be made.
Casella shall be entitled to a credit against any payment under this Agreement
for the value of the personal property determined by the above-referenced
procedures. The personal property declared surplus shall be deleted from
Schedules "E", "I" and "J" and shall no longer be subject to the terms of this
Agreement.
6. ALLOCATIONS
The payments under this Agreement shall be allocated as follows:
(i) Long-term real estate lease 63%.
(ii) Good will 17%.
(iii) Equipment 20%.
In the event that a closing should take place pursuant to the Purchase
Option contained herein, the above percentages shall be utilized provided,
however, that in the event, prior to the closing that payments have been
adjusted by reason of
Page 18 - September 5, 1996
personal property having been declared surplus, a percentage adjustment shall be
made to reflect that event.
7. RECYCLING PROGRAM
Casella shall operate at the County's existing sites a recycling program,
which shall be generally modeled after its existing program in the State of
Vermont, for material generated from the existing convenience stations servicing
County residents. It is intended that the recycling program be comprehensive to
the extent economically feasible. Casella shall be responsible for the marketing
of all the recycled material and retain the recycling revenue as an offset of
its operational costs associated therewith.
8. RECYCLING REVENUE
With respect to the material generated through the recycling program, the
County Legislature shall set, by either local law or resolution, the "per bag"
disposal rates at the convenience stations. The present disposal rate is $1.00
per 15 gallon bag. Based on that rate, Casella agrees to pay to the County the
Recycling Payment in the sum of $50,000 per year, payable on January 15th of the
succeeding year, with the first year to be apportioned. Subject to, and
conditioned on, legislative approval, the County agrees to increase the disposal
rate to $1.25 per bag for the period April 1, 1997 though March 31, 1998 and
$1.50 for the period April 1, 1998 through March 31, 1999. Based on, and subject
to, those timely enactments, Casella agrees to pay the County the Recycling
Payment in the manner set forth herein as follows:
$1.25 per 15 gallon bag $125,000.00 per year
$1.50 per 15 gallon bag $200,000.00 per year
Page 19 - September 5, 1996
After April 1, 1999 Casella shall be entitled to set the per bag rate at an
amount per convenience station which, on an annual basis, will equal the
previous year's costs for operating the convenience station plus the then
present cost of disposal including transportation, but in no event less than
$1.50 per bag. The County will, subject to legislative approval, enact whatever
local legislation is necessary to effectuate the rates. In the event that the
County fails to set a rate, as above referenced, which covers Casella's costs,
the disposal costs, and the cost of marketing the recyclables then, in that
event, Casella shall have a right to close the convenience station.
9. CONVENIENCE STATIONS
The Lease Payments hereunder encompass payment for the Convenience Stations
containing the real and personal property delineated on Schedule "D". Until
April 1, 1999 Casella shall be responsible for operating the convenience
stations at the same approximate level as is presently operated by the County.
Casella, after April 1, 1999 may modify the hours of operation of the
convenience stations in its sole discretion, provided, however, that the total
hours of operation for all the convenience stations, in total, shall not be
reduced to less than 80% of the existing total operational hours, subject,
however, to the provisions of paragraph 8 above which allows Casella to
terminate certain operations, which terminations, if any, shall not be factored
in the percentage of service required under this paragraph. The parties
recognize that certain Convenience Stations are not on County property. The
County agrees to hold harmless and indemnify Casella from any loss, claim or
expense associated with a third-party assertion of contrary or superior rights.
Casella
Page 20 - September 5, 1996
shall have the option, in the event that the County is not able to obtain legal
or leasehold title in a reasonable period of time to close these Convenience
Stations which shall not be included for purposes of the percentage calculations
noted above. Casella shall collect at the convenience stations such bags as may
be left by County residents and shall charge the specified rate per bag as is
either set forth pursuant to this Agreement or may be set by the County. Casella
shall keep accurate and complete records, subject to audit, of bags collected
and monies collected. Its records shall be available for County inspection upon
reasonable notice.
10. TIPPING FEE
The Tipping Fee for Acceptable Waste accepted for disposal at the Landfill
generated by the County, its residents or private haulers, shall be the Base
Rate for a period of 10 years from the date of this Agreement, plus adjustments.
The initial Base Rate shall be $54.75. Adjustments, during this 10 year period,
shall be made in the Base Rate in the event the CPI increases any calendar year
in excess of five (5%) percent. In the event the CPI increases beyond five (5%)
percent for a calendar year, the amount of said increase above five (5%) percent
shall be multiplied times the previous year's Base Rate and then added to it,
which shall then become the new Base Rate for the calendar year commencing on
that following January 1.
The Tipping Fee for each year of the second ten years, shall be calculated
by taking the Base Rate for the previous year and making an annual adjustment of
seventy-five (75%) percent of the CPI increase for the previous year multiplied
times
Page 21 - September 5, 1996
the previous Base Rate, which shall be added to the previous Base Rate, and
become the new Base Rate for the calendar year commencing on the following
January 1.
The Tipping Fee for each year of the last five years of the original term
of this Agreement, shall be calculated by taking the Base Rate for the previous
year and making an annual adjustment of one hundred (100%) percent of the CPI
increase for the previous year multiplied times the previous Base Rate, which
shall be added to the previous Base Rate, and become the new Base Rate for the
calendar year commencing on the following January 1.
The Tipping Fee shall not be governed by the terms of this Agreement, or as
it might be extended, after the expiration of twenty (25) years from the
Effective Date.
In addition, there shall be the Labor Adjustment to the Base Rate as
required by the provisions of the Labor Utilization Agreement.
11. OPERATING AGREEMENT/UNLINED LANDFILL
Casella and the County agree that from and after the Effective Date,
Casella shall operate for the County, and shall have full physical and
managerial control subject to the Labor Utilization Agreement, of the Unlined
Landfill, which Unlined Landfill shall not be subject to lease. The operation of
the Unlined Landfill shall, in addition to what is hereinafter set forth, be
subject to the same provisions as the Lined Landfill as set forth in
subparagraphs 13 (A)(1)(c); (B); (D)(2), (5), (6), (7); (E); (F); and (G);
herein.
Page 22 - September 5, 1996
A. Indemnification
The County agrees to hold and save harmless Casella from any damage or
claim resulting from the disposal of solid waste of any sort arising prior to
Casella's assuming operational control of the Unlined Landfill, whether such
liability arises by the operation of law or out of a wrongful act or neglect of
the County or otherwise. In the event that Casella shall sustain damage or be
forced to defend a lawsuit or claim, the County shall hold harmless and
indemnify Casella to the extent of any losses, costs or liabilities incurred,
including without limitation, fines, penalties, disbursements or attorney fees.
B. Permit
The County warrants and covenants that the Unlined Landfill has all
necessary permits and Air Space to accept additional Acceptable Waste from
outside of Clinton County in the amount of 60,000 Tons. The County further
warrants and covenants that as of the date Casella assumed operational control
of the Unlined Landfill, there was an usable Air Space capacity of 120,000 Tons.
The County warrants and covenants that such Air Space shall be available for the
disposal of Acceptable Waste by Casella and that the Unlined Landfill will be
able to utilize that Air Space, continuously, until at least June 15, 1997.
Based on these covenants, Casella covenants to reserve 60,000 Tons of Air Space
for use for County generated Acceptable Waste. The County shall retain
responsibility for permitting, closure design, and related inspection services
at its sole cost for the closure of the Unlined Landfill.
Page 23 - September 5, 1996
C. Closure
Casella agrees, upon exhaustion of the Air Space of the Unlined
Landfill as set forth above, to perform Closure of that landfill in accordance
with the regulations of the New York State Department of Environmental
Conservation and the consent order entered into by the County (Exhibit "2") at
its sole cost subject to the responsibilities of the County described in
subparagraphs "I", "J" and "K" below. Casella's obligation to perform the
Closure is subject to the following condition precedents:
1. the availability of Air Space set forth in subparagraph 11 (B)
above, both as to general capacity and as to the availability for
out of county waste; and
2. the granting of permits and authorities, as well as the
completion of construction, for the operation and leasing of the
Lined Landfill by Casella; and
3. the ability of Casella to utilize the Unlined Landfill's
specified Air Space, continuously, until at least June 15, 1997;
and
4. the repeal of the local laws, etc, set forth in subparagraph
11(E) below.
In the event the above referenced condition precedents are not satisfied in
full, Casella shall have no obligation to conduct Closure, which responsibility
shall be that of the County. Casella's sole obligation shall be to remit to the
County an amount equal to $15.00 per ton for each Ton of Acceptable Waste
accepted at the Unlined
Page 24 - September 5, 1996
Landfill, subject to any reduction for removed Excluded Waste, which monies
shall be the limit of Casella's obligation as to Closure, which sum shall be
further adjusted to credit Casella for Lease Payments already made.
D. Acceptable Waste
Casella agrees that during the term of its operation it shall only
accept at the Unlined Landfill Acceptable Waste. Casella shall keep records of
all transporters bringing waste into the Unlined Landfill, the date the waste
was brought in and Casella shall further visually inspect the waste to ensure
that it is acceptable and in accordance with the Consent Order. The County shall
have the right to visually inspect all waste as it is brought in to the
Facility. Casella shall cooperate with the County to encourage the County to
exercise that right. Whether the County exercises that right or elects not to
exercise that right, it shall be presumed, absent substantial evidence to the
contrary, that in the event Excluded Waste was deposited, it was done during the
County's control of the Unlined Landfill, thus, subjecting the County to the
provisions of subparagraph "A" above.
E. Waste Control Ordinances or Local Laws
The County has enacted certain ordinances, previous to this date,
which restricts or limits the flow of waste to the Unlined Landfill. The County
agrees, subject to legislative approval and the limitations of law, within
forty-five (45) days to repeal such ordinances or local laws. The County further
agrees to apply and seek for lead agency status under SEQRA relative to the
lease of the Lined Landfill. Nothing herein shall require the Town of Schuyler
Falls or the County to repeal their
Page 25 - September 5, 1996
local ordinances prohibiting the placement of municipal waste water sludge or
industrial sludge.
F. Subdivision
The County agrees to subdivide the Landfill so that the Unlined
Landfill and Lined Landfill are on approved separated parcels of property. The
cost of the survey shall be that of Casella. It is intended that subdivision
shall occur prior to the commencement of operation of the Lined Landfill.
G. Ownership
Ownership of the Unlined Landfill shall remain at all times with the
County. In the event that the purchase option is elected by Casella and approved
by the County, ownership of the Unlined Landfill shall not be transferred
pursuant to that Purchase Option, but shall remain with the County.
H. In Ground Separation Costs
There is presently emanating from the Unlined Landfill certain ground
water contamination which will require the creation of an impervious in ground
separation wall and ancillary construction to contain the migration. Costs
associated with such in ground separation construction shall be that of the
County and shall not be considered a closure cost. The costs, however, will be
advanced by Casella and the construction shall be done by Casella ancillary to
the Closure. In the event that Casella receives a permit by the New York State
Department of Environmental Conservation together with all local approvals for
Phase II and III at their Anticipated Capacities and Annual Capacity within five
(5) years of the date of this Agreement,
Page 26 - September 5, 1996
and in the event that the County has cooperated with Casella in the obtaining of
such approvals then, in that event, Casella agrees to absorb the cost of the in
ground separation construction that was performed at or about the time of
Closure. In the event that Phase II and III approvals are not received within
the time specified or the County has failed to cooperate in obtaining those
Phase II and III approvals, the costs of the in ground separation system shall
be a credit to Casella which may be utilized against future payments due the
County under the terms of this Agreement or shall be paid by the County should
no monies be due. Payment or credit shall be immediately due, or credit applied,
in the event of an early termination of this Agreement. In the event there is a
dispute as to the size of the credit, the fair market value of the services
performed plus interest from the date of completion, which shall be the value of
the credit, shall be determined by taking the average of three arms lengths
appraisals from experienced, reputable firms solicited pursuant to public notice
with the cost of the appraisals to be equally shared by the parties.
I. Post Closure Care
The County is responsible for Post Closure Care of the Unlined
Landfill. The County may, by separate agreement, contract with Casella for this
service. In the event the County chooses to so contract for the Unlined Landfill
or for its existing landfills in Mooers and Ausable, Casella agrees to charge
the County its own actual direct costs for this service plus a percentage of 5%
representing Casella's indirect costs.
Page 27 - September 5, 1996
J. County Closure Responsibilities
The County shall be responsible for the following, which in no event
shall be Casella's responsibility:
1) Permitting and all issues and costs related thereto; and
2) Closure design and all issues and costs related thereto; and
3) Inspection and testing services, whether surface or subsurface,
and all issued and costs related thereto.
K. Personal Property
Casella shall have the right to use all necessary Personal Property
for the operation of the Unlined Landfill, and shall have responsibility to
maintain the same. Nothing herein shall limit the right of Casella to use its
own personal property at the Unlined Landfill, which right shall be
unrestricted.
L. Use and Compliance With Law
The Unlined Landfill shall be kept by Casella in substantial order and
repair outside and inside at its sole cost and expense, other than for
pre-existing conditions, and Casella shall comply with all orders, regulations,
rules and requirements of every kind and nature, now and hereinafter in effect,
of the federal, state, municipal or other governmental authorities having the
power to enact, adopt, impose or require the same whether they be usual or
unusual, ordinary or extraordinary or whether they or any of them relate to
environmental requirements or otherwise, provided they are related to Casella's
operations, and Casella shall pay all costs and expenses incidental to such
compliance and shall indemnify and hold
Page 28 - September 5, 1996
harmless the County from all expense and damages by reason of any notices,
orders, violations or penalties filed against or imposed upon the Unlined
Landfill or against the County as owner thereof because of the failure of
Casella to comply with this covenant provided, however, that nothing herein
shall effect or limit the responsibility of the County relative to the Unlined
Landfill as to pre-existing conditions.
Casella shall have the right, at its own cost and expense, to contest or
review by legal proceedings the validity or legality of any law, order,
ordinance, rule, regulation, direction, or certificate of occupancy and during
such contest Casella may refrain from complying therewith provided that Casella
will not be subjected to criminal prosecution thereby and, that if requested to
do by the County, Casella shall furnish to the County a bond in form and amount
reasonably satisfactory to the County guaranteeing to the County compliance by
Casella such law, order, ordinance, rule or regulation, if required.
12. COOPERATION
It is the intention of the parties that the Lined Landfill be permitted to
the capacity set forth for Phases I, II and III and the Anticipated Capacities.
