Exhibit
No. Description
- -------- -------------------------------------------------------------------------------
+10.23 Lease and Option Agreement by and between Waste U.S.A., Inc. and New England
Waste Services of Vermont, Inc., dated December 14, 1995.
+10.24 Consulting and Non-Competition Agreement between the Registrant and
Kenneth H. Mead, dated January 23, 1997.
+10.25 Issuance of Shares by the Registrant to National Waste Industries, Inc., dated
October 19, 1994.
*11 Computation of earnings per common share.
21 Subsidiaries of the Registrant.
*23.1 Consent of Hale and Dorr LLP (included in Exhibit 5).
23.2 Consent of Arthur Andersen LLP.
+24 Power of Attorney.
- ----------
* To be filed by amendment.
+ Previously Filed.
(b) Financial Statement Schedules
All other schedules have been omitted because they are not required or because
the required information is given in the Consolidated Financial Statements or
Notes thereto.
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CASELLA WASTE SYSTEMS, INC.
CASELLA WASTE SYSTEMS, INC. (hereinafter called the "Corporation"),
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware, does hereby certify as follows:
At a meeting of the Board of Directors of the Corporation a resolution
was duly adopted, pursuant to Sections 141 and 242 of the General Corporation
Law of the State of Delaware, setting forth an amendment to the Certificate of
Incorporation of the Corporation and declaring said amendment to be advisable.
The stockholders of the Corporation duly approved said proposed amendment by
written consent in accordance with Sections 228 and 242 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 said
amendment. The resolution setting forth the amendment is as follows:
"RESOLVED: That the first paragraph of Article FOURTH of the Certificate
of Incorporation of the Corporation be and hereby is deleted and the following
is inserted in lieu thereof:
"FOURTH. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is (i) 30,000,000 shares of Class A
Common Stock, $0.01 par value per share ("Class A Common Stock"), (ii) 1,000,000
shares of Class B Common Stock, $0.01 par value per share ("Class B Common
Stock; and collectively with the Class A Common Stock, the "Common Stock") and
(iii) 5,941,250 shares of Preferred Stock, $0.01 par value per share ("Preferred
Stock")."
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Certificate of Amendment to be signed by its
____________ this ____ day of ___________, 1997.
CASELLA WASTE SYSTEMS, INC.
By:________________________________
To be filed with the State of Delaware prior to the Closing
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
of
CASELLA WASTE SYSTEMS, INC.
CASELLA WASTE SYSTEMS, INC., a corporation organized and existing under the
laws of the State of Delaware (hereinafter called the "Corporation"), hereby
certifies pursuant to Sections 242 and 245 of the General Corporation Law of the
State of Delaware (the "General Corporation Law") that (i) the Corporation's
name is Casella Waste Systems, Inc. and it was originally incorporated under
such name; (ii) the Certificate of Incorporation of the Corporation was
originally filed with the Secretary of State of Delaware on March 1, 1993; and
(iii) this Amended and Restated Certificate of Incorporation amends and restates
the Certificate of Incorporation of the Corporation, as previously amended and
restated on December 26, 1995 and now in effect. This Amended and Restated
Certificate of Incorporation was adopted by the Board of Directors and
stockholders of the Corporation entitled to vote in respect thereof in the
manner and by the vote prescribed by Section 242 of the General Corporation Law
to read as follows:
FIRST: The name of the Corporation is Casella Waste Systems, Inc.
SECOND: The registered office of the Corporation in the State of Delaware
is located at 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 purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is (a) 30,000,000 shares of Class A
Common Stock, $0.01 par value per share ("Class A Common Stock"), (b) 1,000,000
shares of Class B Common Stock, $0.01 par value per share ("Class B Common
Stock", and collectively with the Class A Common Stock, the "Common Stock"), and
(c) 1,000,000 shares of Preferred Stock, $0.01 par value per share ("Preferred
Stock"), issuable in one or more series as provided herein. The number of
authorized shares of any class or classes of capital stock of the Corporation
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 voting
power of the stock of the Corporation entitled to vote generally in the election
of directors irrespective of the provisions of Section
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242(b)(2) of the General Corporation Law or any corresponding provision
hereinafter enacted.
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.
4.1. COMMON STOCK.
All shares of Common Stock will be identical in all respects and will
entitle the holders thereof to the same rights and privileges, except as
otherwise provided herein.
(a) Voting Rights. The holders of shares of Common Stock shall have the
following voting rights:
(i) Each share of Class A Common Stock shall entitle the holder
thereof to one vote in person or by proxy on all matters submitted to a vote of
the stockholders of the Corporation.
(ii) Each share of Class B Common Stock shall entitle the holder
thereof to ten votes in person or by proxy on all matters submitted to a vote of
the stockholders of the Corporation.
(iii) Except for the election and the removal of the Class A Director
as described below in Article ELEVENTH, and as otherwise required by applicable
law, the holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
(b) Dividends and Distributions. Subject to the preferences applicable to
Preferred Stock outstanding at any time, the holders of shares of Common Stock
shall be entitled to receive such dividends and other distributions in cash,
property or shares of stock of the Corporation as may be declared thereon by the
Board of Directors from time to time out of assets or funds of the Corporation
legally available therefor; provided, that, subject to the provisions of this
Section 4.1(b), the Corporation shall not pay dividends or make distributions to
any holders of any class of Common Stock unless simultaneously with such
dividend or distribution, as the case may be, the Company makes the same
dividend or distribution with respect to each outstanding share of Common Stock
regardless of class. In the case of dividends or other distributions payable in
Class A Common Stock or Class B Common Stock, including distributions pursuant
to stock splits or divisions of Class A Common Stock or Class B Common Stock,
only shares of Class A Common Stock shall be distributed with respect to Class A
Common Stock, and only shares of Class B Common Stock shall be distributed with
respect to Class B Common Stock. Whenever a dividend or
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distribution, including distributions pursuant to stock splits or divisions of
the Common Stock, is payable in shares of Class A Common Stock or Class B Common
Stock, the number of shares of each class of Common Stock payable per share of
such class of Common Stock shall be equal in number. In the case of dividends or
other distributions consisting of other voting securities of the Corporation or
of voting securities of any corporation which is a wholly-owned subsidiary of
the Corporation, the Corporation shall declare and pay such dividends in two
separate classes of such voting securities, identical in all respects, except
that (i) the voting rights of each such security paid to the holders of Class A
Common Stock shall be one-tenth of the voting rights of each such security paid
to the holders of Class B Common Stock, (ii) such security paid to the holders
of Class B Common Stock shall convert into the security paid to the holders of
Class A Common Stock upon the same terms and conditions applicable to the
conversion of Class B Common Stock into Class A Common Stock and shall have the
same restrictions on transfer and ownership applicable to the transfer and
ownership of the Class B Common Stock, and (iii) with respect only to dividends
or other distributions of voting securities of any corporation which is a
wholly-owned subsidiary of the Company, the respective voting rights of each
such security paid to holders of Class A Common Stock and Class B Common Stock
with respect to the election of directors shall otherwise be as comparable as is
practicable to those of the Class A Common Stock and Class B Common Stock,
respectively. In the case of dividends or other distributions consisting of
securities convertible into, or exchangeable for, voting securities of the
Corporation or voting securities of another corporation which is a wholly-owned
subsidiary of the corporation, the Corporation shall provide that such
convertible or exchangeable securities and the underlying securities be
identical in all respects (including, without limitation, the conversion or
exchange rate), except that (i) the voting rights of each security underlying
the convertible or exchangeable security paid to the holders of Class A Common
Stock shall be one-tenth of the voting rights of each security underlying the
convertible or exchangeable security paid to the holders of the Class B Common
Stock, and (ii) such underlying securities paid to the holders of Class B Common
Stock shall convert into the underlying securities paid to the holders of Class
A Common Stock upon the same terms and conditions applicable to the conversion
of Class B Common Stock into Class A Common Stock and shall have the same
restrictions on transfer and ownership applicable to the transfer and ownership
of the Class B Common Stock.
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(c) Conversion of Class B Common Stock.
(i) Each holder of Class B Common Stock shall be entitled to convert,
at any time and from time to time, any or all of the shares of such holder's
Class B Common Stock on a one-for-one basis, into the same number of fully paid
and non-assessable shares of Class A Common Stock. Such right shall be exercised
by the surrender of the certificate or certificates representing the shares of
Class B Common Stock to be converted to the Corporation at any time during
normal business hours at the principal executive offices of the Corporation or
at the office of the Transfer Agent, accompanied by a written notice of the
holder of such shares stating that such holder desires to convert such shares,
or a stated number of the shares represented by such certificate or
certificates, into an equal number of shares of the Class A Common Stock, and
(if so required by the Corporation or the Transfer Agent) by instruments of
transfer, in form satisfactory to the Corporation and to the Transfer Agent,
duly executed by such holder or such holder's duly authorized attorney, and
transfer tax stamps or funds therefor, if required pursuant to Section
4.1(c)(vi).
(ii) If, on the record date for any meeting of stockholders of the
Corporation, the number of shares of Common Stock (including Class A Common
Stock and Class B Common Stock) outstanding and held by all Class B Permitted
Holders (as defined in Section 4.1(i)) in the aggregate constitutes less than
10% of the aggregate number of shares of Common Stock outstanding immediately
upon the initial closing of the Company's initial public offering contemplated
by Registration Statement No. 333-33135 (adjusted for stock splits, stock
dividends, reclassifications, recapitalizations and reverse stock splits and
similar transactions), each share of Class B Common Stock then issued or
outstanding shall thereupon be converted automatically as of such date into one
(1) fully paid and non-assessable share of Class A Common Stock. Upon the making
of such determination, notice of such automatic conversion shall be given by the
Corporation by means of a press release and written notice to all holders of
Class B Common Stock, and shall be given as soon as practicable, and the
Secretary of the Corporation shall be instructed to, and shall promptly request
from each holder of Class B Common Stock that each such holder promptly deliver,
and each such holder shall promptly deliver, the certificate representing each
such share of Class B Common Stock to the Corporation for exchange hereunder,
together with instruments of transfer, in form satisfactory to the Corporation
and Transfer Agent, duly executed by such holder or such holder's duly
authorized attorney, and together with transfer tax stamps or funds therefor, if
required pursuant to Section 4.1(c)(vi).
(iii) As promptly as practicable following the surrender for
conversion of a certificate representing shares of Class B Common Stock in the
manner provided in Section 4.1(c)(i) or Section 4.1(c)(ii), as applicable, and
the payment in cash of any amount required by the provisions of Section
4.1(c)(vi), the Corporation will deliver
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or cause to be delivered at the office of the Transfer Agent, a certificate or
certificates representing the number of full shares of Class A Common Stock
issuable upon such conversion, issued in such name or names as such holder may
direct. Such conversion shall be deemed to have been effected immediately prior
to the close of business on the date of the surrender of the certificate or
certificates representing shares of Class B Common Stock. Upon the date any such
conversion is made or effected, all rights of the holder of such shares as such
holder shall cease, and the person or persons in whose name or names the
certificates or certificates representing the shares of Class A Common Stock are
to be issued shall be treated for all purposes as having become the record
holder or holders of such shares of Class A Common Stock; provided, however,
that if any such surrender and payment occurs on any date when the stock
transfer books of the Corporation shall be closed, the person or persons in
whose name or names the certificate or certificates representing shares of Class
A Common Stock are to be issued shall be deemed the record holder or holders
thereof for all purposes immediately prior to the close of business on the next
succeeding day on which the stock transfer books are open.
(iv) In the event of a reclassification or other similar transaction
as a result of which the shares of Class A Common Stock are converted into
another security, then a holder of Class B Common Stock shall be entitled to
receive upon conversion the amount of such security that such holder would have
received if such conversion had occurred immediately prior to the record date of
such reclassification or other similar transaction. No adjustments in respect of
dividends shall be made upon the conversion of any share of Class B Common
Stock; provided, however, that if a share shall be converted subsequent to the
record date for the payment of a dividend or other distribution on shares of
Class B Common Stock but prior to such payment, then the registered holder of
such share at the close of business on such record date shall be entitled to
receive the dividend or other distribution payable on such share on such date
notwithstanding the conversion thereof or the Corporation's default in payment
of the dividend due on such date.
(v) The Corporation covenants that it will at all times reserve and
keep available out of its authorized but unissued shares of Class A Common
Stock, solely for the purpose of issuance upon conversion of the outstanding
shares of Class B Common Stock, such number of shares of Class A Common Stock
that shall be issuable upon the conversion of all such outstanding shares of
Class B Common Stock; provided that nothing contained herein shall be construed
to preclude the Corporation from satisfying its obligations in respect of the
conversion of the outstanding shares of Class B Common Stock by delivery of
purchased shares of Class A Common Stock which are held in the treasury of the
Corporation. The Corporation covenants that if any shares of Class A Common
Stock require registration with or approval of any governmental authority under
any federal or state law before such shares of Class A Common stock may be
issued upon conversion, the Corporation will cause such shares to be duly
registered or approved,
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as the case may be. The Corporation will use its best efforts to list the shares
of Class A Common Stock required to be delivered upon conversion prior to such
delivery upon each national securities exchange upon which the outstanding Class
A Common Stock is listed at the time of such delivery. The Corporation covenants
that all shares of Class A Common Stock that shall be issued upon conversion of
the shares of Class B Common Stock will, upon issue, be validly issued, fully
paid and non-assessable.
(vi) The issuance of certificates for shares of Class A Common Stock
upon conversion of shares of Class B Common Stock shall be made without charge
to the holders of such shares for any stamp or other similar tax in respect of
such issuance; provided, however, that, if any such certificate is to be issued
in a name other than that of the holder of the share or shares of Class B Common
Stock converted, then the person or persons requesting the issuance thereof
shall pay to the Corporation the amount of any tax that may be payable in
respect of any transfer involved in such issuance or shall establish to the
satisfaction of the Corporation that such tax has been paid.
(vii) Shares of Class B Common Stock that are converted into shares of
Class A Common Stock as provided herein shall continue to be authorized shares
of Class B Common Stock and available for reissue by the Corporation; provided,
however, that no shares of Class B Common Stock shall be reissued except as
expressly permitted by Sections 4.1(b) and 4.1(d) of this Amended and Restated
Certificate of Incorporation.
(d) Stock Splits. The Corporation shall not in any manner subdivide (by any
stock split, stock dividend, reclassification, recapitalization or otherwise) or
combine (by reverse stock split, reclassification, recapitalization or
otherwise) the outstanding shares of one class of Common Stock unless the
outstanding shares of all classes of Common Stock shall be proportionately
subdivided or combined.
(e) Options, Rights or Warrants.
(i) The Corporation shall not make any offering of options, rights or
warrants to subscribe for shares of Class B Common Stock, except that if the
Corporation makes an offering of options, rights or warrants to subscribe for
shares of any other class or classes of capital stock (other than Class B Common
Stock) to all holders of a class of Common Stock then the Corporation shall
simultaneously make an identical offering to all holders of the other classes of
Common Stock other than to any class of Common Stock the holders of which,
voting as a separate class, determine that such offering need not be made to
such class. All such options, rights or warrants offerings shall offer the
respective holders of Class A Common Stock and Class B Common Stock the right to
subscribe at the same rate per share.