It shall be the responsibility of the County, within twelve (12) months from the
date of this Agreement, to obtain all permissions and approvals that might be
necessary from local governmental entities or bodies which have legal
jurisdiction over the Lined Landfill including, but without limitation, zoning
approval and the granting of any special permits that might be necessary, until
no further approvals or permissions are
Page 29 - September 5, 1996
necessary from any local governmental agency or body, in order that Phase I, II
and III may proceed for use as a municipal landfill at the specified capacities,
Annual Capacity and, to the extent possible, the Anticipated Capacities.
Casella shall cooperate with the County in obtaining these approvals.
Obtaining local approvals shall be the County's responsibility and obligation.
The County shall, other than for Phase I which shall be totally the
County's responsibility, cooperate with Casella in obtaining regulatory approval
for the Lined Landfill at the capacity specified herein and shall undertake all
reasonable steps to accomplish the same provided, however, that it shall be
Casella's responsibility to prepare the permit application, conduct geologic and
engineering studies, and to pay any consultants that might be necessary in
relation to the same. The County shall execute at Casella's request, all
documents consistent with the purposes of this Restated Operation, Management
and Lease Agreement, and will further undertake to the extent not violative of
law any steps requiring local legislation or resolution in order to obtain
contemplated approvals.
The County hereby appoints Casella as its agent or, alternatively, grants
Casella a limited power of attorney (to the extent permissible by law) to file
documents, execute documents, submit permit applications, consult with the New
York State Department of Environmental Conservation, represent the County in
front of the Department of Environmental Conservation, represent the County at
any public hearings that might be necessary relative to the obtaining of the
requisite environmental and ancillary permits that might be necessary for
approval of Phase II,
Page 30 - September 5, 1996
III, the Anticipated Capacities and the Annual Capacity, or for any further
proceedings that might be necessary for Phase I.
Nothing herein shall affect, however, the obligation of the County to
obtain approvals and complete construction of Phase I at its sole cost and
expense.
13. LINED LANDFILL
A. Exclusive Use
The County hereby grants Casella an exclusive lease, franchise,
license and privilege to build, operate and utilize a solid waste landfill at
the Lined Landfill including, but not limited to:
(1) The right to take possession of, occupy and have exclusive use of
all Facilities, other than the Unlined Landfill which shall be
governed by paragraph 11:
(a) The right to take possession, and use all Property, Personal
Property, Recycling Program, all building and fixtures which
are used at and located at the Lined Landfill. Nothing
herein shall limit the right of Casella to use its own
personal property, which right shall be unrestricted.
(b) Exclusive franchise, license and privilege to operate and
dispose of Acceptable Waste at the Lined Landfill;
(c) The use of permits in the County's name. The County agrees
to obtain and maintain in the County's name all permits and
registrations requested by Casella or to
Page 31 - September 5, 1996
transfer them into Casella's name at Casella's option if
permitted by law and to assist with all federal, state and
local agencies to obtain the issuance, modification and
amendment of all permits requested by Casella and otherwise
assist Casella in obtaining and maintaining such permits
during the term of this Agreement. The parties agree to use
good faith and due diligence in obtaining permits and any
modifications or amendments thereto.
(d) The covenant of non-competition. The County shall not during
the term of this Agreement or any extension thereof, to the
extent not violative of law, grant any other person or
entity any license, permit, franchise or right to recycle,
transfer or dispose of any waste within the County's
jurisdiction. The County further agrees not to compete with
Casella relative to the recycling, handling or disposal of
waste during the term of this Agreement (or Host Agreement)
or any extensions thereto.
B. Waste
(1) Approved Area
Casella shall have the right to recycle or dispose of Acceptable
Waste generated outside Clinton County provided the origin of the
waste is from the Approved Area. Acceptable County Waste,
Page 32 - September 5, 1996
in case of conflict, shall have priority over Acceptable Waste
originating outside Clinton County. Casella shall use best
efforts and good faith in complying with this restriction
provided, however, that Casella shall not be liable for the
removal of any such waste or damage sustained by the County so
long as Casella has operated in good faith.
(2) Transportation
Casella shall not be responsible for the transportation or
delivery of waste by or on behalf of the residents of Clinton
County. Casella shall also not be responsible for the
transportation or redelivery of any waste including, without
limitation, Excluded Waste that was improperly delivered and
subject to and in accordance with the terms of this Agreement.
Casella shall, however, be responsible for the transportation of
waste from the Convenience Stations once waste is received there.
(3) Acceptable Waste.
Casella agrees to accept only Acceptable Waste at the Lined
Landfill. Casella shall be responsible for the removal of
Excluded Waste, which provision shall not limit Casella's right
of recourse against the transporter or generator of the Excluded
Waste.
Page 33 - September 5, 1996
(4) Tonnage
Casella agrees to limit the annual tonnage of Acceptable Waste
received at the Lined Landfill to 125,000 Tons unless a higher
limit is authorized in writing by the County.
C. Construction
Casella agrees to finance and construct expansions of the Lined
Landfill to the extent permissible, pursuant to market forces and demand,
consisting of Phase II, III, and the Anticipated Capacities. Casella guarantees
that the design and construction of the expansions will meet or exceed any and
all state requirements pertaining to municipal solid waste landfills in New York
State.
Casella shall have the right to construct at the Lined Landfill such
buildings or fixed resources as it deems necessary for the operation of the
Lined Landfill including, but not limited to, recycling facilities, garages and
other construction in Casella's sole option.
D. Operation
(1) Casella shall have full control, both physical and managerial,
subject to the Labor Utilization Agreement, of the Facilities,
exclusive of the Unlined Landfill, from the Closing Date, subject
only to the express limitations of the Agreement.
(2) Casella shall be responsible for the day-to-day operation of the
Lined Landfill, including weighing waste, testing waste for
nature and consistency, preparation of waste for disposal, cell
Page 34 - September 5, 1996
construction, disposal of waste, preparing and applying daily
interim and final cover, construction of temporary roads and
other temporary access, installation and monitoring of ground
water wells, maintenance and operation of a leachate collection
system, and disposal of leachate.
(3) Casella shall be responsible for providing and maintaining all
necessary facilities for the receiving and handling of waste to
be disposed of at the Lined Landfill.
(4) Casella shall be responsible for providing:
(a) All engineering services necessary for the design,
construction and operation of the Lined Landfill (other than
Phase I).
(b) The maintenance of office facilities on the premises.
(c) The maintenance of all Personal Property necessary to
operate the Lined Landfill.
(d) The employment of all necessary personnel to operate the
Lined Landfill (subject, however, to the provisions of the
Labor Utilization Agreement).
(e) All services incidental to the business of operating the
Lined Landfill, including security, accounting, legal, fire
prevention and pollution control.
(5) Casella shall reject for disposal all Excluded Waste.
Page 35 - September 5, 1996
(6) Casella shall have the right to detain and inspect the contents
of all vehicles which are delivering waste to the Lined Landfill
to ensure that Excluded Waste is not being delivered to the Lined
Landfill. Casella shall have the right to refuse or reject such
Excluded Waste in its sole discretion or, if not detected prior
to entering the Lined Landfill, Casella shall have the right to
remove the Excluded Waste and ensure its proper disposal, all at
the hauler's expense. Casella shall have the right to ban haulers
from disposing at the Lined Landfill until such time as the
expenses for reimbursement for the removal of the Excluded Waste
are paid to Casella. Casella shall have the right to ban any and
all haulers who violate the rules governing the Lined Landfill
after consultation with the County and subject to the County's
consent, which consent shall not be unreasonably withheld.
(7) All revenue and income generated by or at the Facilities shall be
collected by Casella and shall be the property of Casella.
(8) Casella shall be responsible for Closure and Post Closure Care of
Phase I, Phase II, Phase III, and the Anticipated Capacities,
provided that such Phases were exhausted during the term of this
Agreement. Other than on account of a default by the County,
should this Agreement be terminated prior to the exhaustion of
the capacity of a particular Phase, Casella shall be responsible
for
Page 36 - September 5, 1996
a proportionate share of the Closure and Post Closure Care costs
based on the percentage of capacity Casella filled of that
particular Phase.
E. Weighing
Casella shall weigh all vehicles containing waste to be delivered to
the Lined Landfill pursuant to this Agreement. Casella shall utilize scales
approved by the State of New York to weigh all waste delivered to the Lined
Landfill. Casella shall have the right to impose additional charges beyond the
Tipping Fee for Special Waste based on volume unit, weight or characteristics.
The County or its authorized representative shall have the right at the County's
sole expense to test the accuracy of scales located at the Lined Landfill,
provided that these tests are conducted at reasonable times and do not
unreasonably interfere with the orderly operation of the Lined Landfill.
F. Hours of Operation
Casella shall have the right to operate the landfill at hours of its
choosing from 7:00 A.M. to 6 P.M., Monday through Saturday.
G. Inspection
The County shall have the right to inspect the Lined Landfill during
reasonable business hours in order to ensure that the provisions of this
Agreement are being complied with, that Acceptable Waste is being received at
the Landfill, and that the Landfill is being operated in conformity with New
York State and United States environmental laws.
Page 37 - September 5, 1996
Casella agrees to reimburse the County for the salary of one deputy
sheriff for the time the deputy sheriff spends in performing such inspections or
oversight, the reimbursement to be determined by taking the deputy sheriff's
normal and customary pay, absent overtime and paying the proportion of time that
said deputy sheriff expends at the Landfill provided, however, that Casella
shall not be responsible for more than the annual salary of said deputy sheriff.
H. Development of Phase I
The parties acknowledge and agree that the County has a permit to
operate and construct Phase I of the Lined Landfill. The construction and
granting of operational permits for Phase I shall be the responsibility of the
County and shall be completed at the sole cost and expense of the County. The
County shall make all efforts to ensure that the permit requirements are
satisfied and construction is completed and operations are authorized as
expeditiously as possible. Casella guarantees that the design and construction
of the expansions will meet or exceed any and all state requirements pertaining
to municipal solid waste landfills in New York State.
I. Effective Date Responsibilities
Upon the Effective Date, and until this Agreement is terminated,
Casella shall be responsible for all necessary maintenance, including winter
preservation, for operating control of the Lined Landfill as necessary to meet
the reasonable requirements of operation and maintaining as established by the
County engineers.
Page 38 - September 5, 1996
In addition, Casella will assume upon the Effective Date, all
negotiating responsibility for the County related to leachate disposal
associated with the Lined Landfill.
14. USE AND COMPLIANCE WITH LAW
The Facilities, other than the Unlined Landfill shall be kept by Casella in
substantial order and repair outside and inside at its sole cost and expense and
Casella shall comply with all orders, regulations, rules and requirements of
every kind and nature, now and hereinafter in effect, of the federal, state,
municipal or other governmental authorities having the power to enact, adopt,
impose or require the same whether they be usual or unusual, ordinary or
extraordinary or whether they or any of them relate to environmental
requirements or otherwise and Casella shall pay all costs and expenses
incidental to such compliance and shall indemnify and hold harmless the County
from all expense and damages by reason of any notices, orders, violations or
penalties filed against or imposed upon the Facilities, exclusive of the Unlined
Landfill, or against the County as owner thereof because of the failure of
Casella to comply with this covenant.
Casella shall have the right, at its own cost and expense, to contest or
review by legal proceedings the validity or legality of any law, order,
ordinance, rule, regulation, direction, or certificate of occupancy and during
such contest Casella may refrain from complying therewith provided that Casella
will not be subjected to criminal prosecution thereby and, that if requested to
do by the County, Casella shall furnish to the County a bond in form and amount
reasonably satisfactory to the
Page 39 - September 5, 1996
County guaranteeing to the County compliance by Casella such law, order,
ordinance, rule or regulation, if required.
15. LABOR AGREEMENTS
Casella and the County acknowledge that the County employs certain
employees at the presently functioning Facilities which are subject to a Labor
Agreement, annexed hereto as Exhibit "5", which expires on December 31, 1996.
The County acknowledges its obligation to bargain in good faith with respect to
any effect this Agreement might have on its employees, pursuant to the annexed
Labor Agreement and Casella and the County acknowledge that it is not the
intention of this Agreement to modify the existing Labor Agreement or the
obligations of the County.
Casella and the County agree to enter into a Labor Utilization Agreement
annexed hereto as Exhibit "3", relative to the existing county employees subject
of that Labor Agreement in order to maintain the status quo between the County
and its employees until the expiration of the Labor Agreement. Casella and the
County agree to be bound by the terms of the annexed Labor Utilization
Agreement.
16. GENERAL POWERS
In addition to the other powers granted to the County, it is expressly
acknowledged that in the exercise of the dominion and control of the Facilities,
Casella will be free, without restriction, to subcontract out those services
that it deems appropriate in its sole discretion, including, but not limited to,
Closure, Post-Closure Care, transportation of waste from the Convenience
Stations, or such
Page 40 - September 5, 1996
other services that Casella deems necessary, provided, however, that to the
extent applicable, Casella shall ensure that the subcontractors follow the
provisions of this Agreement.
17. LEACHATE DISPOSAL
Casella will enter into a long-term leachate disposal agreement with two
certified sources including at least one municipality located within the County
for the disposal of leachate. The responsibility for paying for leachate
disposal during the term of this Agreement shall be that of Casella.
18. RECORDS/AUDITS
The acceptance by the County of Recycling Payments or payments under the
Host Agreement, shall be without prejudice to the County's rights to an
examination of Casella's books and records from the operation of the Facilities
in order to verify the amount of Acceptable Waste or received material accepted
in the Recycling Program as provided herein, which should obligate Casella to
make payments to the County.
Casella shall, on the due date of each payment, deliver to the County a
written statement prepared and certified by Casella, showing in detail the
calculation of all payments due on that day.
Casella shall keep accurate and true records, books and dates with respect
to all material received under the Recycling Program and all Acceptable Waste
received at the Landfill. Accurate books and other records and data of account
shall be kept of
Page 41 - September 5, 1996
such business whether payment was made for cash or otherwise and whether or not
monies were actually received.
The County and its agents shall have the right at all reasonable times, but
in no event more than four times each calendar year, and on five days prior
written notice to Casella, to inspect and examine the accounts, records, books,
contracts and other data concerning the gross volume of business conducted under
this Agreement to the extent relevant to the calculation of monies due the
County. In the event that such inspection and examination shall disclose that
there is a material variation between the reports rendered by Casella as
aforesaid and the actual gross volume of business, the cost of the County's
examination shall be paid for by Casella as Lease Payments. Any information
obtained by the County as a result of such examination shall be treated as
confidential.
Casella shall not be obligated to hold the books and records for more than
2 years, provided there is no material variation as aforementioned.
19. NO JOINT VENTURE
It is further understood and agreed, that neither this Agreement nor the
method thereinbefore set forth for computing payments to the County by Casella,
nor any other provision of this Agreement or the Host Agreement, are intended
nor shall ever be construed as to create a co-partnership by and between the
County and Casella or make Casella and the County joint venturers, or make the
County in any way responsible for debts and/or losses of Casella.
20. REPRESENTATIONS AND WARRANTIES OF THE COUNTY
Page 42 - September 5, 1996
The County represents and warrants to Casella as follows:
(a) The County is a county in the State of New York with full legal right,
power and authority to enter into and to fully and timely perform its
obligations under this Agreement.
(b) The County is duly authorized to execute and deliver this Agreement and
this Agreement constitutes a legal, valid binding obligation of the County and
enforceable against the County in accordance with its terms.
(c) Neither the execution or the delivery by the County of this Agreement
nor the performance by the County of its obligations in connection with the
transactions contemplated hereby or the fulfillment by it of the terms and
conditions hereof conflicts with, violates or results in a breach of any
constitution, law or governmental regulation applicable to it or materially
conflict with, violates or results in a breach of any term or condition of any
order, judgment or decree or any agreement or instrument to which the County is
a party or by which the County or by any of its properties or personal property
are bound or constitutes a default.
(d) No approval, authorization, order, consent, declaration, bid,
registration or filing with any federal, state or local governmental authority
or referendum of voters which has not been obtained is required for the valid
execution and delivery by the County of this Agreement or the performance by the
County of its obligations hereunder.
(e) There is no action, suit or proceeding at law or inequity before or by
any Court or governmental authority pending or threatened against the County in
Page 43 - September 5, 1996
which an unfavorable decision, ruling or finding would materially adversely
affect the performance by the County of its obligations hereunder or other
transaction contemplated hereby or that in any way would materially adversely
affect the validity and enforceability of this Agreement.
(f) The permits supplied by the County to Casella for Phase I have not been
suspended, revoked or materially effected by any court, governmental authority,
regulatory ruling or regulatory advisement, and the County knows of no fact
under which the capacity of Phase I would be limited or restricted.
(g) The County knows of no facts which would prevent, limit or restrict the
granting of permits for Phase II, III at the Anticipated Capacities and Annual
Capacity from the New York State Department of Environmental Conservation or
would limit the anticipated capacity of those Phases.
(h) There are no contracts or agreements whereby any person, firm or entity
has any right over the Facilities.
(i) Annexed hereto as Exhibit "6" are full and complete permits which have
been issued relative to those portions of the Facilities requiring such permits.
All permits are in full force and effect and the County knows of no facts which
would affect the validity and continued operation of the Facilities subject of
these permits. The permits have not been suspended, revoked or affected by any
court, governmental authority, regulatory rule or regulatory advisement and the
County knows of no facts which might adversely affect these permits.
Page 44 - September 5, 1996
(j) The Labor Agreement annexed hereto as Exhibit "5" is the sole union
contract effecting personnel subject of this Agreement.
(k) There are no pending or threatened labor disputes, disturbances,
litigation, events or conditions (and to the best of the County's knowledge no
basis for same) involving the County and its employees relative to personnel
presently performing functions at the Facilities. There are no pending demands
for collective bargaining and no proceedings are pending before the Public
Employees Relations Board or any other such body having jurisdiction. The County
has not committed an unfair labor practice and is not a party to any collective
bargaining agreement related to the Facilities other than set forth in Exhibit
"5".
(l) The County covenants:
(i) None of the constructed buildings, structures and improvements
subject to this Agreement encroach on adjoining real estate.
(ii) All constructed buildings, structures and improvements are
located and constructed in conformance with all setback lines,
easements and other restructures or rights of records where it
has been established by the applicable zoning or building
ordinance or were in place prior to the institution of such
restrictions.
(iii) The improvements located on the Property are not the subject of
any official complaint or notice of violation of any applicable
zoning ordinance, use ordinance, building code, certificate of
Page 45 - September 5, 1996
occupancy or similar rule, regulation or permit and no such
violation is known to exist.
(m) None of the Facilities are subject to a security interest, mortgage,
deed of trust, lien, encumbrance or similar interest which would prevent the
culmination of this Agreement and the County owns fee simple good insurable
title to the Property except as is set forth in Schedule "K".
(n) None of the representations or warranties made by the County herein and
in the exhibits hereto and other information and material delivered by the
County to Casella contains any untrue statement of material fact or omits any
material fact necessary in order to make the statements contained herein and
therein not misleading.
(o) All reports and returns, whether to the New York State Department of
Environmental Conservation or other agency, regarding the Facilities required to
be filed with any governmental agency to date (federal, state or local) have
been filed. Except as disclosed to Casella in the consent order annexed hereto
as Exhibit "2", the County has no notice of any claim, violation of any
applicable federal, state, county and local law, ordinance or regulation,
including those applicable to discrimination in employment, pollution of the
environment and occupational safety and health. In particular the County has
filed all of the required notifications with the United States Environmental
Protection Agency and the New York State Department of Environmental
Conservation.
Page 46 - September 5, 1996
21. REPRESENTATIONS AND WARRANTIES OF CASELLA
Casella represents and warranties to the County as follows:
(a) Casella is a foreign corporation duly incorporated, validly existing
and authorized to do business under the laws of the State of New York with full
legal right, power and authority to enter into and fully and timely perform its
obligations under this Agreement.
(b) Casella has duly authorized, executed and delivered this Agreement and
this Agreement constitutes a legal, valid and binding obligation enforceable
against Casella in accordance with its terms.
(c) Neither the execution or delivery by Casella of this Agreement nor the
performance by Casella of its obligations in connection with the transactions
contemplated hereby or the fulfillment of the terms and conditions hereof
conflicts with, violates or results in a breach of any law or governmental
regulation applicable to it or materially conflicts with, violates or results in
a breach of any term or condition of any order, judgment or decree or any
agreement or instrument to which Casella is a party or which Casella or any of
its properties or personal property are bound or constitutes a default
thereunder.
(d) No approval, authorization, order, consent, declaration, registration
or filing with any federal, state or local governmental authority is required
for the valid execution and delivery by Casella of this Agreement or the
performance by Casella of its obligations hereunder.
Page 47 - September 5, 1996
(e) There is no action, suit or proceeding at law or in equity before or by
any court or governmental authority pending or threatened against Casella to the
best of Casella's knowledge, in which an unfavorable decision, ruling or finding
would materially and adversely affect the performance of Casella of its
obligations hereunder or any other transaction contemplated hereby or that in
any way would materially adversely affect the validity or enforceability of this
Agreement.
22. SURVIVAL OF WARRANTIES, REPRESENTATIONS AND COVENANTS
All representations, warranties, promises, agreements, covenants and
statements made herein or in any Schedule or Exhibit annexed hereto or in any
instrument or document delivered by or on behalf of any party pursuant to this
Agreement shall extend for the duration of this Agreement, as it may be
extended, regardless of what investigations the parties may have made before or
after the closing, except those representations and warranties which are
expressly waived by the party benefiting therefrom. Nothing herein contained
shall require that party to waive such representation and warranty.
23. TERMINATION
This Agreement may be terminated at any time:
(a) By mutual written agreement of the parties;
(b) By Casella if:
(1) Litigation is filed or threatened or any governmental authority
institutes an investigation of, to prohibit or takes action to
prevent consummation of any of the transactions contemplated
Page 48 - September 5, 1996
hereby or does anything which in Casella's judgment renders such
consummation imprudent and the County fails to cure such default
within ninety (90) days.
(2) Any material portion of the Facilities is condemned, destroyed or
damaged by fire or otherwise.
(3) Any of the County's representations or warranties are not
materially true and accurate.
(4) If Casella is unable to enter into the anticipated leachate
disposal agreements prior to June 30, 1997.
(5) If the County fails to provide local permitting, zoning or other
obligated support pursuant to paragraphs 12 of this Agreement.
(6) If the County fails to obtain Phase I operational authority at
the defined capacities and the Annual Capacity or fails to
conclude construction pursuant to its obligations under paragraph
13(H) of this Agreement.
(c) By Casella relative to the Facilities, excluding the Unlined Landfill,
if:
(1) In the event that the County is unable to obtain operating
authority for Phase I of the Lined Landfill or, alternatively, is
unable to transfer said operational authority and/or permits
thereunder to Casella and the County fails to cure such event
within ninety (90) days.
(d) By the County if:
Page 49 - September 5, 1996
(1) In the event of a default as defined by paragraph 35(B).
(2) Prior to the Closing Date through the payment of liquidated
damages in the sum of $100.00.
24. STRICT PERFORMANCE
The failure of either party to insist on the strict performance of any of
the terms, covenants and provisions of this Agreement or to exercise any option
herein contained shall not be construed as a waiver or a relinquishment for the
future of such term, covenant, condition, provision or option.
In addition to the other remedies provided in this Agreement, the County
shall be entitled to a restraint by injunction of the violation or attempted or
threatened violation of any of the terms, covenants, conditions or provisions of
this Agreement.
25. OPTION TO EXTEND LEASE
In the event that this Agreement is extended during its term, and in the
event that the extension is for a period of 25 years, then, in consideration of
that extension, Casella shall pay to the County the Option Payment, which
payment shall be due no earlier than the 7th year anniversary of the Closing
Date, or in the event the extension is executed after the 7th year anniversary,
but prior to the expiration of the original term, then the Option Payment shall
be due on the execution date of the extension agreement, whichever comes later.
If the parties shall so avail themselves of such option, the parties shall
promptly execute an extension agreement which shall contain substantially like
terms and provisions as this Agreement, except those parts hereof which shall
have been
Page 50 - September 5, 1996
fully performed and except that no Lease Payments shall be required for the term
of the extension, but payments shall continue under the provisions of the Host
Agreement.
26. EMINENT DOMAIN
The County agrees to waive any rights that it might have to acquire the
leasehold, or title as the case might be, to all, or any portion of, the
Facilities and agrees to cooperate with Casella in opposing any effort by any
other governmental body to exercise its rights, if any, of eminent domain.
In the event an award is made, it shall be apportioned between the County
and Casella on the basis of the value of Casella's leasehold, or operating
contract, including any extensions, but subject to the County's reversionary
interest.
27. CHAMPLAIN VALLEY INDUSTRIES
Casella agrees to assume and hold harmless the County with respect to the
County's financial obligations to the extent of $46,355.00 (Forty six thousand,
three hundred and fifty five) to Champlain Valley Industries pursuant to the
contract annexed hereto as Exhibit "7" for the year 1996.
28. INSURANCE
Casella covenants and agrees to procure and keep in force and effect at all
times with the premiums paid, general liability, fire and workers compensation
insurance insuring both the County and Casella for the Facilities, excluding the
Unlined Landfill, in the amounts set forth in Schedule "L", insuring against
loss by solvent insurance companies authorized and licensed to issue such
policies in the
Page 51 - September 5, 1996
State of New York and to maintain such insurance at all times during the term of
this Agreement and any extensions thereto. Casella agrees to pay premiums as
they so accrue and if not so paid, the County, at its option, shall pay such
premiums. Such accrued premiums, whether or not paid for by the County, shall be
deemed additional Lease Payments due and payable on the next Lease Payment due
date or the following quarter if all Lease Payments have been made. Payments of
such premium by the County shall not be deemed a waiver of the default in
payment by Casella, and the County, whether or not it should have paid such
premiums, shall have recourse to remedies hereinbefore provided in the
performance of the terms and conditions of this Agreement. It shall be the
County's responsibility to provide insurance for the Unlined Landfill and to
name Casella as an added insured on said policy to the extent of the County's
coverage.
29. COVENANT OF QUIET ENJOYMENT
The County covenants and agrees that Casella, on paying the Lease
Payments and other payments envisioned by this Agreement and observing and
keeping the covenants, agreements and stipulation of this lease on its part to
be kept, shall lawfully, peacefully and quietly hold, occupy and enjoy (or
operate, as the case might be) said Facilities, during the term and any
extensions thereto without hindrance, objection or molestation.
30. ASSIGNMENT
This Agreement may be assigned by Casella to any entity controlling,
controlled by, or under common control with Casella.
Page 52 - September 5, 1996
31. CUMULATIVE REMEDIES
The specified remedies to which the County may resort under the terms
of this Agreement are not exclusive of any other remedies or means of redress to
which the County may be lawfully entitled in case of any breach or threatened
breach by Casella of any provision or provisions of this Agreement.
32. ARBITRATION
Whenever under any previous provisions of this Agreement it is provided
that a dispute be determined by arbitration, the County and Casella shall within
thirty (30) days after demand by either party to the other for the appointment
of arbitrators, each appoint a person as an arbitrator to determine such
dispute. Each party shall make its respective appointment and notify the other
thereof in writing not later than the dates so provided and in default of such
appointment or notification by either party of such date, then on written
application by the party not in default the then presiding judge of the Supreme
Court of Clinton County shall appoint a person to act as their arbitrator for
and on behalf of the party hereto that has so defaulted in making such
appointment. If two arbitrators so appointed shall within fifteen (15) days
after the date of notification of appointment of the one of them who was last
appointed, be unable to agree upon the determination of such dispute then said
two arbitrators shall appoint one other fit and impartial person to act as a
third arbitrator. If they shall fail to appoint such third arbitrator within the
said period of fifteen (15) days, then upon written application by either party
hereto, such third arbitrator shall be appointed by said justice and the person
so appointed as a third arbitrator shall
Page 53 - September 5, 1996
serve and act together with the first two arbitrators for the purpose of said
arbitration.
33. CAPTIONS AND HEADINGS
Captions and headings throughout this Agreement are for convenience and
reference only and the words contained therein shall in no way be held or deemed
to define, limit, describe, explain, modify, amplify or add to the
interpretation, construction or meaning of any provision or of the scope or
intent of this lease nor in any way affect this lease.
34. MODIFICATIONS
This Agreement cannot be changed orally, but only by agreement in writing
signed by the party against whom enforcement of the change, modification or
discharge is sought or by its duly authorized agent.
35. DEFAULT/REMEDIES
(a) Breaches. A breach of this Agreement shall mean a material failure by
either party to comply with any of the material provisions of this Agreement.
(b) Events of Default. An event of default shall mean a breach of this
Agreement by the County, which breach is not cured pursuant to paragraph 36
hereof, or a breach of one of the following obligations of Casella which is not
cured pursuant to paragraph 36:
(1) Failure to make Lease Payments after proper notification.
(2) Failure to make Host Fee payments after proper notification.
(3) Failure to make Recycling Payment after proper notification.
Page 54 - September 5, 1996
(4) Breach of Closure responsibilities.
(5) Failure to provide permit required closure reserves resulting in
a determination of a permit violation.
(6) Failure to construct Phase II or Phase III in a timely manner,
subject to adequate market conditions and the cooperation of the
Town and County pursuant to their obligations under the Host
Agreement.