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(ii) Subject to Section 4.1(c)(iv) and 4.1(e)(i), the Corporation
shall have the power to create and issue, whether or not in connection with the
issue and sale of any shares of stock or other securities of the Corporation,
rights or options entitling the holders thereof to purchase from the Corporation
any shares of its capital stock of any class or classes at the time authorized
(other than Class B Common Stock), such rights or options to have such terms and
conditions, and to be evidenced by or in such instrument or instruments, as
shall be approved by the Board of Directors.
(f) Mergers, Consolidation, Etc. In the event that the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then, and in such event, the shares
of each class of Common Stock shall be exchanged for or changed into either (1)
the same amount of stock, securities, cash and/or any other property, as the
case may be, into which or for which each share of any other class of Common
Stock is exchanged or changed; provided, however, that if shares of Common Stock
are exchanged for or changed into shares of capital stock, such shares so
exchanged for or changed into may differ to the extent and only to the extent
that the Class A Common Stock and the Class B Common Stock differ as provided
herein or (2) if holders of each class of Common Stock are to receive different
distributions of stock, securities, cash and/or any other property, an amount of
stock, securities, cash and/or property per share having a value, as determined
by an independent investment banking firm of national reputation selected by the
Board of Directors, equal to the value per share into which or for which each
share of any other class of Common Stock is exchanged or changed.
(g) Liquidation Rights. In the event of any dissolution, liquidation or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
after payment or provision for payment of the debts and other liabilities of the
Corporation and after making provision for the holders of each series of
Preferred Stock, if any, the remaining assets and funds of the Corporation, if
any, shall be divided among and paid ratably to the holders of the shares of the
Class A Common Stock and the Class B Common Stock treated as a single class.
(h) No Preemptive Rights. Except as provided in Section 4.1(e), the holders
of shares of Common Stock are not entitled to any preemptive right to subscribe
for, purchase or receive any part of any new or additional issue of stock of any
class, whether now or hereafter authorized, or of bonds, debentures or other
securities convertible into or exchangeable for stock.
(i) Transfer of Class B Common Stock.
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(i) No person may, directly or indirectly, sell (whether by
involuntary or judicial sale or otherwise), assign, transfer, grant a security
interest in, pledge, encumber, hypothecate, give (by bequest, gift or
appointment) or otherwise (voluntarily or by operation of law) dispose of
(collectively, "Transfer") any interest in his, her or its shares of Class B
Common Stock (or in any shares of Class B Common Stock held by such person for
the benefit of or on the behalf of another person) (including, without
limitation, the power to vote or provide a consent with respect to his, her or
its shares of Class B Common Stock by proxy or otherwise, except for proxies
given to any Class B Permitted Holder (as defined below) or to a person
designated by the Board of Directors of the Corporation who is soliciting
proxies on behalf of the Corporation), and the Corporation and the transfer
agent for the Class B Common Stock, if any (the "Class B Transfer Agent"), shall
not register the Transfer of such shares of Class B Common Stock, except to the
Corporation or a Class B Permitted Holder; provided, however, such restrictions
on transfer shall not apply to a merger, consolidation or business combination
of the Corporation with or into another corporation pursuant to which all of the
outstanding shares of each class of Common Stock and Preferred Stock of the
Company is being acquired. Any transfer of Class B Common Stock in violation of
this Section 4.1(i) shall be null and void ab initio, and the Corporation shall
not register such Transfer. For the purposes of this Article Four, a "Class B
Permitted Holder" shall include only the following persons: (i) John W. Casella,
Douglas R. Casella and their respective estates, guardians, conservators or
committees; (ii) the spouses of John W. Casella and Douglas R. Casella and their
respective estates, guardians, conservators or committees; (iii) each descendant
of John W. Casella or Douglas R. Casella (a "Casella Descendant") and their
respective estates, guardians, conservators or committees; (iv) each Family
Controlled Entity (as defined below); and (v) the trustees, in their respective
capacities as such, of each Casella Family Trust (as defined below). The term
"Family Controlled Entity" means (i) any not-for-profit corporation if at least
a majority of its board of directors is composed of John W. Casella, Douglas R.
Casella, the spouse of John W. Casella or Douglas R. Casella and/or Casella
Descendants; (ii) any other corporation if at least a majority of the value of
its outstanding equity is owned by Class B Permitted Holders; (iii) any
partnership if at least a majority of the economic interest of its partnership
interests is owned by Class B Permitted Holders; and (iv) any limited liability
or similar company if at least a majority of the economic interest of the
Company is owned by Class B Permitted Holders. The term "Casella Family Trust"
includes trusts the primary beneficiaries of which are one or more of John W.
Casella, Douglas R. Casella, the spouse of John W. Casella or Douglas R.
Casella, Casella Descendants, the siblings, spouses of Casella Descendants and
their respective estates, guardians, conservators or committees and/or
charitable organizations (collectively, "Casella Beneficiaries"), provided that
if the trust is a wholly charitable trust, at least a majority of the trustees
of such trust consist of John W. Casella, Douglas R. Casella, the spouse of
either John W. Casella or Douglas R. Casella and/or any Class B Permitted
Holder. For purposes of this provision, the primary beneficiaries of a trust
will be deemed to be Casella Beneficiaries if, under the
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maximum exercise of discretion by the trustee in favor of persons who are not
Casella Beneficiaries, the value of the interests of such persons in such trust,
computed actuarially, is 50% or less. The factors and methods prescribed in
section 7520 of the Internal Revenue Code of 1986, as amended, for use in
ascertaining the value of certain interests shall be used in determining a
beneficiary's actuarial interest in a trust for purposes of applying this
provision. For purposes of this provision, the actuarial value of the interest
in a trust of any person in whose favor a testamentary power of appointment may
be exercised shall be deemed to be zero. For purposes of this provision, in the
case of a trust created by a Casella Descendant, the actuarial value of the
interest in such trust of any person who may receive trust property only at the
termination of the trust and then only in the event that, at the termination of
the trust, there are no living issue of such Casella Descendant shall be deemed
to be zero.
(ii) Notwithstanding anything to the contrary set forth herein, any
Class B Permitted Holder may pledge his, her or its shares of Class B Common
Stock to a financial institution pursuant to a bona fide pledge of such shares
as collateral security for indebtedness due to the pledgee; provided, that such
shares shall remain subject to the provisions of this Section 4.1(i). In the
event of foreclosure or other similar action by the pledgee, such pledged shares
of Class B Common Stock may only be transferred to a Class B Permitted Holder or
converted into shares of Class A Common Stock, as the pledgee may elect.
(iii) For purposes of this Section 4.1(i):
(1) the relationship of any person that is derived by or through
legal adoption shall be considered a natural relationship;
(2) a minor who is a descendant of John W. Casella or Douglas R.
Casella and for whom shares of Class B Common Stock are held pursuant to a
Uniform Gifts to Minors Act or similar law shall be considered a Class B
Permitted Holder and the custodian who is the record holder of such shares shall
not be considered the Class B Permitted Holder of such shares;
(3) an incompetent stockholder who is a Class B Permitted Holder
but whose shares are owned or held by a guardian or conservator shall be
considered a Class B Permitted Holder of such shares and such guardian or
conservator who is the holder of such shares shall not be considered the Class B
Permitted Holder of such shares;
(4) unless otherwise specified, the term "person" means and
includes natural persons, corporations, partnerships, unincorporated
associations, firms, joint ventures, trusts and all other entities; and
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(5) except as provided in clauses (2) and (3) above, for purposes
of determining whether the holder of shares of Class B Common Stock is a Class B
Permitted Holder, the record holder of such share shall be considered the
holder; provided, however, that if such record holder is a nominee, the holder
for purposes of determining whether the holder of shares of Class B Common Stock
is a Class B Permitted Holder shall be the first person in the chain of
ownership of such share of Class B Common Stock who is not holding such share
solely as a nominee.
(iv) Each certificate representing shares of Class B Common Stock
shall be endorsed with a legend that states that shares of Class B Common Stock
are not transferable other than to certain transferees and are subject to
certain restrictions as set forth in this Amended and Restated Certificate of
Incorporation filed by the Corporation with the Secretary of State of the State
of Delaware.
(j) Certain Automatic Conversions of Class B Common Stock. Subject to
Section 4.1(i), at such time as a person ceases to be a Class B Permitted
Holder, any and all shares of Class B Common Stock held by such person at such
time shall automatically convert into shares of Class A Common Stock, provided
that no conversion shall occur upon the pledge of a Class B Permitted Holder's
share of Class B Common Stock to a financial institution as contemplated by and
pursuant to Section 4.1(i)(ii).
(k) Restrictions on Issuance. The Corporation shall not issue or sell any
shares of Class B Common Stock or any securities (including, without limitation,
any rights, options, warrants or other securities) convertible, exchangeable or
exercisable into shares of Class B Common Stock to any person that is not a
Class B Permitted Holder. Any issuance or sale of shares of Class B Common Stock
(or securities convertible into, or exchangeable or exercisable for, shares of
Class B Common Stock) in violation of this Section 4.1(k) shall be null and void
ab initio.
4.2. 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
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shares thereof (and by filing a certificate pursuant to the applicable law of
the State of Delaware), 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.
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.
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. 7.1. 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
-11-
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 7.7 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.
7.2. 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
-12-
person is fairly and reasonably entitled to indemnity for such expenses
(including attorneys' fees) which the Court of Chancery of Delaware shall deem
proper.
7.3. 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 7.1 and 7.2, 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.
7.4. 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 7.4. 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
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to which counsel for the Indemnitee shall have reasonably made the conclusion
provided for in clause (ii) above.
7.5. Advance of Expenses. Subject to the provisions of Section 7.6 below,
in the event that the Corporation does not assume the defense pursuant to
Section 7.4 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.
7.6. Procedure for Indemnification. In order to obtain indemnification or
advancement of expenses pursuant to Section 7.1, 7.2, 7.3 or 7.5, the Indemnitee
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 7.1, 7.2 or 7.5
the Corporation determines within such 60-day period that the Indemnitee did not
meet the applicable standard of conduct set forth in Section 7.1 or 7.2, 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.
7.7. 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 7.6. 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
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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 7.6 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.
7.8. 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 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.
7.9. 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.
7.10. 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.
-15-
7.11. 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.
7.12. 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 out of or relating to any actions, transactions or facts
occurring prior to the date of such merger or consolidation.
7.13. 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.
7.14. 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).
7.15. 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: Subject to the terms of any series of Preferred Stock or any other
securities of the Corporation with respect to the voting of shares of such
series or of such other securities, as the case may be, any action required or
permitted to be taken by the stockholders of the Corporation must be effected at
a duly called annual or special meeting of stockholders of the Corporation and
may not be effected by any consent in writing by such stockholders. 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. Subject to
any such terms of any series of Preferred Stock or any such other securities of
the Corporation, special meetings of stockholders of the Corporation may be
called only as provided in the By-laws of the Corporation.
-16-
NINTH: The books of the Corporation may (subject to any statutory
requirements) be kept outside the State of Delaware as may be designated by the
Board of Directors or in the Bylaws of the Corporation.
TENTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by law and this Amended
and Restated Certificate of Incorporation, and all rights conferred upon
stockholders herein are granted subject to this reservation.
ELEVENTH: This Article is inserted for the management of the business and
for the conduct of the affairs of the Corporation, and it is expressly provided
that it is intended to be in furtherance and not in limitation or exclusion of
the powers conferred by the statutes of the State of Delaware.
11.1 Number of Directors. The number of directors which shall constitute
the whole Board of Directors shall be determined by resolution of a majority of
the Board of Directors, but in no event shall be less than three. The number of
directors may be decreased at any time and from time to time 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 the
stockholders by such stockholders as have the right to vote on such election.
Directors need not be stockholders of the corporation.
11.2 Classes of Directors. The Board of Directors shall be and is divided
into three classes: Class I, Class II and Class III. No one class shall have
more than one director more than any other class. If a fraction is contained in
the quotient arrived at by dividing the authorized number of directors by three,
then, if such fraction is one-third, the extra director shall be a member of
Class I and, if such fraction is two-thirds, one of the extra directors shall be
a member of Class I and the other extra director shall be a member of Class II,
unless otherwise provided for from time to time by resolution adopted by a
majority of the Board of Directors. The Class A Director shall be in Class I.
11.3 Election of Directors. The holders of Class A Common Stock, voting
separately as a class, shall be entitled to elect one director (the "Class A
Director"). All other directors shall be elected by the holders of the Class A
Common Stock and Class B Common Stock, if any, voting together as a single
class.
11.4 Terms of Office. Each director shall serve for a term ending on the
date of the third annual meeting following the annual meeting at which such
director was elected; provided, however, that each initial director in Class I
shall serve for a term ending on the date of the annual meeting next following
the end of the Corporation's
-17-
fiscal year ending April 30, 1998; each initial director in Class II shall serve
for a term ending on the date of the annual meeting next following the end of
the Corporation's fiscal year ending April 30, 1999; and each initial director
in Class III shall serve for a term ending on the date of the annual meeting
next following the end of the Corporation's fiscal year ending April 30, 2000.
11.5 Allocation of Directors Among Classes in the Event of Increases or
Decreases in the Number of Directors. In the event of any increase or decrease
in the authorized number of directors, (i) each director then serving as such
shall nevertheless continue as director of the class of which he is a member
until the expiration of his current term or his prior death, retirement or
resignation and (ii) the newly created or eliminated directorships resulting
from such increase or decrease shall be apportioned by the Board of Directors
among the three classes of directors so as to ensure that no one class has more
than one director more than any other class. To the extent possible, consistent
with the foregoing rule, any newly created directorships shall be added to those
classes whose terms of office are to expire at the latest dates following such
allocation, and any newly eliminated directorships shall be subtracted from
those classes whose terms of office are to expire at the earliest dates
following such allocation, unless otherwise provided for from time to time by
resolution adopted by a majority of the directors then in office, although less
than a quorum.
11.6. Tenure. Notwithstanding any provisions to the contrary contained
herein, each director shall hold office until his successor is elected and
qualified, or until his earlier death, resignation or removal.
11.7. Vacancies. Any vacancy in the Board of Directors, however occurring,
including a vacancy resulting from an enlargement of the Board, may be filled
only 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, if
applicable, and a director chosen to fill a position resulting from an increase
in the number of directors shall hold office until the next election of the
class for which such director shall have been chosen and until his successor is
elected and qualified, or until his earlier death, resignation or removal.
11.8. 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
-18-
further notice other than announcement at the meeting, until a quorum shall be
present.
11.9. 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 or this
Certificate of Incorporation or the By-Laws of the Corporation.
11.10. Removal. Any one or more or all of the directors may be removed,
with or without cause, by the holders of shares representing at least
seventy-five percent (75%) of the votes which all the stockholders would be
entitled to cast at any election of directors or class of directors (other than
an election of the Class A Director); provided, however, that the Class A
Director may be removed only by the holders of at least seventy-five percent
(75%) of the outstanding shares of Class A Common Stock.