All other, if any, alleged breaches by Casella may be enforced by judicial or
administrative order or judgment, as the case might be, but shall not be
considered an event of default and shall not give rights to the County to
terminate this agreement.
(c) Remedies for Default.
(i) In the event of a default under this Agreement , the
non-defaulting party shall, upon five (5) days prior written notice to the
defaulting party, have the right, but not the obligation or duty, to cure such
default, including the right to offset the costs of curing the default against
any sums due or which become due to the defaulting party under this Agreement.
In any event, such costs shall be considered additional Lease Payments or
credits under the Agreement. The non-defaulting party shall use its best efforts
to employ an economically reasonable method of curing any such default.
(ii) If any event of default occurs and is not cured in the manner
allowed hereunder, then this Agreement shall continue in force and the
Page 55 - September 5, 1996
non-defaulting party shall have the right to take whatever action at law or in
equity that it deems necessary or desirable to collect any amounts then due or
thereafter to become due under this Agreement or to enforce performance of any
covenant or obligation of the breaching party under this Agreement.
36. RIGHT TO CURE BREACH
Each party shall, in the case of any breach of its obligations under this
Agreement, either:
(a) Cure the breach within ninety (90) days of receipt of written notice
from the non-breaching party or;
(b) Continuously demonstrate within such cure period that it is actively
and continuously pursuing a course of action which can reasonably be expected to
lead to a curing of the breach (the ninety (90) day period will be extended for
so long as the breaching party is actively and continuously pursuing such a
course) provided, however, that (i) in the event of the failure of any party to
this Agreement to pay the other party or parties any sum or due amount required
to be paid when due hereunder, cure shall consist of payment which will be made
within fifteen (15) days of written demand from the non-breaching party together
with interest accruing at the legal rate from the date the payment was due; (ii)
in the event that Casella materially fails to limit the processing or disposal
of Excluded Waste to that allowed to be processed or disposed of by this
Agreement or unreasonably rejects Acceptable Waste from the County from
processing or disposal at the Landfill, the cure shall consist of the immediate
action to remedy these practices within thirty (30) days or
Page 56 - September 5, 1996
such additional time as may be reasonably necessary to cure, provided that
Casella is actively and continuously pursuing a course of action which will
reasonably lead to a curing of the breach
37. NOTICE
All notices or other communications to be given hereunder shall be in
writing and may be given by personal delivery or by registered or certified
United States mail, return receipt requested, properly addressed as follows:
To the County: Administrator
County of Clinton
137 Margaret Street
Plattsburgh, New York 12901
With a copy to:
To Casella: James Bohlig, Vice President
Casella Waste Systems, Inc.
Box 866
Rutland, Vermont 05702
With a copy to: Ronald Sinzheimer, Esq.
23 Elk Street
Albany, N.Y. 12207
38. FORCE MAJEURE
In the event that the County or Casella is rendered unable, wholly or in
part, by an event of Force Majeure to carry out any of the obligations under
this Agreement, then, in addition to the other remedies provided in this
Agreement, the obligations of the respective party may be suspended during the
continuation of the
Page 57 - September 5, 1996
event of Force Majeure, but for no longer a period. At any time that either
party intends to rely upon an event of Force Majeure to suspend obligations as
provided in this section, the party shall notify the other party to this
Agreement as soon as reasonably practical describing in reasonable detail the
circumstances of the event of Force Majeure. Notice shall again be given when
the effect of the event of Force Majeure has ceased.
39. SEVERABILITY
In the event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such illegality or unenforceability shall not effect any other
provisions of this Agreement and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
Provided, however, that it is the intention of the parties that in lieu of such
term, clause or provision that is held to be invalid, illegal or unenforceable,
there should be added by mutual agreement as a part of this Agreement a term,
clause or provision as similar in terms to such illegal, invalid or
unenforceable term, clause or provision as may be possible, valid legal and
enforceable. Notwithstanding the above, if the term of this Agreement is held to
be invalid, illegal or unenforceable in any respect, then the term of this
Agreement shall automatically be the maximum valid and legal term allowed by
applicable common or statutory law. In the event that the term held to be
invalid, illegal or unenforceable prevents the operation of the Lined Landfill
by Casella and the term may not be amended to allow such operation, Casella may,
at its option,
Page 58 - September 5, 1996
terminate this Agreement and the Lease Payments made hereunder shall be
apportioned based on the Air Space anticipated for the Lined Landfill versus the
actual Air Space utilized and the appropriate payments, or refunds, shall be
made in order to reflect that apportionment.
40. SUSPENSION AND EXTENSION
In the event the disposal of Acceptable Waste in the Lined Landfill is
delayed by judicial or legal action taken by parties other than the County or
Casella, or that the effectuation of the material terms of this Agreement is
delayed by such action, this Agreement shall be extended by the period of such
delay, whether such delay was caused by court order or by the litigation
process.
41. CONSTRUCTION
Words importing the singular number shall include the plural in each case
and vice versa, and words importing persons shall include firms, corporations,
or other entities. The terms "herein", "hereunder", "hereto", "hereof" and any
similar terms, shall refer to this Agreement; the term "heretofore" shall mean
before the date of adoption of this Agreement. This Agreement is the result of
joint negotiations and authorship and no part of this Agreement shall be
construed as the product of any one of the parties hereto.
42. ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the County and
Casella, and cancels and supersedes all prior negotiations, representations,
understandings and agreements, either written or oral, between such parties with
Page 59 - September 5, 1996
respect to the subject matter hereof. The parties acknowledge and agree that
this Agreement is entered into in contemplation of the contemporaneous execution
of the Host Agreement, and the Labor Utilization Agreement, and these agreements
shall be read and interpreted together. No changes, amendments, alterations, or
modifications to this Agreement shall be effective unless in writing and signed
by the parties hereto.
43. COUNTERPARTS
This Agreement may be executed in two (2) counterparts, each of which will
be considered an original.
44. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
Laws of the State of New York.
45. BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of the
parties hereto, Casella and their respective successors and/or assigns.
46. AUTHORITY OF PARTIES
The individuals who have executed this Agreement on behalf of the
respective parties expressly represent and warrant that they are authorized to
sign on behalf of such entities for the purpose of duly binding such entities to
this Agreement.
47. EFFECT
This Agreement restates the Operation, Management and Lease Agreement. It
is intended to restate the Operation, Management and Lease Agreement with minor
Page 60 - September 5, 1996
variations, without effecting the full force and effect of the Operation,
Management and Lease Agreement or the obligations which commenced on the date it
was executed to the extent this Agreement differs from the Operation, Management
and Lease Agreement, this Agreement shall govern.
IN WITNESS WHEREOF, the parties have placed their signatures and seals.
COUNTY:
-------
CLINTON COUNTY, NEW YORK
------------------------
By:
---------------------------
Title:
---------------------------
Attest:
---------------------------
Date of Execution:
---------------------------
Title: (County Seal)
---------------------------
CASELLA:
--------
CASELLA WASTE SYSTEMS, INC.
---------------------------
By:
---------------------------
Title:
---------------------------
Attest:
---------------------------
Date of Execution:
---------------------------
Title: (Corporate Seal)
---------------------------
Page 61 - September 5, 1996
STATE OF NEW YORK )
) ss.:
COUNTY OF CLINTON )
On this 9th day of September, 1996, before me came John Casella, to me
personally known, who, being by me duly sworn, did depose and say that (s)he
resides in Rutland, VT, that (s)he is the President of the Casella Waste
Systems, Inc. described in, and which executed, the within Instrument; that
(s)he knows the seal of said CWS; that the seal affixed to said Instrument is
such CWS seal; that it was so affixed by order of the Board of Directors of said
CWS; and that (s)he signed his/her name thereto by like order.
---------------------------------
NOTARY PUBLIC
STATE OF NEW YORK )
) ss.:
COUNTY OF CLINTON )
On this 9th day of September, 1996, before me came Donald Garrent, to me
personally known, who, being by me duly sworn, did depose and say that he
resides in Plattsburgh, NY, that he is the Chairman County Leg. of the municipal
corporation described in, and which executed, the within Instrument; that he
knows the seal of said corporation; that the seal affixed to said Instrument is
such corporate seal; that it was so affixed by order of the County Leg. of said
corporation; and that he signed his name thereto by like order.
---------------------------------
NOTARY PUBLIC
Page 62 - September 5, 1996
LABOR UTILIZATION AGREEMENT
VERSION 6 August 7, 1996
LABOR UTILIZATION AGREEMENT
This Agreement ("Agreement") is made by and between Casella Waste
Systems, Inc., a foreign corporation duly authorized to do business in the State
of New York, having its principal place of business at Box 866, Rutland, Vermont
05702 ("Casella") and Clinton County, a New York State Municipal Corporation,
created under Article 9 of the New York State Constitution, having a principal
place of business at 137 Margaret Street, City of Plattsburgh, County of
Clinton, State of New York 12901 ("County").
WHEREAS the County and Casella have entered into an Operation,
Management and Lease Agreement relative to the operation of certain facilities
for the collection and management of solid waste located within Clinton County;
and
WHEREAS the County and its employees are currently parties to a
collective bargaining agreement for the period January 1, 1995 through December
31, 1996 covering certain Employees providing services at the Landfill and
Recycling Program; and
WHEREAS the County and Casella have determined that the County shall
remain the employer of the current Employees providing such services and that
those Employees should remain employed by the County under the terms and
conditions of the current CBA;
NOW, THEREFORE, in consideration of the representations, warranties,
promises, covenants, and agreements hereinafter contained and contained in the
Operation, Management and Lease Agreement, and other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. DEFINITIONS
For the purpose of this Agreement, all capitalized words and phrases
shall have the meanings set forth in the Operation, Management and Lease
Agreement except to the extent a meaning is set forth as follows:
(a) "CBA" shall mean the Collective Bargaining Agreement for the period
January 1, 1995 through December 31, 1996, between the County and the Civil
Service Employees Association, Inc., Local 1000/AFSCME, AFL-CIO, Clinton County
Unit 6450-6466 of Local 810 ("CSEA"), and any successor agreement thereto.
(b) "Employees" shall mean any and all employees of the County covered
by the CBA and providing services to the County at the Facilities.
(c) "Labor Adjustment" shall mean the adjustment to the Tipping Fee or
other payments as provided in Section 3B hereof.
(d) "Director, Solid Waste" shall mean the management position
designated as exempt from coverage under the CBA.
2. EMPLOYEES
A. Employment Relationship. Casella and the County agree that the
current Employees shall remain Employees of the County. Nothing in this
2
Agreement, the Operation, Management and Lease Agreement, or the Host Agreement
is intended or shall be deemed to create an employment relationship between
Casella and the Employees. All terms and conditions of employment set forth in
the CBA or as may be provided by law shall remain in force and effect throughout
the term of the CBA. The Employees shall continue to be paid by the County and
shall continue to maintain their civil service status under state and local law
and to receive all benefits as provided by the County. The County and the
Employees shall continue to be bound by all applicable provisions of the Civil
Service Rules of Clinton County and of all state or local laws applicable to
their employment relationship. The County agrees to satisfy all of its
contractual and legal obligations with regard to any duty to bargain in good
faith with its Employees under the CBA.
B. Employee Assignments and Supervision. Casella and the County agree
that Casella will utilize the services of those Employees hired by the County
and provided to Casella by the County in connection with the operation of the
Facilities. Prior to the commencement of the term of the Operation, Management
and Lease Agreement, Casella will advise the County of the number of Employees
that Casella determines is necessary to be provided by the County in order for
Casella to satisfy its operational needs and requirements at the Facilities.
This number of Employees shall be known as the Baseline Staffing Level.
Casella may advise the County at any time that it has determined that
there should be a change in the Baseline Staffing Level, either to a higher or
lower level. The County will have thirty (30) days to meet the new Baseline
Staffing Level. In the
3
event that the County is able to meet the new Baseline Staffing Level within
thirty days, Casella shall absorb any labor costs it may have incurred during
that time period which arise out of the change in Baseline Staffing Level. In
the event that the County is unable to meet the new Baseline Staffing Level
within thirty days, the County shall be responsible for any labor costs
associated with its non-compliance. The cost of such noncompliance shall be an
element of any Labor Adjustment, as provided in Section 3B hereof.
The County agrees to consult with Casella in selecting a person to be
employed as the Director, Solid Waste with authority to supervise all activities
at the Facilities. The County will not employ any person as the Director, Solid
Waste unless Casella consents to the person to be employed. Casella will
reimburse the County for the full amount of the Director, Solid Waste's wages
and benefits. This reimbursement shall be in addition to Casella's reimbursement
obligations under Section 3A hereof. Casella shall have the exclusive right to
appoint and hire as its own employees and its own expense any additional
management personnel that it deems necessary to perform its duties under the
Operation, Management and Lease Agreement. The management personnel employed by
Casella shall have the authority to exercise Casella's physical and operational
control of the Facilities, pursuant to the Operation, Management and Lease
Agreement, subject to such oversight by the Director, Solid Waste appointed by
the County as is necessary for the County to satisfy its obligations to the
Employees under the CBA, the Civil Service Rules of Clinton County, and the
Civil Service Law. In the event that the
4
County elects not to appoint and/or continue to employ a Director, Solid Waste,
the management personnel employed by Casella shall have full and final
management authority at the Facilities, subject only to the procedures set forth
in paragraphs D and E of this Section.
C. Administration. The County will continue to be responsible for the
administration of all Employees covered by the CBA, including all personnel,
benefit, grievance, and other administrative requirements of the CBA, the Civil
Service Rules of Clinton County and the Civil Service Law. Casella agrees to
abide by the administrative requirements of the CBA with regard to performance,
discipline, termination, and necessary documentation under the CBA to the extent
necessary to allow the County to fulfill its obligations under the CBA. All
performance evaluations required under the CBA shall be prepared by the
Director, Solid Waste, unless the County does not employ a Director, Solid
Waste, in which case performance evaluations shall be prepared by the
supervisory employee designated by Casella.
D. Grievance Procedures. Pursuant to the grievance procedures set forth
in the CBA, the Director, Solid waste will act as the immediate supervisor under
Step 1 of the grievance procedure, unless the County does not employ a Director,
Solid Waste in which case Casella agrees to designate a supervisory employee at
the Facilities to serve as the immediate supervisor under Step 1 of the
grievance procedure. In the event that the grievance procedure ultimately
results in a determination adverse to Casella's exercise of managerial and
operational control of
5
the Facilities, Casella may either agree to the determination or may reject it.
In the event that Casella decides to reject the determination, this does not
affect the binding nature of the determination on the County under the CBA, and
the County agrees to seek a resolution of the dispute with Casella. If the
grievance determination imposes a monetary award to the Employee, the financial
obligation will be imposed solely on the County. If the grievance determination
results in an increased cost of operation to Casella, the increased cost will be
a factor in any Labor Adjustment.
E. Discipline and Discharge.
Casella will have discretion to recommend that the County begin
proceedings under CBA Article 29 (or Section 75 of the Civil Service Law if it
applies) for any employee at the Facilities. If the County agrees, in the
exercise of its independent judgment, it will initiate personnel action against
the employee forthwith in accordance with the procedures imposed by the CBA or
by operation of law. If Casella has properly documented the reasons for its
recommendation to discipline or discharge the employee, but the County decides
not to initiate personnel action for the employee or the Article 29 or Section
75 proceedings result in a finding that the action was improper or unjustified
(except to the extent it violates federal, state or local discrimination laws),
and orders the employee reinstated, the County will find other employment for
the employee in compliance with the CBA, Civil Service Rules
6
of Clinton County, and the Civil Service law, and Casella will have no
obligation to retain, at its cost, the employee.
F. Strikes.
In the event of a strike by the Employees, the County agrees to
exercise and enforce all of its rights under state law as a public employer to
end the strike through injunction or otherwise. All costs of such legal
proceedings shall be borne by the County. During the pendency of a strike,
Casella's obligations to pay the County for Employee compensation pursuant to
Section 3A hereof shall be suspended and Casella shall be free to use its own
employees as replacement employees to keep the Facilities operating. Any lost
revenue or increased labor expenses to Casella as a result of a strike shall be
calculated as part of the Labor Adjustment, provided in Section 3B hereof.
3. EMPLOYEE COMPENSATION
A. Payment. Casella agrees to pay the County monthly for its costs
under the CBA for compensation and benefits provided to the Employees to be
employed at the Facilities, in the amount of $61,406.00 each month during the
period that the terms of the existing CBA remain in effect. To the extent that
the County's costs for compensation and benefits provided to the Employees that
it hires and designates to
7
work at the Facilities exceed this sum, the excess costs shall be borne
exclusively by the County except for those normal monthly payroll adjustments
accruing to the individual due to an administrative change in an individual's
benefits and not caused by across-the-board union compensation adjustments. In
the event that the County reduces or increases the number of Employees it
assigns to work at the Facilities after the term of the current CBA below or
above the Baseline Staffing Level, Casella will be entitled to reduce or
increase the monthly payment by an amount proportionate to the reduction or
increase in force. The Host Fee provided for in the Host Agreement shall be
deemed to constitute, in part, additional compensation to the County for any
incremental costs it may incur in connection with the services of its employees
that is not otherwise compensated by the payment provided for in this Section 3,
and the County and Casella agree that this constitutes fair and adequate
compensation.
B. Labor Adjustment. In each year of the Operation, Management and
Lease Agreement, during the month of January, the County and Casella will meet
to determine (i) whether there has been any increase in the previous year to the
County in labor costs as a result of any labor agreements negotiated between the
County and the collective bargaining representative for the Employees or whether
any such increased labor costs have been agreed by the County with the Employees
to take
8
effect in the coming year or (ii) whether there has been a deviation from the
Baseline Staffing Level by the County so that the monthly payment by Casella to
the County under Section 3A hereof is no longer proportionate to the Baseline
Staffing Level, or (iii) whether there have been any increased labor costs to
Casella as a result of a strike by the Employees or as a result of the need by
Casella to retain additional temporary help necessary to perform its functions
at the Facilities because of temporary failure by the County to satisfy the
Baseline Staffing Level.
To the extent that the County has incurred increased labor costs under
a negotiated agreement covering the Employees, Casella's reimbursement
obligation to the County under paragraph A of this Section shall increase by the
same percentage that the County agreed to with the Employees, but in no event
shall it increase in an amount greater than the increase in the CPI. In the
event that the increase is greater than the increase in the CPI, the County
shall absorb that portion of the increase as a necessary cost to the County of
operating the Facilities. To the extent that the number of Employees assigned by
the County to work at the Facilities is below the Baseline Staffing Level,
Casella will be entitled to reduce the monthly payment by an amount
proportionate to the reduction in force. To the extent that Casella has suffered
a loss of revenue or incurred additional expenses as a result of a strike by
9
the Employees or by the needs to retain temporary personnel or as a result of a
grievance determination, the County and Casella agree that there shall be a
temporary Labor Adjustment to reflect these additional costs to the extent
necessary to achieve a revenue neutral result to Casella. Any dispute between
the County and Casella in calculating the Labor Adjustment shall be resolved
through arbitration as described in Section 10 hereof.
4. CONTRACTING OF SERVICES
Casella will be free, without restriction, to subcontract all
construction, Closure, and Post-Closure Care associated with the Landfill
contemplated under the Operation, Management and Lease Agreement. The County
represents to Casella that these are services not ordinarily performed by the
Employees and are not subject to the provisions of Article 40 of the CBA.
In addition, Casella will be free, without restrictions, to subcontract
services required to service the Facilities not now exclusively performed by the
bargaining unit. Casella may enter into such contracts with any private
contractor, including but not limited to those contractors currently providing
such services to the County.
10
5. NO JOINT EMPLOYERS
It is understood and agreed that neither this Agreement nor the
contemporaneous Operation, Management and Lease Agreement and Host Agreement nor
any other agreement between the County and Casella is intended to or shall ever
be construed to create a joint venture or a joint employment relationship of any
employees by the County and Casella. The Employees shall at all times remain
Employees of the County.
6. REPRESENTATIONS AND WARRANTIES OF THE COUNTY
The County represents and warrants to Casella as follows:
(a) The County is a county in the State of New York with full legal
rights, power and authority to enter into and fully and timely perform its
obligations under this Agreement.
(b) The County is a political subdivision of the State of New York and
is therefore an exempt employer under the National Labor Relations Act.
(c) The County is a public employer subject to regulation under the
Taylor Law and is not regulated as a private employer under the New York State
Labor Law.
11
(d) The County is protected by the statutory prohibition against
strikes by public employees under the Taylor Law and it will take all steps
necessary to exercise and enforce that protection.
(e) The position of Director, Solid Waste is a management position that
is not covered by the CBA and is not subject to competitive or non-competitive
examination under the Civil Service Law or Rules and may be appointed by the
County in its sole discretion.
7. REPRESENTATIONS AND WARRANTIES BY CASSELA
Casella represents, warrants and agrees as follows:
(a) Existence of Good Standing.
Casella is, and will continue to be throughout the term hereof, validly
existing as a foreign corporation authorized to do business within the State of
New York.
(b) Approva1 and Authorization.
Casella has full power and authority to enter into this Agreement and
to fully perform all of its duties hereunder. Casella's Board of Directors has
duly authorized the execution and delivery of this Agreement and Casella's
performance of all its duties and obligations contained herein, and this
Agreement constitutes a
12
valid and legally binding obligation of Casella, enforceable in accordance with
its terms.
(c) No Litigation or Conflicts.
Casella acknowledges that there is no action, suit, or proceeding
pending or, to the best of Casella's knowledge and belief, threatened against or
affecting Casella, at law or in equity, before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality wherein any decision, ruling or finding would adversely affect
the transactions contemplated herein, and that the execution, delivery and
performance of this Agreement by Casella will not result in a violation of or be
in conflict with any ordinance, agreement, instrument, judgment, decree, order,
statute, rule, or government regulation to which Casella is a party or by which
Casella is bound.
8. TERMINATION
This Agreement may be terminated at any time:
(a) By mutual agreement of the parties;
(b) By either party upon termination of the Operation, Management and
Lease Agreement and/or the Host Agreement;
(c) By Casella if Casella is found by any governmental agency or court
to be the employer or joint employer of the Employees;
(d) By Casella if any of the County's warranties and representations
set forth herein are false;
13
(e) By Casella if litigation is filed or threatened, or any governmental
authority institutes an investigation or takes action, intended to require
Casella to recognize the CSEA or any other union as the exclusive bargaining
representative of the Employees, or otherwise intended to impose any collective
bargaining obligations on Casella, or in any way leads Casella in its judgment
to conclude that it is reasonably likely that Casella will be required to
recognize any union as the representative of the Employees;
(f) By Casella if Casella exercises the purchase option under the
Operation, Management and Lease Agreement;
(g) By Casella if the County terminates the CBA and does not enter into
any other collective bargaining agreement covering the Employees, or if the
county lawfully eliminates the Employees from coverage under the CBA or any
other collective bargaining agreement.
9. ASSIGNMENT
This Agreement may be assigned by Casella to any entity which is
controlling, controlled by, or under common control with Casella.
10. ARBITRATION
Whenever under any previous provisions of this Agreement it is provided
that a dispute be determined by arbitration, the County and Casella shall within
thirty (30) days after demand by either party to the other for the appointment
of arbitrators, each appoint a person as an arbitrator to determine such
dispute. Each party shall make its respective appointment and notify the other
thereof in writing not later than
14
the dates so provided and in default of such appointment or notification by
either party of such date, then on written application by the party not in
default the then presiding judge of the Supreme Court of Clinton County shall
appoint a person to act as their arbitrator for and on behalf of the party
hereto that has so defaulted in making such appointment. If two arbitrators so
appointed shall within fifteen (15) days after the date of notification of
appointment of the one of them who was last appointed be unable to agree upon
the determination of such dispute then said two arbitrators shall appoint one
other fit and impartial person to act as a third arbitrator. If they shall fail
to appoint such third arbitrator within the said period of fifteen (15) days,
then upon written application by either party hereto, such third arbitrator
shall be appointed by said justice and the person so appointed as a third
arbitrator shall serve and act together with the first two arbitrators for the
purpose of said arbitration.
11. CAPTIONS AND HEADINGS
Captions and headings throughout this Agreement are for convenience and
reference only and the words contained therein shall in no way be held or deemed
to define, limit, describe, explain, modify, amplify or add to the
interpretation,
15
construction or meaning of any provision or of the scope or intent of this
Agreement nor in any way affect this Agreement.
12. MODIFICATIONS
This Agreement cannot be changed orally, but only by agreement in
writing signed by the party against whom enforcement of the change, modification
or discharge is sought or by its duly authorized agent.
13. DEFAULT/REMEDIES
(a) Breaches. A breach of this Agreement shall mean a material failure
to comply with any of the material provisions of this Agreement.
(b) Events of Default. An event of default by Casella shall mean a
termination of the Operation, Management and Lease Agreement for cause by the
County. An event of default by the County shall mean a termination of the
Operation, Management and Lease Agreement for cause by Casella or a breach of
this Agreement by the County which breach is not cured pursuant to Section 14
hereof. Any alleged breaches by Casella may be enforced by judicial or
administrative order or judgment, as the case may be, but shall not be
considered an event of default and shall not give rights to the County to
terminate this Agreement.
16
(c) Remedies for Default.
(i) In the event of a default under this Agreement, the
non-defaulting party shall, upon five (5) days prior written notice to the
defaulting party, have the right, but not the obligation or duty, to cure such
default, including the right to offset the costs of curing the default against
any sums due or which become due to the defaulting party under this Agreement.
In any event, such costs shall be considered additional Lease Payments or
credits under the Operation, Management and Lease Agreement. The non-defaulting
party shall use its best efforts to employ an economically reasonable method of
curing any such default.
(ii) If any event of default occurs and is not cured in the
manner allowed hereunder, then this Agreement shall continue in force and the
non-defaulting party shall have the right to take whatever action at law or in
equity that it deems necessary or desirable to collect any amounts then due or
thereafter to become due under this Agreement or the Operation, Management and
Lease Agreement or to enforce performance of any covenant or obligation of the
breaching party under this Agreement.
17
14. RIGHT TO CURE BREACH
Each party shall, in the case of any breach of its obligations under
this Agreement, either:
(a) Cure the breach within ninety (90) days of receipt of written
notice from the non-breaching party or;
(b) Continuously demonstrate within such cure period that it is
actively and continuously pursuing a course of action which can reasonably be
expected to lead to a curing of the breach (the ninety (90) day period will be
extended for so long as the breaching party is actively and continuously
pursuing such a course) provided, however, that in the event of the failure of
any party to this Agreement to pay the other party or parties any sum or due
amount required to be paid when due hereunder, cure shall consist of payment
which will be made within fifteen (15) days of written demand from the
non-breaching party together with interest accruing at the legal rate from the
date the payment was due.
15. NOTICES
All notices or other communications to be given hereunder shall be in
writing and may be given by personal delivery or by registered or certified
United States mail, return receipt requested, properly addressed as follows:
18
To the County: Administrator
County of Clinton
137 Margaret Street
Plattsburgh, New York 12901
Copy to: William J. Bingel
To Casella: Casella Waste Systems, Inc.
Box 866
Rutland, Vermont 05702
Attention: James Bohlig
Copy to: Ronald Sinzheimer, Esq.
23 Elk Street
Albany, New York 12207
16. FORCE MAJEURE
In the event that the County or Casella is rendered unable, wholly or
in part, by an event of Force Majeure to carry out any of the obligations under
this Agreement, then, in addition to the other remedies provided in this
Agreement, the obligations of the respective party may be suspended during the
continuation of the event of Force Majeure, but for no longer a period. At any
time that either party intends to rely upon an event of Force Majeure to suspend
obligations as provided in this section, the party shall notify the other party
to this Agreement as soon as reasonably practical describing in reasonable
detail the circumstances of the event of Force Majeure. Notice shall again be
given when the effect of the event of Force Majeure has ceased.
17. CONSTRUCTION
Words importing the singular number shall include the plural in each
case and vice versa, and words importing persons shall include firms,
corporations, or other
19
entities. The terms "herein," "herein," "hereunder," "hereto" and any similar
terms, shall refer to this Agreement. This Agreement is the result of joint
negotiations and authorship and no part of this Agreement shall be construed
as the product of any one of the parties hereto.
18. INDEMNIFICATION
The County will indemnify Casella for any costs, damages, or expenses,
including attorney fees, incurred by Casella in the event that the CSEA, any
County employee, or any other union brings any action or proceeding challenging
the enforceability of this Agreement or the Operation, Management and Lease
Agreement or Host Agreement on the grounds that one or more of them violates any
provision of the CBA or any state or federal labor law or regulation, including
but not limited to any claim that the County failed to bargain in good faith
with the Employees or their bargaining representative before entering into these
agreements, or brings any other action or proceeding against Casella arising out
of the relationship between Casella and the County ("Labor Litigation"). The
County also agrees not to bring any action or proceeding, including but not
limited to a third party claim, against Casella as a result of any Labor
Litigation or any claim arising out of the County's obligation under the CBA to
indemnify one of its Employees.