11.11. Stockholder Nominations and Introduction of Business, Etc. Advance
notice of stockholder nominations for election of directors and other business
to be brought by stockholders before a meeting of stockholders shall be given in
the manner provided in the By-Laws of the Corporation.
TWELFTH: In addition to any other considerations which the Board of
Directors may lawfully take into account in determining whether to take or to
refrain from taking corporate action on any matter, including proposing any
matter to the stockholders of the Corporation, the Board of Directors may take
into account the interests of creditors, customers, employees and other
constituencies of the Corporation and its subsidiaries and the effect thereof
upon communities in which the Corporation and its subsidiaries do business.
THIRTEENTH: In furtherance and not in limitation of the powers conferred by
law or in this Certificate of Incorporation, the Board of Directors (and any
committee of the Board of Directors) is expressly authorized to take such action
or actions as the Board or such committee may determine to be reasonably
necessary or desirable to (a) encourage any person to enter into negotiations
with the Board of Directors and management of the Corporation with respect to
any transaction which may result in a change in control of the Corporation which
is proposed or initiated by such person, or (b) contest or oppose any such
transaction which the Board of Directors or such committee determines to be
unfair, abusive or otherwise undesirable with respect to the Corporation and its
business, assets or properties or the stockholders of the Corporation,
including, without limitation, the adoption of such plans or the issuance of
such rights, options, capital stock, notes, debentures or other evidence of
indebtedness or other securities of the Corporation, which rights, options,
capital stock, notes, evidences of indebtedness and other securities (i) may be
exchangeable for or convertible into cash or other securities on such terms and
-19-
conditions as may be determined by the Board of Directors (or any such
committee) and (ii) may provide for the treatment of any holder or class of
holders thereof designated by the Board of Directors (or any such committee) in
respect of the terms, conditions, provisions and rights of such securities which
is different from, and unequal to, the terms, conditions, provisions and rights
applicable to all other holders thereof.
FOURTEENTH: 14.1. In addition to any requirements of law and any other
provisions of this Certificate of Incorporation or the terms of any series of
Preferred Stock or any other securities of the Corporation (and notwithstanding
the fact that a lesser percentage may be specified by law, this Certificate of
Incorporation or the terms of any series of Preferred Stock or any other
securities of the Corporation), the affirmative vote of the holders of shares
representing at least seventy-five percent (75%) of the votes which all the
stockholders would be entitled to cast at any election of directors or class of
directors (other than an election of the Class A Director) shall be required (x)
to authorize any amendment, alteration or repeal of any provision of Article
EIGHTH, Article ELEVENTH, Article TWELFTH, Article THIRTEENTH or this Article
FOURTEENTH, or (y) to adopt any provision in this Certificate of Incorporation
which is inconsistent with Article EIGHTH, Article ELEVENTH, Article TWELFTH or
Article THIRTEENTH or this Article FOURTEENTH.
14.2. In furtherance and not in limitation of the power conferred upon the
Board of Directors by law, the Board of Directors shall have power to make,
adopt, alter, amend and repeal from time to time By-laws of the Corporation,
subject to the right of the stockholders entitled to vote with respect thereto
to amend, alter and repeal, in accordance with Section 14.3 hereof and the
provisions of such By-laws, By-laws made by the Board of Directors.
14.3. Subject to the following paragraph, the By-laws of the Corporation
may be altered, amended or repealed or new by-laws may be adopted by the
affirmative vote of the holders of shares representing a majority of the votes
which all of the stockholders would be entitled to cast at any election of
directors or class of directors (other than an election of the Class A Director)
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.
Notwithstanding any other provision of law, this Certificate of
Incorporation (including the preceding paragraph) or the By-Laws, and
notwithstanding the fact that a lesser percentage may be specified by law, the
affirmative vote of the holders of shares representing at least 75% of the votes
which all the stockholders would be entitled to cast at any election of
directors or class of directors (other than an election of the Class A Director)
shall be required to amend or repeal, or to adopt any
-20-
provision inconsistent with, the provisions of Sections 1.10 or 1.11, the
provisions of Article II, or the provisions of Section 6.2 of the By-laws of the
Corporation. In addition, the affirmative votes of said holders shall be
required to permit the stockholders to adopt any provision of the Certificate of
Incorporation which is inconsistent with any such provision of the By-laws.
IN WITNESS WHEREOF, Casella Waste Systems, Inc. has caused this Certificate
to be signed in its name and on its behalf by its President this _____ day of
October, 1997.
CASELLA WASTE SYSTEMS, INC.
By: ___________________________________
John W. Casella
President
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SECOND AMENDED AND RESTATED
BY-LAWS
OF
CASELLA WASTE SYSTEMS, INC.
Effective: ___________, 1997
CASELLA WASTE SYSTEMS, INC.
BY-LAWS
TABLE OF CONTENTS
Page
----
ARTICLE 1 - Stockholders.....................................................1
1.1 Place of Meetings.........................................1
1.2 Annual Meeting............................................1
1.3 Special Meetings..........................................1
1.4 Notice of Meetings........................................1
1.5 Voting List...............................................2
1.6 Quorum....................................................2
1.7 Adjournments..............................................2
1.8 Voting and Proxies........................................2
1.9 Action at Meeting.........................................2
1.10 Introduction of Business at Meeting.......................3
1.11 Action without Meeting....................................4
ARTICLE 2 - Directors.......................................................4
2.1 General Powers............................................4
2.2 Number of Directors.......................................4
2.3 Classes of Directors......................................4
2.4 Election of Directors.....................................5
2.5 Terms of Office...........................................5
2.6 Allocation of Directors Among Classes in the Event of
Increases or Decreases in the Number of Directors.........5
2.7 Tenure....................................................5
2.8 Vacancies.................................................5
2.9 Quorum....................................................6
2.10 Action at Meeting.........................................6
2.11 Removal. .................................................6
2.12 Resignation...............................................6
2.13 Regular Meetings..........................................6
2.14 Special Meetings..........................................6
2.15 Notice of Special Meetings................................6
2.16 Meetings by Telephone Conference Calls....................7
2.17 Action by Consent.........................................7
2.18 Committees................................................7
2.19 Compensation of Directors.................................7
-ii-
ARTICLE 3 - Officers.........................................................8
3.1 Enumeration...............................................8
3.2 Election..................................................8
3.3 Qualification.............................................8
3.4 Tenure....................................................8
3.5 Resignation and Removal...................................8
3.6 Vacancies.................................................9
3.7 Chairman of the Board and Vice-Chairman of the Board......9
3.8 President.................................................9
3.9 Vice Presidents...........................................9
3.10 Secretary and Assistant Secretaries.......................9
3.11 Treasurer and Assistant Treasurers.......................10
3.12 Salaries.................................................10
ARTICLE 4 - Capital Stock...................................................10
4.1 Issuance of Stock........................................10
4.2 Certificates of Stock....................................11
4.3 Transfers................................................11
4.4 Lost, Stolen or Destroyed Certificates...................12
4.5 Record Date..............................................12
ARTICLE 5 - General Provisions..............................................12
5.1 Fiscal Year..............................................12
5.2 Corporate Seal...........................................13
5.3 Waiver of Notice.........................................13
5.4 Voting of Securities.....................................13
5.5 Evidence of Authority....................................13
5.6 Certificate of Incorporation.............................13
5.7 Transactions with Interested Parties.....................13
5.8 Severability.............................................14
5.9 Pronouns.................................................14
ARTICLE 6 - Amendments......................................................14
6.1 By the Board of Directors................................14
6.2 By the Stockholders......................................14
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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 Chairman of the Board. 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.
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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 shares representing a majority of
the votes entitled to be cast on matters other than the election of the Class A
Director, present in person or represented by proxy, shall constitute a quorum
for the transaction of business; provided, however, that a quorum shall only be
deemed to be present for purposes of the election of the Class A Director if the
holders of shares representing a majority of the votes entitled to be cast by
the holders of the Class A Common Stock are present or represented by proxy.
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
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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. Except as otherwise provided by 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 Introduction of Business at Meeting. Except as otherwise provided by
law, at any annual or special meeting of stockholders only such business shall
be conducted as shall have been properly brought before the meeting. In order to
be properly brought before the meeting, such business must have been either (A)
specified in the written notice of the meeting (or any supplement thereto) given
to stockholders of record on the record date for such meeting by or at the
direction of the Board of Directors, (B) brought before the meeting at the
direction of the Board of Directors or the chairman of the meeting or (C)
specified in a written notice given by or on behalf of a stockholder of record
on the record date for such meeting entitled to vote thereat or a duly
authorized proxy for such stockholder, in accordance with all of the following
requirements. A notice referred to in clause (C) hereof must be delivered
personally to or mailed to and received at the principal executive office of the
corporation, addressed to the attention of the Secretary, not more than ten (10)
days after the date of the initial notice referred to in clause (A) hereof, in
the case of business to be brought before a special meeting of stockholders, and
not less than thirty (30) days prior to the first anniversary date of the
initial notice referred to in clause (A) hereof to the previous year's annual
meeting, in the case of business to be brought before an annual meeting of
stockholders. Such notice referred to in clause (C) hereof shall set forth (i) a
full description of each such item of business proposed to be brought before the
meeting, (ii) the name and address of the person proposing to bring such
business before the meeting, (iii) the class and number of shares held of
record, held beneficially and represented by proxy by such person as of the
record date for meeting (if such date has been made publicly available) and as
of the date of such notice, (iv) if any item of such business involves
nomination for director, all information regarding each such nominee that would
be required to be set forth in a definitive proxy statement filed with the
Securities and Exchange Commission pursuant to Section 14 of the Securities Act
of 1934, as amended, or any successor thereto, and the written consent of each
such nominee to serve if elected, and (v) all other information that would be
required to be filed with the Securities and Exchange Commission if, with
respect to the business proposed to be brought before the meeting, the person
proposing such business was a participant in a solicitation subject to Section
14 of the Securities Exchange Act of 1934, as amended, or any successor thereto.
No business shall be brought before any meeting of stockholders of the
Corporation otherwise than as provided in this paragraph.
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Nothing in the foregoing provisions shall obligate the corporation or the
Board of Directors to include information as to any nominee for director
submitted by a stockholder in any proxy statement or other communication sent to
stockholders.
The chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that any proposed item of business was not brought before
the meeting in accordance with the foregoing procedure and, if he should so
determine, he shall so declare to the meeting and the defective item of business
shall be disregarded.
1.11 Action without Meeting. Stockholders of the corporation may not take
any action by written consent in lieu of a meeting.
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 of Directors. The number of directors which shall constitute the
whole Board of Directors shall be determined by resolution of a majority of the
Board of Directors, but in no event shall be less than three. The number of
directors may be decreased at any time and from time to time 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 the
stockholders by such stockholders as have the right to vote on such election.
Directors need not be stockholders of the corporation.
2.3 Classes of Directors. The Board of Directors shall be and is divided
into three classes: Class I, Class II and Class III. No one class shall have
more than one director more than any other class. If a fraction is contained in
the quotient arrived at by dividing the authorized number of directors by three,
then, if such fraction is one-third, the extra director shall be a member of
Class I and, if such fraction is two-thirds, one of the extra directors shall be
a member of Class I and the other extra director shall be a member of Class II,
unless otherwise provided for from time to time by resolution adopted by a
majority of the Board of Directors. The Class A Director shall be in Class I.
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2.4 Election of Directors. The holders of Class A Common Stock, voting
separately as a class, shall be entitled to elect one director (the "Class A
Director"). All other directors shall be elected by the holders of the Class A
Common Stock and Class B Common Stock, if any, voting together as a single
class.
2.5 Terms of Office. Each director shall serve for a term ending on the
date of the third annual meeting following the annual meeting at which such
director was elected; provided, however, that each initial director in Class I
shall serve for a term ending on the date of the annual meeting next following
the end of the Corporation's fiscal year ending April 30, 1998; each initial
director in Class II shall serve for a term ending on the date of the annual
meeting next following the end of the Corporation's fiscal year ending April 30,
1999; and each initial director in Class III shall serve for a term ending on
the date of the annual meeting next following the end of the Corporation's
fiscal year ending April 30, 2000.
2.6 Allocation of Directors Among Classes in the Event of Increases or
Decreases in the Number of Directors. In the event of any increase or decrease
in the authorized number of directors, (i) each director then serving as such
shall nevertheless continue as director of the class of which he is a member
until the expiration of his current term or his prior death, retirement or
resignation and (ii) the newly created or eliminated directorships resulting
from such increase or decrease shall be apportioned by the Board of Directors
among the three classes of directors so as to ensure that no one class has more
than one director more than any other class. To the extent possible, consistent
with the foregoing rule, any newly created directorships shall be added to those
classes whose terms of office are to expire at the latest dates following such
allocation, and any newly eliminated directorships shall be subtracted from
those classes whose terms of office are to expire at the earliest dates
following such allocation, unless otherwise provided for from time to time by
resolution adopted by a majority of the directors then in office, although less
than a quorum.
2.7 Tenure. Notwithstanding any provisions to the contrary contained
herein, each director shall hold office until his successor is elected and
qualified, or until his earlier death, resignation or removal.
2.8 Vacancies. Any vacancy in the Board of Directors, however occurring,
including a vacancy resulting from an enlargement of the Board, may be filled
only 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, if
applicable, and a director chosen to fill a position resulting from an increase
in the number of directors shall hold office until the next election of the
class for which such director shall have been chosen and until his successor is
elected and qualified, or until his earlier death, resignation or removal.
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2.9 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 meting, until
a quorum shall be present.
2.10 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 or the
Certificate of Incorporation or these By-Laws.
2.11 Removal. Any one or more or all of the directors may be removed, with
or without cause, by the holders of shares representing at least seventy-five
percent (75%) of the votes which all the stockholders would be entitled to cast
at any election of directors or class of directors (other than an election of
the Class A Director); provided, however, that the Class A Director may be
removed only by the holders of at least seventy-five percent (75%) of the
outstanding shares of Class A Common Stock.
2.12 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.
2.13 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.
2.14 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.
2.15 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
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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.
2.16 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.
2.17 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.
2.18 Committees. The Board of Directors may 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.
2.19 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
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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.
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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
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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
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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
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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.
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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. Except as otherwise specified by
the Board of Directors, 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;
-13-
(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.
6.2 By the Stockholders. Subject to the following paragraph, these By-laws
may be altered, amended or repealed or new by-laws may be adopted by the
affirmative vote of the holders of shares representing a majority of the votes
which all of the stockholders would be entitled to cast at any election of
directors or class of directors (other than an election of the Class A Director)
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.
Notwithstanding any other provision of law, the Certificate of
Incorporation or these By-Laws (including the preceding paragraph), and
notwithstanding the fact that a lesser percentage may be specified by law, the
affirmative vote of the holders of shares representing at least 75% of the votes
which all the stockholders would be entitled to cast at any election of
directors or class of directors (other than an election
-14-
of the Class A Director) shall be required to amend or repeal, or to adopt any
provision inconsistent with, the provisions of Sections 1.10 or 1.11, the
provisions of Article II, or the provisions of this Section 6.2.
-15-
Exhibit 5
Hale and Dorr LLP
Counsellors at Law
60 State Street, Boston, Massachusetts 02109
617-526-6000 - Fax 617-526-5000
September 24, 1997
Casella Waste Systems, Inc.
25 Greens Hill Lane
Rutland, VT 05701
Ladies and Gentlemen:
This opinion is furnished to you in connection with a Registration
Statement on Form S-1 (File No. 333-33135, the "Registration Statement") filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended, for the registration of 4,025,000 shares of
Class A Common Stock, $0.01 par value per share (the "Shares"), of Casella Waste
Systems, Inc., a Delaware corporation (the "Company"), including 525,000 Shares
issuable upon exercise of an overallotment option granted by certain selling
stockholders (the "Selling Stockholders").
The Shares are to be sold by the Company and the Selling Stockholders
pursuant to an underwriting agreement (the "Underwriting Agreement") to be
entered into by and among the Company and Goldman, Sachs & Co., Donaldson,
Lufkin & Jenrette Securities Corporation and Oppenheimer & Co., Inc., as
representatives of the several underwriters named in the Underwriting Agreement
(the "Representatives").
We have acted as counsel for the Company in connection with the issue and
sale by the Company and the Selling Stockholders of the Shares. We have examined
signed copies of the Registration Statement and all exhibits thereto, all as
filed with the Commission. We have also examined and relied upon the original or
copies of minutes of the meetings of the stockholders and the Board of Directors
of the Company, stock record books of the Company, a copy of the Amended and
Restated By-Laws of the Company, a copy of the Amended and Restated Certificate
of Incorporation of the Company, and such other documents as we have deemed
necessary for purposes of rendering the opinions hereinafter set forth.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents submitted
to us as copies, and the authenticity of the originals of such documents.
We assume that the appropriate action will be taken, prior to the offer and
sale of the Shares in accordance with the Underwriting Agreement, to register
and qualify the Shares for sale under all applicable state securities, or "Blue
Sky", laws.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and, when issued and sold by the Company or
sold by the Selling Stockholders pursuant to the Underwriting Agreement, such
Shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as part of the Registration
Statement and to the use of our name therein and in the related Prospectus under
the caption "Legal Matters."
It is understood that this opinion is to be used only in connection with
the offer of the Shares while the Registration Statement is in effect.
This opinion is based upon currently existing statutes, rules, regulations
and judicial decisions, and we disclaim any obligations to advise you of any
change in any of these sources of law or subsequent legal or factual
developments which might affect any matters or opinions set forth herein.
Please note that we are opining only as to the matters expressly set forth
herein, and no opinion should be inferred as to any other matters.
Very truly yours,
/s/ Hale and Dorr LLP
---------------------------------
HALE AND DORR LLP
-2-
CASELLA WASTE SYSTEMS, INC.
1997 STOCK INCENTIVE PLAN
1. Purpose
The purpose of this 1997 Stock Incentive Plan (the "Plan") of Casella Waste
Systems, Inc., a Delaware corporation (the "Company"), is to advance the
interests of the Company's stockholders by enhancing the Company's ability to
attract, retain and motivate persons who make (or are expected to make)
important contributions to the Company by providing such persons with equity
ownership opportunities and performance-based incentives and thereby better
aligning the interests of such persons with those of the Company's stockholders.
Except where the context otherwise requires, the term "Company" shall include
any present or future subsidiary corporations of Casella Waste Systems, Inc. as
defined in Section 424(f) of the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder (the "Code").
2. Eligibility
All of the Company's employees, officers, directors, consultants and
advisors are eligible to be granted options, restricted stock, or other
stock-based awards (each, an "Award") under the Plan. Any person who has been
granted an Award under the Plan shall be deemed a "Participant".
3. Administration, Delegation
(a) Administration by Board of Directors. The Plan will be administered by
the Board of Directors of the Company (the "Board"). The Board shall
have authority to grant Awards and to adopt, amend and repeal such
administrative rules, guidelines and practices relating to the Plan as
it shall deem advisable. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award 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. All decisions by the Board shall be made in the Board's
sole discretion and shall be final and binding on all persons having
or claiming any interest in the Plan or in any Award. No director or
person acting pursuant to the authority delegated by the Board shall
be liable for any action or determination relating to or under the
Plan made in good faith.
(b) Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive
officers of the Company the power to make Awards and exercise such
other powers under the Plan as the Board may determine, provided that
the Board
shall fix the maximum number of shares subject to Awards and the
maximum number of shares for any one Participant to be made by such
executive officers.
(c) Appointment of Committees. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one
or more committees or subcommittees of the Board (a "Committee"). If
and when the Class A Common Stock, $.01 par value per share, of the
Company (the "Common Stock") is registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), the Board shall appoint one
such Committee of not less than two members, each member of which
shall be an "outside director" within the meaning of Section 162(m) of
the Code and a "non-employee director" as defined in Rule 16b-3
promulgated under the Exchange Act." All references in the Plan to the
"Board" shall mean the Board or a Committee of the Board or the
executive officer referred to in Section 3(b) to the extent that the
Board's powers or authority under the Plan have been delegated to such
Committee or executive officer.
4. Stock Available for Awards
(a) Number of Shares. Subject to adjustment under Section 4(c), Awards may
be made under the Plan for up to such number of shares of Common Stock
as is equal to the sum of (i) 1,000,000 shares of Common Stock plus
the sum of (x) the number of shares which remain available for grant
under the Company's 1996 Stock Option Plan on the Effective Date, and
(y) the number of shares subject to options granted under the
Company's 1993 Incentive Stock Option Plan, 1994 Nonstatutory Stock
Option Plan and 1996 Stock Option Plan and outstanding as of the
Effective Date which are not actually issued because such options
expire or otherwise result in shares not being issued. If any Award
expires or is terminated, surrendered or canceled without having been
fully exercised or is forfeited in whole or in part or results in any
Common Stock not being issued, the unused Common Stock covered by such
Award shall again be available for the grant of Awards under the Plan,
subject, however, in the case of Incentive Stock Options (as
hereinafter defined), to any limitation required under the Code.
Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
(b) Per-Participant Limit. Subject to adjustment under Section 4(c), for
Awards granted after the Common Stock is registered under the Exchange
Act, the maximum number of shares with respect to which an Award may
be granted to any Participant under the Plan shall be
-2-
200,000 per calendar year. The per-participant limit described in this
Section 4(b) shall be construed and applied consistently with Section
162(m) of the Code.
(c) Adjustment to Common Stock. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off or other
similar change in capitalization or event, or any distribution to
holders of Common Stock other than a normal cash dividend, (i) the
number and class of securities available under this Plan, (ii) the
number and class of security and exercise price per share subject to
each outstanding Option, (iii) the repurchase price per security
subject to each outstanding Restricted Stock Award, and (iv) the terms
of each other outstanding stock-based Award shall be appropriately
adjusted by the Company (or substituted Awards may be made, if
applicable) to the extent the Board shall determine, in good faith,
that such an adjustment (or substitution) is necessary and
appropriate. If this Section 4(c) applies and Section 8(e)(1) also
applies to any event, Section 8(e)(1) shall be applicable to such
event, and this Section 4(c) shall not be applicable.
5. Stock Options
(a) General. The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option and the
conditions and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state
securities laws, as it considers necessary or advisable. An Option
which is not intended to be an Incentive Stock Option (as hereinafter
defined) shall be designated a "Nonstatutory Stock Option".
(b) Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an
"Incentive Stock Option") shall only be granted to employees of the
Company and shall be subject to and shall be construed consistently
with the requirements of Section 422 of the Code. The Company shall
have no liability to a Participant, or any other party, if an Option
(or any part thereof) which is intended to be an Incentive Stock
Option is not an Incentive Stock Option.
(c) Exercise Price. The Board shall establish the exercise price at the
time each Option is granted and specify it in the applicable option
agreement; provided, however, that no Options will be granted at an
-3-
exercise price which is below the fair market value of the Common
Stock covered thereby.
(d) Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in
the applicable option agreement; provided, however, that no option
shall be exercisable more than ten years after the date of grant
thereof.
(e) Exercise of Option. Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person
together with payment in full as specified in Section 5(f) for the
number of shares for which the Option is exercised.
(f) Payment Upon Exercise. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as the Board may otherwise provide in an Option Agreement,
(i) by delivery of an irrevocable and unconditional undertaking
by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or delivery by the
Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver
promptly to the Company cash or a check sufficient to pay the
exercise price, or (ii) by delivery of shares of Common Stock
owned by the Participant valued at their fair market value as
determined by the Board in good faith ("Fair Market Value"),
which Common Stock was owned by the Participant at least six
months prior to such delivery;
(3) to the extent permitted by the Board and explicitly provided in
an Option Agreement (i) by delivery of a promissory note of the
Participant to the Company on terms determined by the Board, or
(ii) by payment of such other lawful consideration as the Board
may determine; or
(4) any combination of the above permitted forms of payment.
6. Restricted Stock
(a) Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to
repurchase all or part of such shares at their issue price or other
stated
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or formula price (or to require forfeiture of such shares if issued at
no cost) from the recipient in the event that conditions specified by
the Board in the applicable Award are not satisfied prior to the end
of the applicable restriction period or periods established by the
Board for such Award (each, "Restricted Stock Award").
(b) Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the
conditions for repurchase (or forfeiture) and the issue price, if any.
Any stock certificates issued in respect of a Restricted Stock Award
shall be registered in the name of the Participant and, unless
otherwise determined by the Board, deposited by the Participant,
together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction
periods, the Company (or such designee) shall deliver the certificates
no longer subject to such restrictions to the Participant or if the
Participant has died, to the beneficiary designated, in a manner
determined by the Board, by a Participant to receive amounts due or
exercise rights of the Participant in the event of the Participant's
death (the "Designated Beneficiary"). In the absence of an effective
designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.
7. Other Stock-Based Awards
The Board shall have the right to grant other Awards based upon the Common
Stock having such terms and conditions as the Board may determine, including the
grant of shares based upon certain conditions, the grant of securities
convertible into Common Stock and the grant of stock appreciation rights.
8. General Provisions Applicable to Awards
(a) Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered 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 Participant, shall be exercisable only by the Participant.
References to a Participant, to the extent relevant in the context,
shall include references to authorized transferees.
(b) Documentation. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine. Each
Award may contain terms and conditions in addition to those set forth
in the Plan.
-5-
(c) Board Discretion. Except as otherwise provided by the Plan, each type
of Award may be made alone or in addition or in relation to any other
type of Award. The terms of each type of Award need not be identical,
and the Board need not treat Participants uniformly.
(d) Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of
absence or other change in the employment or other status of a
Participant and the extent to which, and the period during which, the
Participant, the Participant's legal representative, conservator,
guardian or Designated Beneficiary may exercise rights under the
Award.
(e) Acquisition Events
(1) Consequences of Acquisition Events. Upon the occurrence of an
Acquisition Event (as defined below), or the execution by the
Company of any agreement with respect to an Acquisition Event,
the Board shall provide that outstanding 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 substituted for Incentive Stock
Options shall satisfy, in the determination of the Board, the
requirements of Section 424(a) of the Code; provided, however,
that in the event the acquiring or succeeding corporation does
not agree to assume all such Options or other Awards, the Board
shall take any one or more of the following actions with respect
to then outstanding Options or other Awards not so assumed: (i)
upon written notice to the Participants, provide that all then
unexercised Options will become exercisable in full as of a
specified time (the "Acceleration Time") prior to the Acquisition
Event and will terminate immediately prior to the consummation of
such Acquisition Event, except to the extent exercised by the
Participants between the Acceleration Time and the consummation
of such Acquisition Event; (ii) in the event of an Acquisition
Event under the terms of which holders of Common Stock will
receive upon consummation thereof a cash payment for each share
of Common Stock surrendered pursuant to such Acquisition Event
(the "Acquisition Price"), provide that all outstanding Options
shall terminate upon consummation of such Acquisition Event and
each Participant shall receive, in exchange therefor, a cash
payment equal to the amount (if any) by which (A) the Acquisition
Price multiplied by the number of shares of Common Stock subject
to such outstanding Options (whether or
-6-
not then exercisable), exceeds (B) the aggregate exercise price
of such Options; (iii) provide that all Restricted Stock Awards
then outstanding shall become free of all restrictions prior to
the consummation of the Acquisition Event; and (iv) provide that
any other stock-based Awards outstanding (A) shall become
exercisable, realizable or vested in full, or shall be free of
all conditions or restrictions, as applicable to each such Award,
prior to the consummation of the Acquisition Event, or (B), if
applicable, shall be assumed, or equivalent Awards shall be
substituted, by the acquiring or succeeding corporation (or an
affiliate thereof).
An "Acquisition Event" shall mean: (a) any merger or consolidation which
results in the voting securities of the Company outstanding immediately prior
thereto representing immediately thereafter (either by remaining outstanding or
by being converted into voting securities of the surviving or acquiring entity)
less than 50% of the combined voting power of the voting securities of the
Company or such surviving or acquiring entity outstanding immediately after such
merger or consolidation; (b) any sale of all or substantially all of the assets
of the Company; or (c) the complete liquidation of the Company.
(2) Assumption of Options Upon Certain Events. The Board may grant
Awards under the Plan in substitution for stock and stock- based
awards held by employees of another corporation who become
employees of the Company as a result of a merger or consolidation
of the employing corporation with the Company or the acquisition
by the Company of property or stock of the employing corporation.
The substitute Awards shall be granted on such terms and
conditions as the Board considers appropriate in the
circumstances.
(f) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. The Board may allow Participants to
satisfy such tax obligations in whole or in part in shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value. The Company may, to the extent permitted by law, deduct
any such tax obligations from any payment of any kind otherwise due to a
Participant.
(g) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided
-7-
that the Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
(h) Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
(i) Acceleration. The Board may at any time provide that any Options shall
become immediately exercisable in full or in part, that any Restricted Stock
Awards shall be free of all restrictions or that any other stock-based Awards
may become exercisable in full or in part or free of some or all restrictions or
conditions, or otherwise realizable in full or in part, as the case may be.
9. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any claim
or right to be granted an Award, and the grant of an Award shall not
be construed as giving a Participant the right to continued employment
or any other relationship with the Company. The Company expressly
reserves the right at any time to dismiss or otherwise terminate its
relationship with a Participant free from any liability or claim under
the Plan, except as expressly provided in the applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be
distributed with respect to an Award until becoming the record holder
of such shares.
(c) Effective Date and Term of Plan. The Plan shall become effective on
the closing of the Company's initial public offering (the "Effective
Date"), but no Award granted to a Participant designated as subject to
Section 162(m) by the Board shall become exercisable, vested or
realizable, as applicable to such Award, unless and until the Plan has
been approved by the Company's stockholders to the extent Section
162(m) requires
-8-
stockholder approval. No Awards shall be granted under the Plan after
the completion of ten years from the earlier of (i) the date on which
the Plan was adopted by the Board or (ii) the date the Plan was
approved by the Company's stockholders, but Awards previously granted
may extend beyond that date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, provided that no Award granted to
a Participant designated as subject to Section 162(m) by the Board
after the date of such amendment shall become exercisable, realizable
or vested, as applicable to such Award (to the extent that such
amendment to the Plan was required to grant such Award to a particular
Participant), unless and until such amendment shall have been approved
by the Company's stockholders.