19. INSURANCE
The County will continue to maintain any and all insurance coverage
regarding its obligations to its Employees in an amount and form consistent with
its current practices and that is sufficient to satisfy its obligations to
Casella under this
20
Agreement and to its Employees under the CBA and any applicable law or
regulation.
20. ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the County and
Casella, and supersedes all prior negotiations, representations, understandings
and agreements, either written or oral, between such parties with respect to the
subject matter hereof. The parties acknowledge and agree that this Agreement is
entered into in contemplation of the contemporaneous execution of the Host
Agreement, and the Operation, Management and Lease Agreement, and these
agreements shall be read and interpreted together. No changes, amendments,
alterations, or modifications to this Agreement shall be effective unless in
writing and signed by the parties hereto.
21. COUNTERPARTS
This Agreement may be executed in two (2) counterparts, each of which
will be considered an original.
22. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the Laws of the State of New York.
23. BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and Casella and their respective successors and/or assigns.
21
24. AUTHORITY OF PARTIES
The individuals who have executed this Agreement on behalf of the
respective parties expressly represent and warrant that they are authorized to
sign on behalf of such entities for the purpose of duly binding such entities to
this Agreement.
IN WITNESS WHEREOF, the parties have placed their signatures and seals.
COUNTY:
CLINTON COUNTY, NEW YORK
By:_________________________________
Title:_______________________________
Attest:______________________________
Date of Execution:___________________
Title:_______________________________ (County Seal)
22
CASELLA
CASELLA WASTE SYSTEMS, INC.
By:_________________________________
Title:_______________________________
Attest:______________________________
Date of Execution:___________________
Title:_______________________________ (County Seal)
23
EXHIBIT C
---------
LEASE AND OPTION AGREEMENT
--------------------------
This LEASE is by and between WASTE U.S.A., INC., a Vermont corporation with
a place of business in Coventry, Vermont and its successors and assigns
("Lessor"), and NEW ENGLAND WASTE SERVICES OF VERMONT, INC., a Vermont
corporation with a place of business in Rutland, Vermont and its successors and
assigns ("Lessee"), and 161531 CANADA INC., a Canadian corporation with a place
of business in Sherbrooke, Quebec ("Intervenor").
W I T N E S S E T H:
WHEREAS, Lessor and Intervenor entered into an Asset Purchase, Stock
Purchase and Lease Agreement with new England Waste Services, Inc. dated May 6,
1994 (the "Agreement"); and
WHEREAS, New England Waste Services, Inc. assigned its interest in the
Agreement to Lessee by Assignment dated December 14, 1995; and
WHEREAS, the parties hereto wish to record this Lease and Option Agreement
(the "Lease") in the Town of Coventry Land Records,
NOW THEREFORE, the parties hereto agree as follows:
1. Lease - In consideration of the Lease Payments, as defined in Section 4
below, Lessor does hereby lease to Lessee and Lessee does hereby hire from
Lessor, certain premises located in the Town of Coventry, County of Orleans,
State of Vermont, more particularly described below.
2. Premises - All landfill volume immediately above the landfill footprint
for which Governmental Permits have been or may be issued to Lessee by the State
of Vermont or any other Governmental Authority and are in full force and effect,
all with respect to the Waste U.S.A. landfill located in the Town of Coventry,
Vermont, on the real property conveyed by Lessor to Lessee by Warranty Deed
dated January __, 1995 and recorded in the Town of Coventry Land Records, and
more particularly described in Exhibit A attached hereto (the "Leased
Premises"). For the purposes of this Lease, "Governmental Permits" shall include
all franchises, approvals, authorizations, permits, licenses, easements,
registrations, qualifications, leases, variances and similar rights obtained
from any Governmental Authority. For the purposes of this Lease, "Governmental
Authority" shall mean (i) the United States of America; (ii) any state,
commonwealth, territory or possession of the United States of America, and any
political subdivision thereof (including counties, municipalities and the like);
or (iii) any agency, authority or instrumentality of any of the foregoing,
including any court, tribunal, department, bureau, commission or board.
-1-
3. Term of Lease - The initial lease term shall run for a period of six (6)
years commencing on December __, 1994 ("Commencement Date") and terminating six
(6) years from said date ("Initial Termination Date") unless extended as
provided below (the "Initial Term").
4.1 a. Lease Payments - Lease Payments of an amount not to exceed
$6,028,151.00 for the use of the Leased Premises shall be paid by Lessee to
Lessor as follows: (A) upon the execution of this Lease, Lessee shall pay to
Lessor in cash or by certified or bank cashier's check or by wire transfer of
such funds in accordance with Lessor's written instructions to Lessee, to secure
Lease Payments when due, the amount of $800,000 as a deposit in advance of Lease
Payments. This advance Lease Payment is not to be credited against quarterly
Lease Payments described below; and (B) the Lessee shall pay to the Lessor Lease
Payments in the aggregate amount of ten percent (10%) of the Gross Revenues (as
defined in the Agreement) of the Waste U.S.A. landfill operation (the
"Business"). The Lease Payments shall be made quarterly, within thirty (30) days
of the end of each calendar year quarter with the first such payment due at the
end of the first calendar quarter following the Commencement Date. The quarterly
Lease Payments shall be made in an amount equal to the greater of (a) the rate
of $3.75 per ton of all waste accepted at the Business adjusted (either up or
down in order to obtain 10% of Gross Revenues) at the end of the final calendar
quarter of each year following the Closing ("Adjustment Quarter") or (b)
$33,000.00. Notwithstanding the foregoing, if there shall not be sufficient cash
flow after the payment of any amounts associated with Lessee's Senior Debt as
defined in the Subordination Agreement, as defined below, and all Costs of
Operation, as defined below, of the Business in any Adjustment Quarter, the
Lessee may defer that portion of the quarterly payment of the Lease Payment that
exceeds $33,000.00, for one year (said deferred payment shall be due to Lessor
twelve (12) months from the end of the quarter in which such payment was
deferred). Any balance due with respect to the Lease Payments as aforesaid, at
the Initial Termination date, shall be paid in full only if (i) all necessary
permits for an additional one million tons of airspace over that specified in
Lessor's Phase I and Phase II Governmental Permit applications as of April 4,
1993 have been issued for the Waste U.S.A. landfill, including a final and
unappealable Act 250 permit and all necessary Governmental Permits, including an
Act 78 permit; or (ii) Dufresne-Henry, Inc. certifies that there exists
1,000,000 tons of airspace for which a final and unappealable Act 250 permit has
been issued and for which all other necessary Governmental Permits, including an
Act 78 permit may be issued. Any such balance due shall be paid in accordance
with Section 4.2. To the extent that there shall be less than an additional
1,000,000 million tons of airspace permitted, or, certified by Dufresne-Henry,
Inc., as specified above, Dufresne-Henry shall certify a pro rata reduction of
any amounts still due. All said Lease Payments shall be subordinate to Lessee's
Senior Debt. Lessee shall apply for permits for as many additional cubic yards
of airspace permitted by law within three (3) years of the Commencement Date.
For the purposes of this Lease, "Costs of Operation" include, all bona fide
costs
-2-
of operation, including, without limitation, wages, salaries and fringe
benefits, fuel, utilities (including telephone) repairs, maintenance,
monitoring, professional fees, supplies, insurance (including, as appropriate,
allocation of Lessee's blanket policy premiums based on sales or labor), taxes
other than income taxes, government fees, licenses, assessments, costs for
transportation of leachate, fees for leachate disposal, and rental charges for
equipment and excluding any special payment to any shareholders or officers of
Lessee, calculated in accordance with GAAP as of December 13, 1994. For
financial and fiscal reporting purposes only, Lease Payments are earned at a
rate of $4.30.
4.1 (b) Notwithstanding the provisions of 4.1(a) above, the Lessee shall
complete and file, within 3 years of the Commencement Date (the "Application
Period") an Act 250 permit for Phase III (substantially as shown on the plan
prepared by Dufresne-Henry, Inc. dated April 23, 1993) or, as many other Act 250
phase applications as are necessary to provide for the development of land area
necessary for an additional one million tons of airspace, over that specified in
Phase I and II Governmental Permit Application as of April 4, 1993.
In the event Lessee fails or has been precluded, for any reason, from
making such applications within the Application Period Lessee's obligations
shall be as follows:
(i) Lessee shall pay to Lessor at the Subsequent Closing the pro rata
portion of Lease Payments due according to Section 4.1(a) above; and
(ii) Lessee shall make those Act 250 applications necessary to develop one
million tons of additional airspace over and above that specified in
Phases I and II. The additional time required from the Application
Period until the legal application for one million tons has been
completed and filed with the appropriate Governmental Authority shall
be added to the Initial Termination Date (the "Permit Extension
Period"). Any such permit issued, final and unappealable during the
Permit Extension Period, shall become the basis for the Final Lease
Payment in accordance with 4.1(a) above. The Final Lease Payment, less
the amount paid at the Subsequent Closing, shall be made within 30
days thereof.
The provisions of this subsection shall not affect the terms of the Option
as set out in Section 4.2(d) or, the calculation of taxes as set out in Section
4.2(g). Any payments to be made under Section 4.2(g) shall be calculated based
on the Option chosen, all tax laws and regulations in effect at the Subsequent
Closing, and amounts paid at the Subsequent Closing and thereafter.
-3-
4.2 Purchase of Stock of Lessor/Option for Purchase of Leased Premises or
Extension of Initial Term - As an inducement for Lessee to enter into this
Agreement the Lessor and Intervenor hereby give and grant to the Lessee the
exclusive option: (i) to purchase from Intervenor all of the shares of stock of
Lessor free and clear of all encumbrances of any nature for the amount of
$300,000 (the "Option Price") on the Initial Termination Date (the "Share
Option"); or (ii) to purchase the Leased Premises and the Permit Note of Lessor
(as defined in the Agreement), rather than the shares of stock for the Option
Price (the "Asset Option"); or (iii) to extend the term of the Lease for the
remaining permitted life of the Business for the Option Price (the "Extension
Option"). The Share Option, Asset Option and Extension Option are collectively
referred to herein as the "Option" and may be exercised upon the following terms
and conditions:
(a) Term of Option - The option shall be for the duration of six (6)
years from the Commencement Date. If this option shall expire, the Lessor shall
be entitled to receive from Lessor's counsel, who shall hold such document in
escrow, a Notice of Termination in the form of Exhibit K attached hereto, the
terms of which are incorporated herein by reference.
(b) Option Price - At the time of the Subsequent Closing (as defined
below), the Option Price, as well as the Final Lease Payment as defined below,
shall be paid by Lessee to Lessor by providing the Lessor the full amount in the
form of cash, bank check, certified check, or by wire transfer of such funds in
accordance with Lessor's written instructions to Lessee.
(c) Consideration - As additional consideration for the grant of the
Option, Lessor shall continue to assist the Lessee in obtaining permits related
to the Leased Premises. In the event that there shall not be a Subsequent
Closing (as defined below), Lessor shall not be entitled to any liquidated and
agreed upon damages beyond the consideration referred to in this Subsection
4.2(c).
(d) Exercise - At any time between May 23, 1998 and six (6) years from
the Commencement Date, Lessee may exercise the Option upon twenty (20) days
written notice to Lessor. In the event of such notice to Lessor the Closing
shall occur at a closing, referred to in this Lease as the "Subsequent Closing."
At the Subsequent Closing, the Lessee shall pay to Lessor the amounts remaining
due, if any, with respect to the Lease Payments as set forth in Section 4.1 (the
"Final Lease Payment") and such amount shall be paid, along with the Option
Price. In the event of such notice of Lessee's intention to exercise the Share
Option, the Option Price and the Final Lease Payment shall be added together and
shall constitute the total purchase price of the stock, and the transfer of all
of the said shares, by appropriate transfer documents, shall be made free and
clear of any and all encumbrances and shall occur at the Subsequent Closing.
-4-
(i) Exercise of Asset Option - In the event of such notice of
Lessee's intention to exercise the Asset Option Lessor shall deliver
to Lessee title by good and sufficient warranty deed or other
appropriate documents, transferring and conveying to Lessee marketable
title to the Leased Premises free and clear of all encumbrances,
except all zoning, planning or building, rules, orders, regulations
and ordinances applicable to said Leased Premises, and any rights of
way and easements of record as of the date of the Option Agreement.
Possession of the Leased Premises shall be delivered on the date of
the Subsequent Closing.
(ii) Exercise of Share Option - In the event of such notice of
Lessee's intention to exercise the Share Option, the transfer of all
of the said shares, by appropriate transfer documents, shall be made
free and clear of any and all encumbrances and shall occur at the
Subsequent Closing.
(iii) Exercise of Extension Option - In the event of such notice
of Lessee's intention to exercise the Extension Option, a notice to
extend to Lessee, shall be executed by Lessor at the Subsequent
Closing.
The exercise of any of the Asset Option, Share Option or Extension Option
automatically extinguishes the remaining options.
(f) Improvements - Lessee shall make no improvements to the Leased
Premises during the period prior to the Subsequent Closing, other than those
permitted by Governmental Permits and to operate the Business.
(g) Taxes - If, for any reason, exercise of the Asset Option or the
Extension Option, obligates the Lessor, the Intervenor, or Jean-Pierre Rancourt,
Alain Duhamel, Rene St. Pierre and Donat Chartier ("Intervenor's Shareholders")
the shareholders of Intervenor, to pay any additional taxes in addition to the
amount of taxes such persons would have been required to pay if the Lessee had
elected to exercise the Share Option, either to Vermont, the United States,
Canada or Quebec then sufficient amounts shall be added to the payment due to
Lessor at the Subsequent Closing so as to result in no dollar effect on said
Intervenor and Intervenor's Shareholders. In addition, with respect to the
impact of the Asset Option on taxes payable by Intervenor or Intervenor's
Shareholders, the proceeds for the purchase of the shares shall be deemed
distributed to the Intervenor and Intervenor's Shareholders. It is the intention
of the parties that the Lessor shall be entitled to the benefit of the bargain
as though it negotiated the terms and conditions of this Section 4.2 as to tax
matters only, based upon a sale of its shares for the Option Price plus the
Final Lease Payment, rather than an asset transaction. In other words, the
exercise by Lessee of the Asset Option for the Option Price plus the Final Lease
-5-
Payment rather than shares of stock for the Option Price plus the Final Lease
Payment shall have no dollar effect upon Lessor, Intervenor or Intervenor's
Shareholders.
4.3 Final Lease Payment - In the event that no Option is exercised, as
provided herein, Lessee shall make the Final Lease Payment to Lessor, in cash or
by certified or bank cashier's check or by wire transfer of such funds in
accordance with Lessor's written instructions to Lessee no later than six (6)
years from the date of execution of this lease.