(e) Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware, without regard to any applicable
conflicts of law.
Adopted by the Board of
Directors on July 31, 1997
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CASELLA WASTE SYSTEMS, INC.
1997 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. Purpose.
-------
The purpose of this 1997 Non-Employee Director Stock Option Plan (the
"Plan") of Casella Waste Systems, Inc. (the "Company") is to encourage ownership
in the Company by non-employee directors of the Company whose continued services
are considered essential to the Company's future progress and to provide them
with a further incentive to remain as directors of the Company.
2. Administration.
---------------
The Board of Directors shall supervise and administer the Plan. Grants of
stock options under the Plan and the amount and nature of the awards to be
granted shall be automatic in accordance with Section 5. However, all questions
concerning interpretation of the Plan or any options granted under it shall be
resolved by the Board of Directors and such resolution shall be final and
binding upon all persons having an interest in the Plan. The Board of Directors
may, to the full extent permitted by or consistent with applicable laws or
regulations, delegate any or all of its powers under the Plan to a committee
appointed by the Board of Directors, and if a committee is so appointed, all
references to the Board of Directors in the Plan shall mean and relate to such
committee.
3. Participation in the Plan.
-------------------------
Directors of the Company who are not employees of the Company or any
subsidiary of the Company ("non-employee directors") shall be eligible to
receive options under the Plan.
4. Stock Subject to the Plan.
-------------------------
(a) The maximum number of shares of the Company's Class A Common Stock, par
value $.01 per share ("Common Stock"), which may be issued under the Plan shall
be 50,000 shares, subject to adjustment as provided in Section 7.
(b) If any outstanding option under the Plan for any reason expires or is
terminated without having been exercised in full, the shares covered by the
unexercised portion of such option shall again become available for issuance
pursuant to the Plan.
(c) All options granted under the Plan shall be non-statutory options not
entitled to special tax treatment under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code").
(d) Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
5. Terms, Conditions and Form of Options.
-------------------------------------
Each option granted under the Plan shall be evidenced by a written
agreement in such form as the Board of Directors shall from time to time
approve, which agreements shall comply with and be subject to the following
terms and conditions:
(a) Option Grant Dates. Options shall automatically be granted to all
non-employee directors as follows:
(i) each person who first becomes a non-employee director after
the closing date (the "Closing Date") of the Company's initial public offering
of Common Stock pursuant to an effective registration statement under the
Securities Act of 1933, as amended shall be granted an option to purchase 5,000
shares of Common Stock on the date of his or her initial election to the Board
of Directors; and
(ii) each non-employee director shall be granted an option to purchase
2,000 shares of Common Stock on the date of each Annual Meeting of Stockholders
of the Company commencing with the 1998 Annual Meeting of Stockholders (other
than a director who was initially elected to the Board of Directors at any such
Annual Meeting or, if previously, at any time after the prior year's Annual
Meeting of Stockholders), provided that he or she is serving as a director
immediately following such Annual Meeting.
(b) Option Exercise Price. The option exercise price per share for each
option granted under the Plan shall equal (i) the last reported sales price per
share of the Company's Common Stock on the Nasdaq National Market (or if the
Common Stock is traded on a national securities exchange on the date of grant,
the reported closing sales price per share of the Company's Common Stock on such
exchange) on the date of grant (or if no such price is reported on such date
such price as reported on the nearest preceding day) or (ii) if the Common Stock
is not traded on the Nasdaq National Market or a national securities exchange,
the fair market value per share on the date of grant as most recently determined
by the Board of Directors.
(c) Transferability of Options. Except as the Board may otherwise determine
or provide in an option granted under the Plan, any option granted under the
Plan to an optionee shall not be transferable by the optionee other than by will
or the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder, and shall be exercisable during
the optionee's lifetime only by the optionee or the optionee's guardian or legal
representative. References to an optionee, to the extent relevant in the
context, shall include references to authorized transferees.
-2-
(d) Vesting Period.
(i) General. Each option granted under the Plan shall become
exercisable in three equal annual installments beginning on the first
anniversary of the Option Grant Date; provided, however, that the optionee has
continued to serve as a director until at least the Annual Meeting of
Stockholders immediately preceding such vesting date.
(ii) Acceleration Upon Change in Control. Notwithstanding the
foregoing, each outstanding option granted under the Plan shall immediately
become exercisable in full in the event a Change in Control (as defined in
Section 8) of the Company occurs.
(e) Termination. Each option shall terminate, and may no longer be
exercised, on the earlier of the (i) the date ten years after the grant date of
such option or (ii) the date 90 days after the optionee ceases to serve as a
director of the Company; provided that, in the event an optionee ceases to serve
as a director due to his or her death or disability (within the meaning of
Section 22(e)(3) of the Code or any successor provision), then the exercisable
portion of the option may be exercised, within the period of 180 days following
the date the optionee ceases to serve as a director (but in no event later than
ten years after the Option Grant Date), by the optionee or by the person to whom
the option is transferred in accordance with the terms of this Plan and the
applicable option agreement, or by written notice pursuant to Section 5(g).
(f) Exercise Procedure. An option may be exercised only by written notice
to the Company at its principal office accompanied by (i) payment in cash or by
certified or bank check of the full consideration for the shares as to which
they are exercised, (ii) delivery of outstanding shares of Common Stock (which,
in the case of shares acquired from the Company, have been outstanding for at
least six months) having a fair market value on the last business day preceding
the date of exercise equal to the option exercise price, or (iii) an irrevocable
undertaking by a broker (who is a member of the New York Stock Exchange) to
deliver promptly to the Company sufficient funds to pay the exercise price or
delivery of irrevocable instructions to a broker (who is a member of the New
York Stock Exchange) to deliver promptly to the Company cash or a check
sufficient to pay the exercise price.
(g) Exercise by Representative Following Death of Director. An optionee, by
written notice to the Company, may designate one or more persons (and from time
to time change such designation), including his or her legal representative,
who, by reason of the optionee's death, shall acquire the right to exercise all
or a portion of the option. If the person or persons so designated wish to
exercise any portion of the option, they must do so within the term of the
option as provided herein. Any exercise by a representative shall be subject to
the provisions of the Plan.
-3-
6. Limitation of Rights.
--------------------
(a) No Right to Continue as a Director. Neither the Plan, nor the granting
of an option nor any other action taken pursuant to the Plan, shall constitute
or be evidence of any agreement or understanding, express or implied, that the
Company will retain the optionee as a director for any period of time.
(b) No Stockholders' Rights for Options. An optionee shall have no rights
as a stockholder with respect to the shares covered by his or her option until
the date of the issuance to him or her of a stock certificate therefor, and no
adjustment will be made for dividends or other rights (except as provided in
Section 7) for which the record date is prior to the date such certificate is
issued.
(c) 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 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 obtain such listing, registration or qualification, or to satisfy
such condition.
7. Adjustment Provisions for Mergers, Recapitalizations and Related
-----------------------------------------------------------------
Transactions.
------------
If, through or as a result of any merger, consolidation, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, or other similar transaction, (i) the outstanding shares of Common Stock
are exchanged for a different number or kind of securities of the Company or of
another entity, or (ii) additional shares or new or different shares or other
securities of the Company or of another entity are distributed with respect to
such shares of Common Stock, the Board of Directors shall make an appropriate
and proportionate adjustment 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 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 for such options), to the end that each
option shall be exercisable, for the same aggregate exercise price, for such
securities as such optionholder would have held immediately following such event
if he had exercised such option immediately prior to such event. No fractional
shares will be issued under the Plan on account of any such adjustments.
-4-
8. Change in Control.
-----------------
For purposes of the Plan, a "Change in Control" shall be deemed to have
occurred only if any of the following events occurs: (i) any "person", as such
term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the
Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned directly or indirectly by
the stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company (other than by virtue of ownership of the Company's
Class B Common Stock) representing 50% or more of the combined voting power of
the Company's then outstanding securities; (ii) the stockholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; (iii) the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets;
or (iv) individuals who, on the date on which the Plan was adopted by the Board
of Directors, constituted the Board of Directors of the Company, together with
any new director whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least a
majority of the directors then still in office who were directors on the date on
which the Plan was adopted by the Board of Directors or whose election or
nomination was previously so approved (except for any individual whose election
as a director occurs as a result of an actual or threatened election contest
with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board of Directors), cease for any reason to constitute at least a
majority of the Board of Directors.
9. Termination and Amendment of the Plan.
-------------------------------------
The Board of Directors may suspend or terminate the Plan or amend it in any
respect whatsoever.
10. Notice.
------
Any written notice to the Company required by any of the provisions of the
Plan shall be addressed to the Treasurer of the Company and shall become
effective when it is received.
-5-
11. Governing Law.
-------------
The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the internal laws of the State of Delaware (without regard
to any applicable conflicts of laws or principles).
12. Effective Date.
--------------
The Plan shall become effective on the Closing Date.
Adopted by the Board of Directors on
July 31, 1997.
Approved by the stockholders as of
September __, 1997.
-6-
REGISTRATION RIGHTS AGREEMENT
January 3, 1996
Susan Olivieri
79 East Wilder Road
West Lebanon, NH 03784
Robert MacNeil
79 East Wilder Road
West Lebanon, NH 03784
Dear Purchasers:
This will confirm that, in consideration of the Asset Purchase
Agreement between Casella Waste Management, Inc., a subsidiary of Casella Waste
Systems, Inc., a Delaware corporation (the "Corporation"), and Northeast Waste
Services, Ltd., dated January 3, 1996 (the "Asset Purchase Agreement"), pursuant
to which Casella Waste Management, Inc. will acquire certain assets of Northeast
Waste Services, Ltd. and enter into certain arrangements with the Purchasers for
consideration including stock purchase warrants to purchase shares of Class A
Common Stock, $.01 par value, of the Corporation (the "Warrants") and in order
to induce you to consummate the transaction contemplated by the Asset Purchase
Agreement, the Corporation hereby covenants and agrees with you, and with each
subsequent holder of Restricted Securities (as such term is defined herein), as
follows:
1. Certain Definitions.. As used in this Agreement, the following
terms shall have the following respective meanings:
"Charter" shall mean the Corporation's Amended and Restated Certificate
of Incorporation.
"Commission" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation, as constituted as of the date of this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Purchasers" shall mean Robert MacNeil and Susan Olivieri.
"Registration Expenses" shall mean the expenses so described in
Section 6.
"Restricted Securities" shall mean the Warrants and the Restricted
Stock, for so long as the instruments or certificates evidencing such securities
shall be required to bear the legend set forth in Section 2 hereof.
"Restricted Stock" shall mean the Warrant Shares, the certificates for
which are required to bear the legend set forth in Section 2 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 6.
"Warrant Shares" shall mean the shares of Class A Common Stock issued
or issuable upon exercise of the Warrants by the Purchasers.
2. Restrictive Legend. Each certificate representing Warrant Shares
and, except as otherwise provided in Section 3 hereof, each certificate issued
upon exchange or transfer of any such Warrant Shares shall be stamped or
otherwise imprinted with a legend substantially in the following form:
"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."
3. Notice of Proposed Transfer. Prior to any proposed transfer of any
Restricted Securities (other than under the circumstances described in Section 4
hereof), the holder thereof shall give written notice to the Corporation of its
intention to effect such transfer. Each such notice shall describe the manner of
the proposed transfer and shall be accompanied by an opinion of counsel
satisfactory to the Corporation to the effect that the proposed transfer may be
effected without registration under the Securities Act, whereupon, subject to
any other restrictions or transfer then applicable to the holder thereof, such
holder shall be entitled to transfer such securities in accordance with the
terms of its notice. All Restricted Securities transferred as above provided
shall bear the legend set forth in Section 2, except that such securities shall
not bear such legend if (a) such transfer is a public sale in
-2-
accordance with the provisions of Rule 144 (or any other rule permitting public
sale without registration under the Securities Act) or (b) the opinion of
counsel referred to above is to the further effect that the transferee and any
subsequent transferee (other than an affiliate of the Corporation) would be
entitled to transfer such securities in a public sale without registration under
the Securities Act.
4. Incidental Registration. If the corporation at any time proposes to
register any of its securities for its own account under the Securities Act for
sale to the public (except with respect to registration statements on Form S-4,
S-8, S-14 or S- 15 or another 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), each such time it
will give written notice to Purchasers of its intention so to do. Upon the
written request of any Purchaser given within ten (10) days after the date of
any such notice, to register any of its Restricted Stock (which request shall
state the intended method of disposition thereof), the Corporation will use its
best efforts to cause the Restricted Stock as to which registration shall have
been so requested to be included in the securities to be covered by the
registration statement proposed to be filed by the Corporation, all to the
extent requisite to permit the sale or other disposition by the holder (in
accordance with its written request) of such Restricted Stock so registered. The
Corporation may withdraw any such registration statement before it becomes
effective or postpone the offering of securities contemplated by such
registration fee without any obligation to any holder of any Restricted Stock.
In the event that any registration pursuant to this Section 4 shall be, in whole
or in part, an underwritten public offering of Common Stock, any request by a
holder pursuant to this Section 4 to register Restricted Stock shall specify
that either: (i) such Restricted Stock is to be included in the underwriting on
the same terms and conditions as the shares of Common Stock otherwise being sold
through underwriters under such registration; or (ii) such Restricted Stock is
to be sold in the open market without any underwriting, on terms and conditions
comparable to those normally applicable to offerings of common stock in
reasonably similar circumstances. The number of shares of Restricted Stock to be
included in such an underwriting may be reduced (pro rata among the requesting
holders based on their total ownership of shares of common stock, giving effect
to the conversion into Common Stock of all securities convertible therein to))
if and to the extent that the managing underwriter shall be of the opinion that
such inclusion would adversely affect the marketing of the securities to be sold
by the Corporation therein. Notwithstanding anything to the contrary contained
in this Section 4, in the event that there is an underwritten offering of
securities of the Corporation pursuant to a registration covering Restricted
Stock and a selling holder of Restricted Stock does not elect to sell his
Restricted Stock to the underwriters of the Corporation's securities in
connection with such offering, such holder shall refrain from selling such
Restricted Stock so registered pursuant to this Section 4 during the period of
distribution of the Corporation's securities by such underwriters and a period
in which the underwriting syndicate participates in the aftermarket; provided,
however,
-3-
that such holder shall, in any event, be entitled to sell its Restricted Stock
in connection with such registration commencing on the 90th day after the
effective date on such registration statement. The Corporation may withdraw any
registration statement referred to in this Section 4 without thereby incurring
any liability to the holders of Restricted Stock.
5. Registration Procedures. If and whenever the Corporation effects the
registration of any shares of Restricted Stock under the Securities Act, the
Corporation will:
(a) prepare and file with the Commission a registration statement with
respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for the period of
the distribution contemplated thereby (determined as hereinafter
provided);
(b) as expeditiously as possible, prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep
such registration statement effective, in the case of a firm
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 Restricted Stock
covered thereby or 120 days after the effective date thereof;
(c) as expeditiously as possible, furnish to each seller and to each
underwriter such number of copies of the prospectus as such persons
reasonably may request in order to facilitate the public sale or other
disposition of the Restricted Stock covered by such registration
statement;
(d) as expeditiously as possible, use its best efforts to register or
qualify the Restricted Stock covered by such registration statement
under the securities or blue sky laws of such jurisdictions as the
sellers of Restricted Stock or, in the case of an underwritten public
offering, the managing underwriter reasonably shall request, provided,
however, that the Corporation 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) immediately notify each seller of Restricted Stock and each underwriter
under such registration statement, at any time when
-4-
a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event of which the Corporation
has knowledge as a result of which the prospectus contained in such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
(f) use its best efforts (if the offering is underwritten) to furnish, at
the request of any seller of Restricted Stock, on the closing date of
such offering: (i) an opinion, dated such date, of counsel representing
the Corporation for the purposes of such registration, addressed to the
underwriters and to such seller, 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.
For purposes of paragraphs (a) and (b) above, the period of
distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Restricted Stock covered thereby or 120 days
after the effective date thereof.
In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Corporation in writing such information
with respect to themselves and the proposed distribution by them as reasonably
shall be necessary in order to assure compliance with federal and applicable
state securities laws.
6. Expenses. All expenses incurred by the Corporation in complying with
Section 4, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Corporation, fees of the National Association of Securities
Dealers, Inc., transfer taxes, fees of transfer agents and registrars, costs of
insurance and fees and expenses of one counsel for the sellers of Restricted
Stock, but excluding any Selling Expenses, are herein called "Registration
Expenses." All underwriting discounts and selling commissions applicable to the
sale of Restricted Stock are called "Selling Expenses."
The Corporation will pay all Registration Expenses in connection with
each registration statement under Section 4. All Selling Expenses in connection
with each registration statement under Section 4 shall be borne by the
participating
-5-
Purchasers in proportion to the number of shares sold by each, or by such
participating Purchasers other than the Corporation (except to the extent the
Corporation shall be a seller) as they may agree.
7. Indemnification and Contribution. In the event of a registration of
any of the Restricted Stock under the Securities Act pursuant to Section 4, the
Corporation will indemnify and hold harmless each seller of such Restricted
Stock thereunder and each underwriter of such Restricted Stock thereunder and
each other person, if any, who controls such seller or underwriter within the
meaning of the Securities Act, against any and all losses, claims, damages or
liabilities, joint or several, to which such seller, underwriter or controlling
person may become subject under the Securities Act 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
Restricted Stock was registered under the Securities Act pursuant to Section 4,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each such seller, each such underwriter and each such controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Corporation will not be liable in any such
case if and to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information furnished by
any such seller, any such underwriter or any such controlling person in writing
specifically for use in such registration statement or prospectus.
In the event of a registration of any of the Restricted Stock under the
Securities Act pursuant to Section 4, each seller of such Restricted Stock
thereunder, severally and not jointly, will indemnify and hold harmless the
Corporation and each person, if any, who controls the Corporation within the
meaning of the Securities Act, each officer of the Corporation who signs the
registration statement, each director of the Corporation, each underwriter and
each person who controls any underwriter within the meaning of the Securities
Act, against all losses, claims, damages or liabilities, joint or several, to
which the Corporation or such officer, director, underwriter or controlling
person may become subject under the Securities Act 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 the registration statement under which such
Restricted Stock was registered under the Securities Act pursuant to Section 4,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein
-6-
not misleading, and will reimburse the Corporation and each such officer,
director, underwriter and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action, provided, however, that such
seller will be liable hereunder in any such case if and only to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information pertaining to such
seller, as such, furnished in writing to the Corporation by or on behalf of such
seller specifically for use in such registration statement or prospectus, and
provided, further, however, that the liability of each seller hereunder shall
not in any event exceed the proceeds received by such seller from the sale of
Restricted Stock covered by such registration statement.
Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 7. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified party
of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 7 for any
legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof; provided, however, that, if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party or if the indemnifying party shall not in fact have employed counsel to
assume the defense of such action, the indemnified party shall have the right to
select a separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and foes of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the
right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless: (i) the indemnifying party shall have failed to retain counsel for the
indemnified person as aforesaid; or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel.
It is understood that the
-7-
indemnifying party shall not, in connection with any action or related actions
in the same jurisdiction, be liable for the fees and disbursements of more than
one separate firm qualified in such jurisdiction to act as counsel for the
indemnified party. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
If the indemnification provided for in the first two paragraphs of this
Section 7 is unavailable to or insufficient to hold harmless as indemnified
party under such paragraphs in respect of any losses, claims, damages or
liabilities or actions in respect thereof referred to therein, then each
indemnifying party shall in lieu of indemnifying such indemnified party
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Corporation, on the one hand,
and the sellers of such Restricted Stock, on the other, in connection with the
statement or omissions which resulted in such losses, claims, damages,
liabilities or actions, as well as any other relevant equitable considerations
including the failure to give any notice under the third paragraph of this
Section 7. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Corporation, on the one hand, or by the sellers of such
Restricted Stock, on the other, and to the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Corporation and the sellers of Restricted Stock agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if all of the sellers of Restricted
Stock were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
action in respect thereof, referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this and the immediately preceding paragraph,
the sellers of such Restricted Stock shall not be required to contribute any
amount in excess of the proceeds received by it. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
-8-
The indemnification of underwriters provided for in this Section 7
shall be on such other terms and conditions as are at the time customary and
reasonably required by such underwriters. In that event the indemnification of
the sellers of Restricted Stock in such underwriting shall at the sellers'
request be modified to conform to such terms and conditions.
8. Changes in Common Stock. If, and as often as, there is any change in
the Common Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Common Stock as so changed.
9. "Stand-Off" Agreement. If requested by the corporation and the
managing underwriter of an offering by the Corporation of Common Stock or other
securities of the Corporation pursuant to a Registration Statement, you and any
subsequent holders of Restricted Stock shall agree not to sell publicly or
otherwise transfer or dispose of any Restricted Stock held by such holder for a
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 of the Corporation
holding not less than the number of shares of Common Stock held by such holder
of convertible securities, or upon the exercise of options, warrants or rights)
and all officers and directors of the Corporation enter into similar agreements;
and (ii) all stockholders of the Corporation shall be released from such
stand-off agreement, if any stockholders are released, on a pro rata basis, with
no stockholder having any right to offer and sell Restricted Stock free from
such stand-off provisions before any other stockholder.
10. Representations and Warranties of the Corporation. The Corporation
represents and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by the
Corporation have been duly authorized by all requisite corporate action
and will not violate any provision of law, any order of any court or
other agency of government, the Charter or By-laws of the Corporation
or any provision of any indenture, agreement or other instrument to
which it or any or its properties or assets is bound, conflict with,
result in a breach of or constitute (with due notice or lapse of time
or both) a default under any such indenture, agreement or other
instrument or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the properties or
assets of the Corporation.
-9-
(b) This Agreement has been duly executed and delivered by the Corporation
and constitutes the legal, valid and binding obligation of the
Corporation, enforceable in accordance with its terms.
11. Rule 144 Reporting. The Corporation agrees with each of you as
follows:
(a) The Corporation shall make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities
Act, at all times from and after 90 days following the effective date
of the first registration of the Corporation under the Securities Act
of an offering of its securities to the general public.
(b) The Corporation shall file with the Commission in a timely manner all
reports and other documents as the Commission may prescribe under
Section 13(a) or 15(d) of the Exchange Act at any time after the
Corporation has become subject to such reporting requirements of the
Exchange Act.
(c) The Corporation shall furnish to each holder of Restricted Stock
forthwith upon request: (i) a written statement by the Corporation as
to its compliance with the reporting requirements of Rule 144 (at any
time from and after 90 days following the effective date of the first
registration statement of the Corporation for an offering of its
securities to the general public), and of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements); (ii) a copy of the most recent annual or quarterly
report of the Corporation; and (iii) such other reports and documents
so filed as a holder may reasonably request to avail itself of any rule
or regulation of the Commission allowing a holder of Restricted Stock
to sell any such securities without registration.
12. Miscellaneous.
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto whether
so expressed or not. Without limiting the generality of the foregoing,
the registration rights conferred herein on the holders of Restricted
Stock shall only inure to the benefit of holders of at least 25,000
shares of Restricted Stock, and
-10-
shall only inure to any such holders for so long as the certificates
representing the Restricted Stock shall be required to bear the legend
specified in Section 2 hereof.
(b) All notices, requests, consents and other communications hereunder
shall be in writing and shall be mailed by first class mail, postage
prepaid, addressed as follows:
If to the Corporation:
Casella Waste Management, Inc.
25 Greens Hill Lane
Rutland, VT 05701
If to the Purchasers:
Susan Olivieri
79 East Wilder Road
West Lebanon, NH 03784
Robert MacNeil
79 East Wilder Road
West Lebanon, NH 03784
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of Vermont.
(d) This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and may not be modified or amended
except by the written agreement of all of the parties.
(e) 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) The parties hereto acknowledge that the Corporation is party to a
Registration Rights Agreement dated as of December 22, 1995 with the
purchasers of its Series D Preferred Stock and others (the "1995
Registration Rights Agreement"), and that the 1995 Registration Rights
Agreement prohibits the Corporation from entering into an agreement
with any other person unless, under the terms of any such agreement,
such person may include securities in a registration only on terms
substantially similar to
-11-
the terms on which parties to the 1995 Registration Rights Agreement
may include shares in such registration. Accordingly, the parties
hereto agree that, at the written request or the Corporation, this
Agreement will be deemed amended to comply with the requirement set
forth in the preceding sentence upon determination by the Board of
Directors of the Corporation that such an amendment is necessary to
avoid a violation of the 1995 Registration Rights Agreement.
Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this Agreement
shall be a binding agreement between the Corporation and you.
Very truly yours,
CASELLA WASTE SYSTEMS, INC.
AGREED TO AND ACCEPTED as of the date first above written.
--------------------------------
Susan Olivieri
--------------------------------
Robert MacNeil
-12-
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
THE SALE, TRANSFER AND ENCUMBRANCE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A 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 MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY
OF CASELLA WASTE SYSTEMS, INC.
May 25, 1994
STOCK PURCHASE WARRANT
To Subscribe for and Purchase Class A Common Stock of
CASELLA WASTE SYSTEMS, INC.
VOID AFTER OCTOBER 31, 2003
R1994-7
THIS CERTIFIES that, for value received, JOHN W. CASELLA, or
registered assigns, is entitled, subject to the terms of Section 1 hereof, to
subscribe for and purchase from Casella Waste Systems, Inc., a Delaware
corporation (hereinafter called the "Company"), at the price of $0.01 per share
(such price, as from time to time to be adjusted as hereinafter provided, being
hereinafter called the "Warrant Price"), at any time on or prior to October 31,
2003 up to 13,500 fully paid, nonassessable shares of Class A Common Stock, $.01
par value, of the Company ("Class A Common Stock"), subject, however, to the
provisions and upon the terms and conditions hereinafter set forth.
Section 1. Exercise of Warrant. This Warrant may be exercised by the
holder hereof, in whole or in part (but not as to a fractional share of Class A
Common Stock), by the completion of the subscription form attached hereto and by
the surrender of this Warrant (properly endorsed) at the office of the Company
in Rutland, Vermont (or at such other agency or office of the Company in the
United
States as it may designate by notice in writing to the holder hereof at the
address of the holder hereof appearing on the books of the Company), and by
payment to the Company of the Warrant Price, in cash or by certified or official
bank check, for each share being purchased. In the event of any exercise of the
rights represented by this Warrant, a certificate or certificates for the shares
of Class A Common Stock so purchased, registered in the name of the holder
hereof, shall be delivered to the holder hereof within a reasonable time, not
exceeding five business days, after the rights represented by this Warrant shall
have been so exercised; and, unless this Warrant has expired or been exercised
in full, a new Warrant representing the number of shares (except a remaining
fractional share), if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to the holder hereof within such time.
With respect to any such exercise, the holder hereof shall for all purposes be
deemed to have become the holder of record of the number of shares of Class A
Common Stock evidenced by such certificate or certificates from the date on
which this Warrant was surrendered and payment of the Warrant Price was made
irrespective of the date of delivery of such certificate, except that, if the
date of such surrender and payment is a date on which the stock transfer books
of the Company are closed, such person shall be deemed to have become the holder
of such shares at the close of business on the next succeeding date on which the
stock transfer books are open. No fractional shares shall be issued upon
exercise of this Warrant. If any fractional interest in a share of Class A
Common Stock would, except for the provisions of this Section 1, be delivered
upon any such exercise, the Company, in lieu of delivering the fractional share
thereof, shall pay to the holder hereof an amount in cash equal to the current
market price of such fractional interest as determined in good faith by the
Board of Directors of the Company.
Section 2. Adjustment of Number of Shares. Upon each adjustment of the
Warrant Price as provided herein, the holder of this Warrant shall thereafter be
entitled to purchase, at the Warrant Price resulting from such adjustment, the
number of shares (calculated to the nearest tenth of a share) obtained by
multiplying the Warrant Price in effect immediately prior to such adjustment by
the number of shares purchasable pursuant hereto immediately prior to such
adjustment and dividing the product thereof by the Warrant Price resulting from
such adjustment.
Section 3. Adjustment of Price Upon Issuance of Common Stock. Except with
respect to the issuance of shares of Class A Common Stock that constitute a
Permitted Stock Transaction under Subsection 5.7 of the 1994 Purchase Agreement,
if and whenever the Company shall issue or sell any shares of its Common Stock
(as defined in paragraph (n) of this Section 3) for a consideration per share
less than the Warrant Price in effect immediately prior to the time of such
issue or sale, then, forthwith upon such issue or sale, the Warrant Price shall
be reduced to the price (calculated to the nearest $.001) determined by dividing
(a) an amount equal to the sum of: (x) the number of shares of Common Stock
outstanding immediately prior to such issue or sale (including as outstanding
all shares of Class A Common Stock
-2-
issuable upon exercise of this Warrant immediately prior to such issue or sale)
multiplied by the then existing Warrant Price; and (y) the consideration, if
any, received by the Company upon such issue or sale, by (b) the total number of
shares of Common Stock outstanding immediately after such issue or sale
(including as outstanding all shares of Class A Common Stock issuable upon
exercise of this Warrant immediately prior to such issue or sale). No
adjustments of the Warrant Price, however, shall be made in an amount less than
$.001 per share, but any such lesser adjustment shall be carried forward and
shall be made at the time and together with the next subsequent adjustment which
together with any adjustments so carried forward shall amount to $.001 per share
or more.
For purposes of this Section 3, the following paragraphs (a) to (n),
inclusive, shall also be applicable.