5. Use of Property - The Leased Premises shall be used solely by Lessee for
the purposes of the operation of a landfill according to Governmental Permits.
Said use by Lessee shall include the erection of all structures and any
improvements permitted by Governmental Permits and in order to operate the
Business.
6. Lessor's Right of Access - Lessor and Lessor's agent shall have the
right to review the books of the Lessee only during regular business hours and
upon reasonable notice to Lessee. Lessor shall have no right to enter the Leased
Premises during the term of this Lease.
7. Assignments - Lessee shall be able to assign mortgage or sublease the
Leased Premises without any consent, approvals or other restraints or
alienation.
8. Liability and Insurance - Lessee shall hold Lessor free and harmless
from any liability, loss, costs, expense and other charge imposed for any
violation of law by Lessee or its employees, agents or contracting parties and
Lessee will indemnify and hold Lessor harmless against and from any liability,
loss, cost, expenses or other charges caused by or resulting from any accident
or other occurrence and due directly or indirectly to the use of the Leased
Premises. Lessee shall maintain during the term of this Lease, liability
insurance in at least the amount of $___________, with Lessor and any leasehold
mortgagee named as additional insured parties.
9. Taxes - Lessee covenants and agrees to bear, pay and discharge all
taxes, public assessments, public utilities and any other public charges of any
nature in kind, whatsoever, which may be fixed, levied, assessed or otherwise
imposed by a Governmental Authority upon the Leased Premises. Lessee further
covenants that Lessor shall have at all times during the term of this Lease, the
right to pay any delinquent taxes, public assessments, public utility
assessments, and any other public liens or public charges assessed against the
Leased Premises, and the amount so paid, including reasonable expenses, shall be
additional rent due thirty (30) days after the rendering of a statement thereof,
by Lessor to Lessee. Lessor's payment of such delinquent amount shall not
terminate Lessee's leasehold rights or constitute a default by the Lessee
hereunder.
-6-
10. Arbitration - This Lease is made upon the condition that Lessor and
Lessee shall serve, perform and comply with all of the provisions of this Lease,
and if Lessor or Lessee fails to observe, perform or comply therewith, and if
such failure shall continue for a period of thirty-five (35) days after written
notice of such failure being given by Lessor to Lessee or vice versa, Lessor or
Lessee at any time thereafter may seek recourse only by the following procedure
(except as otherwise provided in Section 12 of this Lease and except in the case
injunctive relief is sought). Any claim by one party of the other's failure to
comply with any of the provisions of this Lease, or any claims by the other
party that despite the contention, the other party has not in fact failed to
comply with the terms of this Lease, shall be resolved by binding arbitration in
accordance with the rules of the American Arbitration Association. In the event
that the provisions of this paragraph are not met, either party may thereupon
seek any other remedy at law or in equity which may be available, except that no
remedy shall cause a termination of forfeiture of this Lease. Likewise, no
decision arising from arbitration shall cause a termination or forfeiture of
this Lease.
11. Default - If any one or more of the following events (herein sometimes
referred to as "events of default") shall happen:
(a) If default shall be made in the due and punctual payment of Lease
Payments or failure to make other payments required hereunder, or any part
thereof, when and as the same shall be become due and payable, and such default
shall continue for a period of thirty (30) days.
Lessor may not terminate this Lease but may accelerate the balance of lease
payments owing and, if permitted by the Subordination and Collateral Sharing
Agreement dated as of December, 1994, among Lessor, Lessee, The First National
Bank of Boston, as Agent and certain other parties (as amended and in effect
from time to time, the "Subordination Agreement"), may take whatever recourse it
may have against the real estate owned by Lessee and known as the Waste U.S.A.
landfill in Coventry, Vermont, only in the event the default is not cured in
thirty (30) days or if Lessor does not receive notice that Lessee is seeking
arbitration within thirty (30) days.
12. Condemnation or Eminent Domain - If, at any time, during the term of
this Lease, title to a substantial portion of the Leased Premises (meaning
hereby so much as shall render the remaining portion substantially unusable by
the Lessee for the purposes set forth herein) shall be taken by exercise of the
right of condemnation or eminent domain or by agreement between Lessor and those
authorized to exercise such right (all such proceedings being collectively
referred to as a "taking in condemnation"), this Lease shall terminate and
expire on the date of such taking and the lease payments shall be due in
accordance with Section 4.1 and Section 4.2 hereof.
-7-
That portion of the award attributable solely to Lessor shall belong solely
to Lessor. That portion of the award attributable solely to the Lessee shall
belong to the Lessee except in the event that a leasehold mortgagee also holds
title to the Leased Premises in which case, Lessee's share of the award for a
total taking or partial taking should be payable to said leasehold mortgagee(s).
If title to less than a substantial portion of the Leased Premises is taken
in condemnation, so that the Business may continue without material diminution,
this Lease shall continue in full force and effect.
13. Cancellation of Lease - Lessee shall not have the right to cancel this
Lease for damage or destruction caused by casualty or taking so long as any
leasehold mortgage is a lien on the Lease.
14.1 Indemnification by Lessor - Lessor shall indemnify, defend and hold
harmless Lessee, Lessee's shareholders, directors, officers, employees, agents,
successors and assigns, from and against all losses, damages, liabilities,
deficiencies or obligations of or to Lessee resulting from or arising out of any
claims, actions, suits, proceedings, demands, judgment, assessments, fines,
interest, penalties, costs and expenses (including settlement costs and
reasonable legal, accounting, experts and other fees, costs and expenses)
incident or relating to or resulting from any actions of Pollution Solutions of
Vermont, Inc. with or in connection with the Business. This indemnity provision
shall also apply to any and all claims, damages, fines, judgments, penalties,
costs of liabilities or lawsuits brought by any governmental agency that is
directly and indirectly caused by or results from the disposals made by
Pollution Solutions of Vermont, Inc. at the Waste U.S.A. landfill.
14.2 Right of Offset - At Lessee's option, Lessee may offset against any
Lease Payment due, the amount of any claim for which Lessor is obligated to
indemnify Lessee under this Section 14, but only if Lessee in good faith
notifies Lessor of any such indemnification claim and provides Lessee with
reasonable details forming the basis of any such indemnification claim. In the
event of a dispute with respect to the indemnification claim, the parties shall
proceed to arbitration, which arbitration shall not affect Lessee's right of
offset and shall be binding on both parties.
15. Quiet Enjoyment - Lessor covenants that the said Lessee, on paying all
lease payments required to be paid by Lessee, and performing the other covenants
and undertakings by the Lessee to be performed, shall and may peaceably have and
enjoy said Leased Premises for the term aforesaid in accordance with the terms
of this Lease.
16. Successors and Assigns - All rights and liabilities herein given to, or
imposed upon, the respective parties hereto shall extend to and bind the
respective successors and assigns of said parties herewith.
-8-
17. Notices - Any notice to be given pursuant to this Lease shall be
sufficient if given by a writing, delivered by hand or deposited in the United
States mail, certified mail or registered mail, postage prepaid and addressed as
follows:
If to Lessor: Waste U.S.A., Inc.
c/o Wilson & White, P.C.
City Center
P.O. Box 159
Montpelier, VT 05601-0159
Attn: President
With a copy to: David Wilson, Esq.
Wilson & White, P.C.
City Center
P.O. Box 159
Montpelier, VT 05601-0159
If to Lessee: New England Waste Services of Vermont, Inc.
25 Greens Hill Lane
Rutland, VT 05701
With a copy to: Catherine Kronk, Esq.
Miller, Eggleston & Rosenberg, Ltd.
150 South Champlain Street
P.O. Box 1489
Burlington, VT 05402-1489
Or to such other person or address as the parties entitled to notice shall have
specified by written notice to the other party given in accordance with the
provisions of this Section.
18. Partial Invalidity - If any term, covenant or condition of this Lease
or the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable, the remainder of this Lease, or the application of
such term, covenant or condition to persons or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby and
each term, covenant or condition of this Lease shall be valid and be enforced to
the fullest extent permitted by law.
ACKNOWLEDGEMENT TO ARBITRATE
----------------------------
WE UNDERSTAND THAT THIS AGREEMENT CONTAINS AN AGREEMENT TO ARBITRATE. AFTER
SIGNING THIS DOCUMENT, WE UNDERSTAND THAT WE WILL NOT BE ABLE TO BRING A LAWSUIT
CONCERNING ANY
-9-
DISPUTE, UNLESS IT INVOLVES A QUESTION OF CONSTITUTIONAL OR CIVIL RIGHTS OR
INJUNCTIVE RELIEF IS SOUGHT. INSTEAD, WE AGREE TO SUBMIT ANY SUCH DISPUTE TO AN
IMPARTIAL ARBITRATOR.
IN WITNESS WHEREOF, the parties have executed this Lease and Option
Agreement under seal effective as of the date first-above written.
IN PRESENCE OF: WASTE U.S.A., INC.
By:
- ------------------------------ ----------------------------------
Duly Authorized Agent
- ------------------------------
NEW ENGLAND WASTE SERVICES
OF VERMONT, INC.
By:
- ------------------------------- ----------------------------------
Duly Authorized Agent
- -------------------------------
STATE OF VERMONT
COUNTY, SS.
- ----------------------------
At _____________________, in said County, this ___ day of ______________,
1995, personally appeared _____________________, duly authorized agent of Waste
U.S.A., Inc., who acknowledged the above instrument, by him sealed and
subscribed, to be his free act and deed and the free act and deed of Waste
U.S.A., Inc.
Before me,
----------------------------------
Notary Public
Commission Expires
----------------
STATE OF VERMONT
COUNTY, SS.
- ----------------------------
At _____________________, in said County, this ___ day of ______________,
1995, personally appeared _____________________, duly authorized agent of New
England Waste Services of Vermont, Inc., who acknowledged the above instrument,
by him sealed and subscribed, to be his free act and deed and the free act and
deed of New England Waste Services of Vermont, Inc.
Before me,
----------------------------------
Notary Public
Commission Expires
----------------
-10-
EXHIBIT A
Being all and the same lands and premises conveyed to New England
Waste Services of Vermont, Inc. by Warranty Deed of Waste U.S.A., Inc., dated
January 25, 1995, of record in Volume __ at Page ___ of the Coventry Land
Records, more particularly described as follows:
PARCEL 1:
- ---------
Being a parcel of land consisting of 276 acres, more or less, and being all
and the same lands and premises conveyed to Waste U.S.A., Inc. by Warranty Deed
of Charles H. Nadeau and Myrna R. Nadeau dated October 24, 1989, of record in
Volume 29 at Page 193 of the Coventry Land Records.
PARCEL 2:
- ---------
Being a parcel of land consisting of 41 acres, more or less, and being all
and the same lands and premises conveyed to Waste U.S.A., Inc. by Warranty Deed
of Leslie J. Joseph dated May 22, 1992, of record in Volume 31 at Page 101 of
the Coventry Land Records.
PARCEL 3:
- ---------
Being a parcel of land consisting of 114.8 acres, more or less, and being
all and the same lands and premises conveyed to Waste U.S.A., Inc. by Warranty
Deed of Leslie J. Joseph dated May 22, 1992, of record in Volume 31 at Page 99
of the Coventry Land Records.
PARCEL 4:
- ---------
Being Lots 1, 2, 3, 4 and 5, and being all and the same lands and premises
conveyed to Waste U.S.A., Inc. by Warranty Deeds of Charles H. Nadeau and Myrna
R. Nadeau dated October 24, 1989, of record in Volume 29 at Pages 195 through
202 of the Coventry Land Records EXCEPT a parcel of land containing 8.9 acres,
more or less, conveyed by Waste U.S.A., Inc. to Leslie J. Joseph dated October
1, 1993, of record in Volume 31 at Page 509 of the Coventry Land Records.
PARCEL 5:
- ---------
Being all and the same lands and premises conveyed to Waste U.S.A., Inc. by
Warranty Deed of Therese B. Gervais dated January 24, 1995, of record in Volume
__ at Page ___ of the Coventry Land Records. Also being all and the same lands
and premises conveyed to Therese B. Gervais by Warranty Deed of Mary Lou Duff
dated November 2, 1993, of record in Volume 31 at Page 499 of the Coventry Land
Records.
-12-
Execution Copy #1
CONSULTING AND NON-COMPETITION AGREEMENT
----------------------------------------
THIS CONSULTING AND NON-COMPETITION AGREEMENT (the "Agreement"), made this
____ day of January, 1997, is entered into by Casella Waste Management of New
York, Inc., a New York corporation with its principal place of business at 25
Greens Hill Lane, Rutland, Vermont (together with its affiliates, the
"Company"), and Kenneth H. Mead, residing at 1669 N.W. 114th Loop, Ocala, FL
(the "Consultant").
INTRODUCTION
------------
As of the date hereof, the Company and an affiliated corporation have
acquired the assets of several corporations of which the Consultant was the sole
stockholder. The Consultant acknowledges that the promises set forth in this
Agreement are critical in enabling the Company to enhance the value so acquired
by the Company. Accordingly, the Company desires to retain the services of the
Consultant, and the Consultant desires to perform certain services for the
Company, on the terms set forth herein. In consideration of the mutual covenants
and promises contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the parties hereto,
the parties agree as follows:
1. Services. The Consultant agrees to perform such consulting, advisory and
related services to and for the Company as may be reasonably requested from time
to time by the Company, including, but not limited to, identifying for the
Company potential acquisitions of solid waste hauling companies and assisting
the Company in identifying and acquiring lined landfills. During the
Consultation Period (as defined below), the Consultant shall not engage in any
activity that may reasonably be believed by the Company to constitute a conflict
of interest with the Company.
2. Term. This Agreement shall commence on the date hereof and shall
continue until the fifth anniversary of the date hereof (such period being
referred to as the "Consultation Period"), unless sooner terminated in
accordance with the provisions of Section 4.
3. Compensation.
3.1 Reimbursement of Expenses. The Company shall reimburse the
Consultant for all reasonable and necessary expenses incurred or paid by the
Consultant in connection with, or related to, the performance of his services
under this Agreement (provided that the same shall have been approved in writing
by the Company in advance). The Consultant shall submit to the Company itemized
monthly statements, in a form satisfactory to the Company, of such expenses
incurred in the previous month. The Company shall pay to the Consultant amounts
shown on each such statement within 30 days after receipt thereof.
3.2 Benefits. During the Consultation Period, the Company shall (i)
maintain the Consultant's existing $1,000,000 term life insurance policy (No.
[policy number] with [name of insurer] and (ii) provide the Consultant with
health insurance coverage consistent with the coverage currently provided by the
Company to its employees generally or a cash payment equal to the amount paid as
of the date of this Agreement by the Company to Blue Cross/Blue Shield for
family coverage under the Blue Cross/Blue Shield plan.
3.3 Solid Waste Acquisition Fees. The Company shall pay the Consultant
the fee set forth in this paragraph for any Eligible Solid Waste Hauling
Businesses within Chemung, Broome or Cortland, New York counties (the "Market
Area") acquired by the Company during the Consultation Period with the
Consultant's active assistance. The Consultant shall be considered to have
provided "active assistance" for purposes of this paragraph only if the
Consultant initiates contact between the Company and the principal owners of
such business (but only if the Company first authorizes such contact) and the
Consultant provides such assistance to the Company in connection with such
acquisition as the Company has reasonably requested. The fee payable to the
Consultant pursuant to this paragraph shall be equal to the average monthly net
revenue (defined as gross revenue less disposal costs) of such acquired business
during the twelve full calendar months immediately preceding its acquisition by
the Company. The Company hereby agrees to pay the Consultant a fee in the amount
of $231,000 for the active assistance provided by the Consultant in connection
with the acquisition by the Company of Wade Trucking, Inc. (subject to the
Company actually closing such acquisition), and the parties hereto agree that
such payment shall be in lieu of any other payment under this Section 3.4.
Notwithstanding the foregoing, the Company shall have no obligation to acquire
any solid waste hauling business, and shall have no liability to the Consultant
for its failure to do so. For purposes hereof, an Eligible Solid Waste Hauling
Business shall mean any of the companies listed on Exhibit 3.3 attached hereto,
or such other companies as to which the Company and the Consultant may
subsequently agree in writing.
3.4 Landfill Development Fees. The Company shall pay the Consultant a
fee of $500,000 for any Eligible Lined Landfill within the Market Area acquired
and permitted by the Company during the Consultation Period with the
Consultant's active assistance. The Consultant shall be considered to have
provided "active assistance" for purposes of this paragraph only if the
Consultant has provided
-2-
such assistance to the Company in connection with such acquisition as the
Company has reasonably requested. Notwithstanding the foregoing, the Company
shall have no obligation to acquire any lined landfill, and shall have no
liability to the Consultant for its failure to do so. For purposes hereof, an
Eligible Lined Landfill shall mean any of the landfills listed on Exhibit 3.4
attached hereto, or such other landfills as to which the Company and the
Consultant may subsequently agree in writing.
4. Termination.
4.1 Termination for breach. In the event of a material breach of
Section 5 or Section 6 of this Agreement, the Company may terminate this
Agreement immediately upon written notice to the Consultant.
4.2 Termination on Death or Disability. The Company may terminate this
Agreement thirty (30) days after the death or disability of the Consultant. As
used in this Agreement, the term "disability" shall mean the inability of the
Consultant, due to a physical or mental disability, for a period of 90 days,
whether or not consecutive, during any 360-day period to perform the services
contemplated under this Agreement. A determination of disability shall be made
by a physician satisfactory to both the Consultant and the Company; provided
that if the Consultant and the Company do not agree on a physician, the Company
and the Consultant shall each select a physician and these two together shall
select a third physician, whose determination as to disability shall be binding
on all parties.
4.3 Effect of Termination for breach. In the event this Agreement is
terminated pursuant to Section 4.1, no further payments shall be made under this
Agreement to the Consultant, and the Consultant shall repay to the Company a pro
rata portion (based on the actual date of termination) of the amounts paid to
the Consultant pursuant to Section 3.1 at the beginning of the current contract
year, in addition to any liability the Consultant may have on account of such
breach.
5. Non-Compete.
(a) During the period from the date hereof until the fifth anniversary
of the date hereof, the Consultant will not directly or indirectly: (i) as an
individual proprietor, partner, stockholder, officer, employee, consultant,
director, joint venturer, investor, lender, or in any other capacity whatsoever
(other than as the holder of not more than one percent (1%) of the total
outstanding stock of a publicly held company), engage, within the states of New
York, Pennsylvania, Vermont, New Hampshire, Maine or Massachusetts, in any
aspect of the solid waste management business or in any other business engaged
in by the Company during the Consultation Period; or (ii) recruit, solicit or
induce, or attempt to induce, any employee or employees of the Company to
terminate their employment with, or
-3-
otherwise cease their relationship with, the Company; or (iii) solicit, divert
or take away, or attempt to divert or to take away, the business or patronage of
any of the clients, customers or accounts, or prospective clients, customers or
accounts, of the Company which were contacted, solicited or served by the
Consultant pursuant to the Agreement.
(b) If any restriction set forth in this Section 5 is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
(c) In consideration of the Consultant's agreements set forth in this
Section 5, and provided that the Consultant is in compliance with the terms
hereof, the Company agrees to pay the Consultant the following: The Company
shall pay the Consultant the amount of $200,000 on each of the first and second
anniversaries of the date of this Agreement and $100,000 on each of the third
and fourth anniversaries of the date of this Agreement.
6. Proprietary Information.
6.1 Proprietary Information.
(a) The Consultant acknowledges that his relationship with the
Company is one of high trust and confidence and that in the course of his
service to the Company he will have access to and contact with Proprietary
Information. The Consultant agrees that he will not, during the Consultation
Period or at any time thereafter, disclose to others, or use for his benefit or
the benefit of others, any Proprietary Information.
(b) For purposes of this Agreement, Proprietary Information shall
mean, by way of illustration and not limitation, all information (whether or not
patentable and whether or not copyrightable) owned, possessed or used by the
Company, including, without limitation, any invention, formula, vendor
information, customer information, apparatus, equipment, trade secret, process,
research, report, technical data, know-how, computer program, software, software
documentation, hardware design, technology, marketing or business plan,
forecast, unpublished financial statement, budget, license, price, cost and
employee list that is communicated to, learned of, developed or otherwise
acquired by the Consultant in the course of his service as a consultant to the
Company or previously in the course of his service as an employee or stockholder
of any entities acquired by the Company.
-4-
(c) The Consultant's obligations under this Section 6.1 shall not
apply to any information that (i) is or becomes known to the general public
under circumstances involving no breach by the Consultant or others of the terms
of this Section 6.1, (ii) is generally disclosed to third parties by the Company
without restriction on such third parties, or (iii) is approved for release by
written authorization of the Board of Directors of the Company.
(d) Upon termination of this Agreement or at any other time upon
request by the Company, the Consultant shall promptly deliver to the Company all
records, files, memoranda, notes, designs, data, reports, price lists, customer
lists, drawings, plans, computer programs, software, software documentation,
sketches and other documents (and all copies or reproductions of such materials)
relating to the business of the Company.
(e) The Consultant represents that his retention as a consultant
with the Company and his performance under this Agreement does not, and shall
not, breach any agreement that obligates him to keep in confidence any trade
secrets or confidential or proprietary information of his or of any other party
or to refrain from competing, directly or indirectly, with the business of any
other party. The Consultant shall not disclose to the Company any trade secrets
or confidential or proprietary information of any other party.
(f) The Consultant acknowledges that the Company from time to
time may have agreements with other persons (including governmental agencies)
that impose obligations or restrictions on the Company regarding the
confidential nature of such work under such agreements. The Consultant agrees to
be bound by all such obligations and restrictions that are known to him and to
take all action necessary to discharge the obligations of the Company under such
agreements.
6.2 Remedies. The Consultant acknowledges that any breach of the
provisions of Section 5 or this Section 6 shall result in serious and
irreparable injury to the Company for which the Company cannot be adequately
compensated by monetary damages alone. The Consultant agrees, therefore, that,
in addition to any other remedy it may have, the Company shall be entitled to
enforce the specific performance of this Agreement by the Consultant and to seek
both temporary and permanent injunctive relief (to the extent permitted by law)
without the necessity of proving actual damages.
7. Survival. The provisions of Sections 5 and 6 shall survive the
termination of this Agreement.
8. Cooperation. The Consultant shall cooperate with the Company's
personnel, shall not interfere with the conduct of the Company's business and
shall
-5-
observe all rules, regulations and security requirements of the Company
concerning the safety of persons and property.
9. Independent Contractor Status. The Consultant shall perform all services
under this Agreement as an "independent contractor" and not as an employee or
agent of the Company. The Consultant is not authorized to assume or create any
obligation or responsibility, express or implied, on behalf of, or in the name
of, the Company or to bind the Company in any manner. The Consultant agrees to
indemnify the Company and hold the Company harmless for any liability incurred
by the Company as a result of the Consultant's breach of the preceding sentence.
10. Notices. All notices required or permitted under this Agreement shall
be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 11.
11. Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.
12. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
13. Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Consultant.
14. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Vermont.
15. Successors and Assigns. This Agreement shall be binding upon, and inure
to the benefit of, both parties and their respective successors and assigns,
including any corporation with which, or into which, the Company may be merged
or which may succeed to its assets or business, provided, however, that the
obligations of the Consultant are personal and shall not be assigned by him.
16. Miscellaneous.
16.1 No delay or Omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver
-6-
or consent given by the Company on any one occasion shall be effective only in
that instance and shall not be construed as a bar or waiver of any right on any
other occasion.
16.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
16.3 In the event that any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
CASELLA WASTE SYSTEMS, INC.
By:
------------------------------------
Title:
--------------------------------
CONSULTANT
--------------------------------------
Kenneth H. Mead
-7-
Exhibit 3.3
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Eligible Solid Waste Hauling Businesses
Rainbow Rubbish (Moravia, NY)
Allied/Laidlaw (New York holdings)
San Piedro Trucking (Seneca Falls)
Burt Adams (Binghamton)
Joseph Raite (Syracuse)
-8-
Exhibit 3.4
-----------
Eligible Lined Landfills
Chemung County
Steubuen County
Broome County
Cortland County
-9-
October 19, 1994
James T. Cronin, Vice President
National Waste Industries, Inc.
625 Liberty Avenue, Suite 3100
Pittsburgh, PA 15222
RE: Casella Waste Systems, Inc. -- Issuance of Shares to National Waste
Industries, Inc.-- For Services Rendered
Dear Jim:
There accompanies this letter the following: (i) Share Certificate A10 of
Casella Waste Systems, Inc. issued in favor of National Waste Industries, Inc.
for 100,000 of its Class A Common Stock (the Consumat Sanco shares); and (ii)
Share Certificate A11 of Casella Waste Systems, Inc. issued in favor of National
Waste Industries, Inc. for 350,000 of its Class A common stock (the Waste U.S.A.
shares). We are pleased with the assistance which you have provided to us in
connection with the acquisition. The shares have been allocated to each
transaction in the manner set forth above.
The shares have been issued to you by us based upon the following
understandings:
1. Each share shall be considered as having a current fair market value
of $4.60.
2. The shares are being issued to you as full payment for all of the
services rendered by National Waste Industries, Inc. upon behalf of Casella
Waste Systems, Inc., and its subsidiaries, to this date, including without
limitation those in connection with the purchase of the shares of Consumat
Sanco, Inc. and the assets which constitute the so-called Waste U.S.A. landfill,
all as located in Coventry, Vermont.
3. All of the shares being delivered to you concurrent herewith have been
duly authorized by all appropriate corporate action and constitute validly
issued and outstanding shares of common stock of Casella Waste Systems, Inc. We
understand that you are acquiring the shares for your own account and for the
purpose of investment and not with a view to or for sale to any outside third
party in connection with any distribution thereof.
4. By your acceptance of these shares you further represent to us that you
understand that: (i) the shares have not been registered under the Securities
Act of 1933 by reason of their issuance of a transaction exempt from
registration requirements of the Securities Act pursuant to Section 4(2)
thereof; (ii) the shares must be held indefinitely unless a subsequent
disposition thereof is registered under the Securities Act of 1933 or is exempt
from such registration; (iii) the shares will bear a legend to such effect in
the manner set forth below; and (iv) Casella Waste Systems,
James T. Cronin
October 19, 1994
Page 2
Inc. will make a notation on its transfer books to such effect. By your
acceptance of these shares, National Waste Industries, Inc. further represents
that the exemptions from registration afforded by Rule 144 and Rule 144A under
the Securities Act of 1933 depend upon the satisfaction of various conditions
and that, if applicable, said rules afford the basis of sales of the shares in
limited amounts under certain conditions. The legend which has been placed on
the shares reads as follows:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 NOR UNDER APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED
UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
5. Under the terms of the financing which Casella Waste Systems, Inc. has
entered into with its other venture capital investors, Casella Waste Systems,
Inc. has entered into a Stockholders' Agreement, a copy of which accompanies
this letter. As part of that Stockholders' Agreement, each share certificate of
Casella Waste Systems, Inc. bears a legend which provides as follows:
THE SALE, TRANSFER OR ENCUMBRANCE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF AN AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT, DATED AS OF MAY 25, 1994,
AMONG CASELLA WASTE SYSTEMS, INC. AND CERTAIN
HOLDERS OF ITS OUTSTANDING CAPITAL STOCK AND RIGHTS
TO ACQUIRE CAPITAL STOCK. COPIES OF SUCH AGREEMENT
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST IF MADE
BY THE HOLDER OF THE RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF CASELLA WASTE SYSTEMS, INC.
James T. Cronin
October 19, 1994
Page 3
If you are in Agreement with the foregoing, please so indicate by signing the
enclosed counterpart of this letter, and returning such counterpart to Casella
Waste Systems, Inc. Thereupon, this letter shall become a binding agreement upon
both of us.
Sincerely,
CASELLA WASTE SYSTEMS, INC.
/s/ John W. Casella
- ---------------------------
John W. Casella
President
Read, accepted and agreed to this 19th day of October, 1994.
NATIONAL WASTE INDUSTRIES, INC.
By:
--------------------------------
Its Duly Authorized Agent
Exhibit 21
List of Subsidiaries
--------------------
Name Jurisdiction of Incorporation
- ---- -----------------------------
Casella Waste Systems, Inc. Delaware
Casella Waste Management, Inc. Vermont
New England Waste Services, Inc. Vermont
New England Waste Services of Vermont, Inc. Vermont
Sunderland Waste Management, Inc. Vermont
Newbury Waste Management, Inc. Vermont
Bristol Waste Management, Inc. Vermont
North Country Environmental Services, Inc. Virginia
Forest Acquisitions, Inc. New Hampshire
Sawyer Environmental Services, Inc. Maine
Sawyer Environmental Recovery Facilities, Inc. Maine
Hiram Hollow Regeneration Corp. New York
Casella T.I.R.E.S., Inc. Maine
Casella Waste Management of N.Y., Inc. New York
New England Waste Services of N.Y., Inc. New York
Casella Waste Management of Pennsylvania, Inc. Pennsylvania
North Country Composting Services, Inc. New Hampshire
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
and to all references to our Firm included in or made a part of this
prospectus.
Arthur Andersen LLP
Boston, Massachusetts
August 7, 1997