(a) Issuance of Rights of Options. In case at any time the Company
shall in any manner grant (whether directly or by assumption in a
merger or otherwise) any rights to subscribe for or to purchase,
or any options for the purchase of, Common Stock or any stock or
securities convertible into or exchangeable for Common Stock (such
rights or options being herein called "Options" and such
convertible or exchangeable stock or securities being herein
called "Convertible Securities"), whether or not such Options or
the right to convert or exchange any such Convertible Securities
are immediately exercisable, and the price per share for which
Common Stock is issuable upon the exercise of such Options or upon
conversion or exchange or such Convertible Securities (determined
by dividing: (i) the total amount, if any, received or receivable
by the Company as consideration for the granting of such Options,
plus the minimum aggregate amount of additional consideration
payable to the Company upon the exercise of all such Options,
plus, in the case of such Options which relate to Convertible
Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange
thereof; by (ii) the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable
upon the exercise of such Options) shall be less than the Warrant
Price in effect immediately prior to the time of the granting of
such Options, then the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon
conversion or exchange or the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options
shall be deemed to have been issued for such price per share as of
the date of granting of such Options and thereafter shall be
deemed to be outstanding. Except as otherwise provided in
paragraph (c), no adjustment of the Warrant Price shall be made
upon
-3-
the actual issue of such Common Stock or of such Convertible
Securities upon exercise of such Options or upon the actual issue
of such Common Stock upon conversion or exchange of such
Convertible Securities.
(b) Issuance of Convertible Securities. In case the Company shall
in any manner issue (whether directly or by assumption in a merger
or otherwise) or sell any Convertible Securities, whether or not
the rights to exchange or convert thereunder are immediately
exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange (determined by dividing:
(i) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion
or exchange of all such Convertible Securities; by (ii) the total
maximum number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities) shall
be less than the Warrant Price in effect immediately prior to the
time of such issue or sale, then the total maximum number of
shares of Common Stock issuable upon conversion or exchange of all
such Convertible Securities shall be deemed to have been issued
for such price per share as of the date of the issue or sale of
such Convertible Securities and thereafter shall be deemed to be
outstanding, provided that: (i) except as otherwise provided in
paragraph (c) below, no adjustment of the Warrant Price shall be
made upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities; and (ii) if any such
issue or sale of such Convertible Securities is made upon exercise
of any Option to purchase any such Convertible Securities for
which adjustments of the Warrant Price have been or are to be made
pursuant to other provisions of this Section 3, no further
adjustment of the Warrant Price shall be made by reason of such
issue or sale.
(c) Change in Option Price or Conversion Rate. Upon the happening
of any of the following events, namely, if the purchase price
provided for in any Option referred to in paragraph (a), the
additional consideration if any, payable upon the conversion or
exchange of any Convertible Securities referred to in paragraph
(a) or (b), or the rate at which any Convertible Securities
referred to in paragraph (a) or (b) are convertible into or
exchangeable for Common Stock shall change at any time (other than
under or by reason of provisions designed to protect against
dilution), the Warrant Price in effect at the time of such event
shall forthwith be readjusted to the Warrant Price which would
have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case
may be, at the time initially
-4-
granted, issued or sold; and on the expiration of any such Option
or the termination of any such right to convert or exchange such
Convertible Securities, the Warrant Price then in effect hereunder
shall forthwith be increased to the Warrant Price which would have
been in effect at the time of such expiration or termination had
such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been
issued, and the Common Stock issuable thereunder shall no longer
be deemed to be outstanding.
(d) Stock Dividends. In case the Company shall declare a dividend
or make any other distribution upon any stock of the Company
payable in Common Stock, Options or Convertible Securities, any
Common Stock, Options or Convertible Securities, as the case may
be, issuable in payment of such dividend or distribution shall be
deemed to have been issued in a subdivision of outstanding shares
as provided in paragraph (h) below.
(e) Consideration for Stock. In case any shares of Common Stock,
Options or Convertible Securities shall be issued or sold for
cash, the consideration received therefor shall be deemed to be
the amount received by the Company therefor, without reduction
therefrom of any expenses incurred or any underwriting commissions
or concessions paid or allowed by the Company in connection
therewith. In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold for a consideration
other than cash, the amount of the consideration other than cash
received by the Company shall be deemed to be the fair value of
such consideration as determined in good faith by the Board of
Directors of the Company, without deduction of any expenses
incurred or any underwriting commissions or concessions paid or
allowed by the Company in connection therewith. The amount of
consideration deemed to be received by the Company pursuant to the
foregoing provisions of this paragraph (e) upon any issue or sale,
pursuant to any established compensation plan of the Company to
directors, officers or employees of the Company in connection with
their employment, of shares of Common Stock, Options or
Convertible Securities shall be increased by the amount of any tax
benefit realized by the Company as a result of such issue or sale,
the amount of such tax benefit being the amount by which the
Federal and/or State income or other tax liability of the Company
shall be reduced by reason of any deduction or credit in respect
of such issue or sale. In case any Options shall be issued in
connection with the issue and sale or other securities of the
Company, together comprising one integral transaction in which no
specific consideration is allocated to such Options by the parties
thereto, such Options shall be deemed to have been issued without
consideration. In
-5-
case any shares of Common Stock, Options or Convertible Securities
shall be issued in connection with any merger or consolidation in
which the Company is the surviving corporation, the amount of
consideration therefore shall be deemed to be the fair value as
determines in good faith by the Board of Directors of the Company
of such portion of the assets and business of the non-surviving
corporation as such Board shall determine to be attributable to
such Common Stock, Options or Convertible Securities, as the case
may be. In the event of any consolidation or merger of the Company
in which the Company is not the surviving corporation or in the
event of any sale of all or substantially all the assets of the
Company for stock or other securities of any corporation, the
Company shall be deemed to have issued a number of shares of its
Common Stock for stock or securities of the other corporation
computed on the basis of the actual exchange ratio on which the
transaction was predicated and for a consideration equal to the
fair market value on the date of such transaction of such stock or
securities of the other corporation, and, if any such calculation
results in adjustment of the Warrant Price, the determination of
the number of shares of Common Stock receivable under this Warrant
immediately prior to such merger, consolidation or sale, for
purposes of paragraph (j), shall be made after giving effect to
such adjustment of the Warrant Price.
(f) Record Date. In case the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them: (i)
to receive a dividend or other distribution payable in Common
Stock, Options or Convertible Securities; or (ii) to subscribe for
or purchase Common Stock, Options or Convertible Securities, then
such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of
subscription or purchase, as the case may be.
(g) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of
any such shares shall be considered an issue or sale of Common
Stock for the purposes of this Section 3.
(h) Subdivision or Combination of Stock. In case the Company shall
at any time subdivide its outstanding shares of Common Stock into
a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall be proportionately
reduced, i.e., the holder shall be entitled to purchase after such
subdivision, for the same
-6-
consideration as applicable prior to such subdivision, the same
percentage of outstanding Common Stock that such holder was
entitled to purchase prior to such subdivision, and conversely, in
case the outstanding shares of Common Stock of the Company shall
be combined into a smaller number of shares, the Warrant Price in
effect immediately prior to such combination shall be
proportionately increased.
i) Reorganization, Reclassification, Consolidation, Merger or
Sale. If any capital reorganization or reclassification of the
capital stock of the Company or any consolidation or merger of the
Company with another corporation, or the sale of all or
substantially all its assets to another corporation shall be
effected in such a way that holders of Common Stock shall be
entitled to receive stock, securities or assets with respect to or
in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale,
lawful and adequate provisions shall be made whereby each holder
of the Warrants shall thereafter have the right to receive upon
the basis and upon the terms and conditions specified herein and
in lieu of the shares of Common Stock of the Company immediately
theretofore receivable upon the exercise of such Warrant or
Warrants, such shares of stock, securities or assets (including
cash) as may be issued or payable with respect to or in exchange
for a number of outstanding shares of Common Stock equal to the
number of shares of such stock immediately theretofore so
receivable had such reorganization, reclassification,
consolidation, merger or sale not taken place, and in any such
case appropriate provision shall be made with respect to the
rights and interests of such holder to the end that the provisions
hereof (including, without limitation, provisions for adjustments
of the Warrant Price) shall thereafter be applicable, as nearly as
may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise of such Warrants
(including an immediate adjustment, by reason or such
consolidation or merger, of the Warrant Price to the value for the
Common Stock reflected by the terms of such consolidation or
merger if the value so reflected is less than the Warrant Price in
effect immediately prior to such consolidation or merger). In the
event of a merger or consolidation of the Company as a result of
which a greater or lesser number of shares of common stock of the
surviving corporation are issuable to holders of Common Stock of
the Company outstanding immediately prior to such merger or
consolidation, the Warrant Price in effect immediately prior to
such merger or consolidation shall be adjusted in the same manner
as though there were a subdivision or combination of the
outstanding shares of Common Stock of the Company. The Company
will not effect any such
-7-
consolidation, merger or sale, unless prior to the consummation
thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation
purchasing such assets shall assume, by written instrument
executed and mailed or delivered to each Warrantholder at the last
address of such holder appearing on the books of the Company, the
obligation to deliver to such holder such shares of stock,
securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to receive upon exercise
of such Warrants.
(j) Notice of Adjustment. Upon any adjustment of the Warrant
Price, then and in each such case the Company shall give written
notice thereof, by first class mail, postage prepaid, addressed to
each Warrantholder at the address of such holder as shown on the
books of the Company, which notice shall state the Warrant Price
resulting from such adjustment, setting forth in reasonable detail
the method of calculation and the facts upon which such
calculation is based.
(k) Stock to Be Reserved. The Company will at all times reserve
and keep available out of its authorized Common Stock or its
treasury shares, solely for the purpose of issuance upon the
exercise of this Warrant as herein provided, such number of shares
of Common Stock as shall then be issuable upon the exercise of
this Warrant. The Company covenants that all shares of Common
Stock which shall be so issued shall be duly and validly issued
and fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Company covenants
that it will from time to time take all such action as may be
requisite to assure that the par value per share of the Common
Stock is at all times equal to or less than the effective Warrant
Price. The Company will take all such action as may be necessary
to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any
requirements of any national securities exchange upon which the
Common Stock of the Company may be listed. The Company will not
take any action which results in any adjustment of the Warrant
Price if the total number of shares of Common Stock issued and
issuable after such action upon exercise of this Warrant would
exceed the total number of shares of Common Stock then authorized
by the Company's Certificate of Incorporation. The Company has not
granted and will not grant any right of first refusal with respect
to shares issuable upon exercise of this Warrant, and there are no
preemptive rights associated with such shares.
-8-
(l) Issue Tax. The issuance of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge
to the holder hereof for any issuance tax in respect thereof,
provided that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that
of the Warrant holder.
(m) Closing of Books. The Company will at no time close its
transfer books against the transfer of the shares of Common Stock
issued or issuable upon the exercise of this Warrant in any manner
which interferes with the timely exercise of this Warrant.
(n) Definition of Common Stock. As used herein the term "Common
Stock" shall mean and include the Class A Common Stock, $.01 par
value, of the Company and the Class B Common Stock, $.01 par
value, of the Company, as authorized on May 25, 1994 and also any
capital stock of any class of the Company hereinafter authorized
which shall not be limited to a fixed sum or percentage in respect
of the rights of the holders thereof to participate in dividends
or in the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the Company; provided,
however, that the shares purchasable pursuant to this Warrant
shall include only shares designated as Class A Common Stock, $.01
par value, of the Company on May 25, 1994, or shares of any class
or classes resulting from any reclassification or
reclassifications thereof and in case at any time there shall be
more than one such resulting class, the shares of each class then
so issuable shall be substantially in the proportion which the
total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.
Section 4. Notices of Record Dates. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other
distribution (other than cash dividends out of earned surplus), or
any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property,
or to receive any right to sell shares of stock of any class or
any other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all
-9-
or substantially all the assets of the Company to or consolidation
or merger of the Company with or into any other corporation or
entity; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then and in each such event the Company
will give notice to the holder of this Warrant specifying: (i) the
date on which any such record is to be taken for the purpose of
such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right; and (ii) the
date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution,
liquidation or winding-up is to take place, and the time, if any
is to be fixed, as of which the holders of record of Common Stock
will be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up. Such notice shall
be given at least 20 days and not more than 90 days prior to the
date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the
effectiveness of a registration statement under the Securities Act
of 1933 and applicable state securities laws, or (y) a favorable
vote of stockholders, if either is required.
Section 5. No Stockholder Rights or Liabilities.
(a) Except as set forth in paragraph (b) of this Section 5 and in
the Stockholders Agreement, this Warrant shall not entitle the
holder hereof to any voting rights or other rights as a
stockholder of the Company. No provision hereof, in the absence of
affirmative action by the holder hereof to purchase shares of
Common Stock, and no mere enumeration herein of the rights or
privileges of the holder hereof shall give rise to any liability
of such holder for the Warrant Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by
creditors of the Company.
(b) At any time while this Warrant is outstanding, the Company
shall, prior to making any distribution of its property or assets
to the holders of its Common Stock as a dividend in liquidation or
partial liquidation or by way of return of capital or any dividend
payable out of funds legally available for dividends under the
laws of the State of Delaware, give to the holder of this Warrant,
not less than 20 days' prior written notice of any such
distribution. If such holder shall exercise this Warrant on or
prior to the date of such distribution set forth in such notice,
such holder shall be entitled to receive, upon such exercise: (i)
the number of shares of Common Stock receivable pursuant to such
exercise; and (ii)
-10-
without payment of any additional consideration, a sum equal to
the amount of such property or assets as would have been payable
to the holder hereof as an owner of the shares described in clause
(i) of this paragraph (b) had the holder hereof been the holder of
record of such shares on the record date for such distribution;
and an appropriate provision with respect to such payment to such
holder as described in this paragraph (b) shall be made a part of
any such distribution.
Section 6. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
is lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 7. Notices. All notices, requests and other communications
required or permitted to be given or delivered hereunder shall be in writing,
and shall be delivered, or shall be sent by certified or registered mail,
postage prepaid and addressed, if to the holder to such holder at the address
shown on the records of the Company or at such other address as shall have been
furnished to the Company by notice from such holder. All notices, requests and
other communications required or permitted to be given or delivered hereunder
shall be in writing, and shall be delivered, or shall be sent by certified or
registered mail, postage prepaid and addressed to the Company, at P.O. Box 866,
Rutland, Vermont 05701; Attention: President, or at such other address as shall
have been furnished to the holder by notice from the Company.
Section 8. Law Governing. This Warrant shall be governed by and construed
in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, CASELLA WASTE SYSTEMS, INC., has executed this
Warrant on and as of the 25th day of May, 1994.
CASELLA WASTE SYSTEMS, INC.
By:________________________________
President
[Corporate Seal]
Attest:
- ---------------------------------------
Secretary
-11-
SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THE WARRANT
[Date]
To Casella Waste Systems, Inc.:
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to subscribe for and purchase [specify] shares of Class A
Common Stock covered by such Warrant, and herewith tenders $[specify} in full
payment of the purchase price for such shares.
Name of Holder:
By:_______________________________________
Address:__________________________________
__________________________________
-12-
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
THE SALE, TRANSFER AND ENCUMBRANCE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A 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 MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY
OF CASELLA WASTE SYSTEMS, INC.
May 25, 1994
STOCK PURCHASE WARRANT
To Subscribe for and Purchase Class A Common Stock of
CASELLA WASTE SYSTEMS, INC.
VOID AFTER OCTOBER 31, 2003
R1994-8
THIS CERTIFIES that, for value received, DOUGLAS R. CASELLA, or
registered assigns, is entitled, subject to the terms of Section 1 hereof, to
subscribe for and purchase from Casella Waste Systems, Inc., a Delaware
corporation (hereinafter called the "Company"), at the price of $0.01 per share
(such price, as from time to time to be adjusted as hereinafter provided, being
hereinafter called the "Warrant Price"), at any time on or prior to October 31,
2003 up to 13,500 fully paid, nonassessable shares of Class A Common Stock, $.01
par value, of the Company ("Class A Common Stock"), subject, however, to the
provisions and upon the terms and conditions hereinafter set forth.
Section 1. Exercise of Warrant. This Warrant may be exercised by the
holder hereof, in whole or in part (but not as to a fractional share of Class A
Common Stock), by the completion of the subscription form attached hereto and by
the surrender of this Warrant (properly endorsed) at the office of the Company
in Rutland, Vermont (or at such other agency or office of the Company in the
United States as it may designate by notice in writing to the holder hereof at
the address of the holder hereof appearing on the books of the Company), and by
payment to the
Company of the Warrant Price, in cash or by certified or official bank check,
for each share being purchased. In the event of any exercise of the rights
represented by this Warrant, a certificate or certificates for the shares of
Class A Common Stock so purchased, registered in the name of the holder hereof,
shall be delivered to the holder hereof within a reasonable time, not exceeding
five business days, after the rights represented by this Warrant shall have been
so exercised; and, unless this Warrant has expired or been exercised in full, a
new Warrant representing the number of shares (except a remaining fractional
share), if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the holder hereof within such time. With
respect to any such exercise, the holder hereof shall for all purposes be deemed
to have become the holder of record of the number of shares of Class A Common
Stock evidenced by such certificate or certificates from the date on which this
Warrant was surrendered and payment of the Warrant Price was made irrespective
of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the stock transfer
books are open. No fractional shares shall be issued upon exercise of this
Warrant. If any fractional interest in a share of Class A Common Stock would,
except for the provisions of this Section 1, be delivered upon any such
exercise, the Company, in lieu of delivering the fractional share thereof, shall
pay to the holder hereof an amount in cash equal to the current market price of
such fractional interest as determined in good faith by the Board of Directors
of the Company.
Section 2. Adjustment of Number of Shares. Upon each adjustment of the
Warrant Price as provided herein, the holder of this Warrant shall thereafter be
entitled to purchase, at the Warrant Price resulting from such adjustment, the
number of shares (calculated to the nearest tenth of a share) obtained by
multiplying the Warrant Price in effect immediately prior to such adjustment by
the number of shares purchasable pursuant hereto immediately prior to such
adjustment and dividing the product thereof by the Warrant Price resulting from
such adjustment.
Section 3. Adjustment of Price Upon Issuance of Common Stock. Except with
respect to the issuance of shares of Class A Common Stock that constitute a
Permitted Stock Transaction under Subsection 5.7 of the 1994 Purchase Agreement,
if and whenever the Company shall issue or sell any shares of its Common Stock
(as defined in paragraph (n) of this Section 3) for a consideration per share
less than the Warrant Price in effect immediately prior to the time of such
issue or sale, then, forthwith upon such issue or sale, the Warrant Price shall
be reduced to the price (calculated to the nearest $.001) determined by dividing
(a) an amount equal to the sum of: (x) the number of shares of Common Stock
outstanding immediately prior to such issue or sale (including as outstanding
all shares of Class A Common Stock issuable upon exercise of this Warrant
immediately prior to such issue or sale) multiplied by the then existing Warrant
Price; and (y) the consideration, if any,
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received by the Company upon such issue or sale, by (b) the total number of
shares of Common Stock outstanding immediately after such issue or sale
(including as outstanding all shares of Class A Common Stock issuable upon
exercise of this Warrant immediately prior to such issue or sale). No
adjustments of the Warrant Price, however, shall be made in an amount less than
$.001 per share, but any such lesser adjustment shall be carried forward and
shall be made at the time and together with the next subsequent adjustment which
together with any adjustments so carried forward shall amount to $.001 per share
or more.
For purposes of this Section 3, the following paragraphs (a) to (n),
inclusive, shall also be applicable:
(a) Issuance of Rights or Options. In case at any time the Company
shall in any manner grant (whether directly or by assumption in a
merger or otherwise) any rights to subscribe for or to purchase,
or any options for the purchase of, Common Stock or any stock or
securities convertible into or exchangeable for Common Stock (such
rights or options being herein called "Options" and such
convertible or exchangeable stock or securities being herein
called "Convertible Securities"), whether or not such Options or
the right to convert or exchange any such Convertible Securities
are immediately exercisable, and the price per share for which
Common Stock is issuable upon the exercise of such Options or upon
conversion or exchange of such Convertible Securities (determined
by dividing: (i) the total amount, if any, received or receivable
by the Company as consideration for the granting of such Options,
plus the minimum aggregate amount of additional consideration
payable to the Company upon the exercise of all such Options,
plus, in the case of such Options which relate to Convertible
Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange
thereof; by (ii) the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable
upon the exercise of such Options) shall be less than the Warrant
Price in effect immediately prior to the time of the granting of
such Options, then the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon
conversion or exchange or the total maximum amount of such
Convertible Securities issuable upon the exercise of such options
shall be deemed to have been issued for such price per share as of
the date of granting of such Options and thereafter shall be
deemed to be outstanding. Except as otherwise provided in
paragraph (c), no adjustment of the Warrant Price shall be made
upon the actual issue of such Common Stock or of such Convertible
Securities
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upon exercise of such Options or upon the actual issue of such
Common Stock upon conversion or exchange of such Convertible
Securities.
(b) Issuance of Convertible Securities. In case the Company shall
in any manner issue (whether directly or by assumption in a merger
or otherwise) or sell any Convertible Securities, whether or not
the rights to exchange or convert thereunder are immediately
exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange (determined by dividing:
(i) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion
or exchange of all such Convertible Securities; by (ii) the total
maximum number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities) shall
be less than the Warrant Price in effect immediately prior to the
time of such issue or sale, then the total maximum number of
shares of Common Stock issuable upon conversion or exchange of all
such Convertible Securities shall be deemed to have been issued
for such price per share as of the date of the issue or sale of
such Convertible Securities and thereafter shall be deemed to be
outstanding, provided that: (i) except as otherwise provided in
paragraph (c) below, no adjustment of the Warrant Price shall be
made upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities; and (ii) if any such
issue or sale of such Convertible Securities is made upon exercise
of any Option to purchase any such Convertible Securities for
which adjustments of the Warrant Price have been or are to be made
pursuant to other provisions of this Section 3, no further
adjustment of the Warrant Price shall be made by reason of such
issue or sale.
(c) Change in Option Price or Conversion Rate. Upon the happening
of any of the following events, namely, if the purchase price
provided for in any Option referred to in paragraph (a), the
additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in paragraph
(a) or (b), or the rate at which any Convertible Securities
referred to in paragraph (a) or (b) are convertible into or
exchangeable for Common Stock shall change at any time (other than
under or by reason of provisions designed to protect against
dilution), the Warrant Price in effect at the time of such event
shall forthwith be readjusted to the Warrant Price which would
have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case
may be, at the time initially granted, issued or sold; and on the
expiration of any such Option or the
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termination of any such right to convert or exchange such
Convertible securities, the Warrant Price then in effect hereunder
shall forthwith be increased to the Warrant Price which would have
been in effect at the time of such expiration or termination had
such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been
issued, and the Common Stock issuable thereunder shall no longer
be deemed to be outstanding.
(d) Stock Dividends. In case the Company shall declare a dividend
or make any other distribution upon any stock of the Company
payable in Common Stock, Options or Convertible Securities, any
Common Stock, Options or Convertible Securities, as the case may
be, issuable in payment of such dividend or distribution shall be
deemed to have been issued in a subdivision of outstanding shares
as provided in paragraph (h) below.
(e) Consideration for Stock. In case any shares of Common Stock,
Options or Convertible Securities shall be issued or sold for
cash, the consideration received therefor shall be deemed to be
the amount received by the Company therefor, without reduction
therefrom of any expenses incurred or any underwriting commissions
or concessions paid or allowed by the Company in connection
therewith. In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold for a consideration
other than cash, the amount of the consideration other than cash
received by the Company shall be deemed to be the fair value of
such consideration as determined in good faith by the Board of
Directors of the Company, without deduction of any expenses
incurred or any underwriting commissions or concessions paid or
allowed by the Company in connection therewith. The amount of
consideration deemed to be received by the Company pursuant to the
foregoing provisions of this paragraph (e) upon any issue or sale,
pursuant to an established compensation plan of the Company to
directors, officers or employees of the Company in connection with
their employment, of shares of Common Stock, Options or
Convertible Securities shall be increased by the amount of any tax
benefit realized by the Company as a result of such issue or sale,
the amount of such tax benefit being the amount by which the
Federal and/or State income or other tax liability of the Company
shall be reduced by reason of any deduction or credit in respect
of such issue or sale. In case any Options
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shall be issued in connection with the issue and sale of other
securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to
such Options by the parties thereto, such options shall be deemed
to have been issued without consideration. In case any shares of
Common Stock, Options or Convertible Securities shall be issued in
connection with any merger or consolidation in which the Company
is the surviving corporation, the amount of consideration therefor
shall be deemed to be the fair value as determined in good faith
by the Board of Directors of the Company of such portion of the
assets and business of the non-surviving corporation as such Board
shall determine to be attributable to such Common Stock, Options
or Convertible Securities, as the case may be. In the event of any
consolidation or merger of the Company in which the Company is not
the surviving corporation or in the event of any sale of all or
substantially all the assets of the Company for stock or other
securities of any corporation, the Company shall be deemed to have
issued a number of shares of its Common Stock for stock or
securities of the other corporation computed on the basis of the
actual exchange ratio on which the transaction was predicated and
for a consideration equal to the fair market value on the date of
such transaction of such stock or securities of the other
corporation, and, if any such calculation results in adjustment of
the Warrant Price, the determination of the number of shares of
Common Stock receivable under this Warrant immediately prior to
such merger, consolidation or sale, for purposes of paragraph (j),
shall be made after giving effect to such adjustment of the
Warrant Price.
(f) Record Date. In case the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them: (i)
to receive a dividend or other distribution payable in Common
Stock, Options or Convertible Securities; or (ii) to subscribe for
or purchase Common Stock, Options or Convertible Securities, then
such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of
subscription or purchase, as the case may be.
(g) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of
any such shares shall be considered an issue or sale of Common
Stock for the purposes of this Section 3.
(h) Subdivision or Combination of Stock. In case the Company shall
at any time subdivide its outstanding shares of Common Stock into
a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall be proportionately
reduced, i.e., the holder shall be entitled to purchase after such
subdivision, for the same consideration as applicable prior to
such subdivision, the same
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percentage of outstanding Common Stock that such holder was
entitled to purchase prior to such subdivision, and conversely, in
case the outstanding shares of Common Stock of the Company shall
be combined into a smaller number of shares, the Warrant Price in
effect immediately prior to such combination shall be
proportionately increased.
(i) Reorganization, Reclassification, Consolidation, Merger or
Sale. If any capital reorganization or reclassification of the
capital stock of the Company or any consolidation or merger of the
Company with another corporation, or the sale of all or
substantially all its assets to another corporation shall be
effected in such a way that holders of Common Stock shall be
entitled to receive stock, securities or assets with respect to or
in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale,
lawful and adequate provisions shall be made whereby each holder
of the Warrants shall thereafter have the right to receive upon
the basis and upon the terms and conditions specified herein and
in lieu of the shares of Common Stock of the Company immediately
theretofore receivable upon the exercise of such Warrant or
Warrants, such shares of stock, securities or assets (including
cash) as may be issued or payable with respect to or in exchange
for a number of outstanding shares of Common Stock equal to the
number of shares of such stock immediately theretofore so
receivable had such reorganization, reclassification,
consolidation, merger or sale not taken place, and in any such
case appropriate provision shall be made with respect to the
rights and interests of such holder to the end that the provisions
hereof (including, without limitation, provisions for adjustments
of the Warrant Price) shall thereafter be applicable, as nearly as
may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise of such Warrants
(including an immediate adjustment, by reason of such
consolidation or merger, of the Warrant Price to the value for the
Common Stock reflected by the terms of such consolidation or
merger if the value so reflected is less than the Warrant Price in
effect immediately prior to such consolidation or merger). In the
event of a merger or consolidation of the Company as a result of
which a greater or lesser number of shares of Common Stock of the
surviving corporation are issuable to holders of Common Stock of
the Company outstanding immediately prior to such merger or
consolidation, the Warrant Price in effect immediately prior to
such merger or consolidation shall be adjusted in the same manner
as though there were a subdivision or combination of the
outstanding shares of Common Stock of the Company. The Company
will not effect any such consolidation, merger or sale, unless
prior to the consummation thereof
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the successor corporation (if other than the Company) resulting
from such consolidation or merger or the corporation purchasing
such assets shall assume, by written instrument executed and
mailed or delivered to each Warrantholder at the last address of
such holder appearing on the books of the Company, the obligation
to deliver to such holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such
holder may be entitled to receive upon exercise of such Warrants.
(j) Notice of Adjustment. Upon any adjustment of the Warrant
Price, then and in each such case the Company shall give written
notice thereof, by first class mail, postage prepaid, addressed to
each Warrantholder at the address of such holder as shown on the
books of the Company, which notice shall state the Warrant Price
resulting from such adjustment, setting forth in reasonable detail
the method of calculation and the facts upon which such
calculation is based.
(k) Stock to Be Reserved. The Company will at all times reserve
and keep available out of its authorized Common Stock or its
treasury shares, solely for the purpose of issuance upon the
exercise of this Warrant as herein provided, such number of shares
of Common Stock as shall then be issuable upon the exercise of
this Warrant. The Company covenants that all shares of Common
Stock which shall be so issued shall be duly and validly issued
and fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Company covenants
that it will from time to time take all such action as may be
requisite to assure that the par value per share of the Common
Stock is at all times equal to or less than the effective Warrant
Price. The Company will take all such action as may be necessary
to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any
requirements of any national securities exchange upon which the
Common Stock of the company may be listed. The Company will not
take any action which results in any adjustment of the Warrant
Price if the total number of shares of Common Stock issued and
issuable after such action upon exercise of this Warrant would
exceed the total number of shares of Common Stock then authorized
by the Company's Certificate of Incorporation. The Company has not
granted and will not grant any right of first refusal with respect
to shares issuable upon exercise of this Warrant, and there are no
preemptive rights associated with such shares.
(l) Issue Tax. The issuance of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge
to the
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holder hereof for any issuance tax in respect thereof, provided
that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the
Warrantholder.
(m) Closing of Books. The Company will at no time close its
transfer books against the transfer of the shares of Common Stock
issued or issuable upon the exercise of this Warrant in any manner
which interferes with the timely exercise of this Warrant.
(n) Definition of Common Stock. As used herein the term "Common
Stock" shall mean and include the Class A Common Stock, $.01 par
value, of the Company and the Class B Common Stock, $.01 par
value, of the Company, as authorized on May 25, 1994 and also any
capital stock of any class of the Company hereinafter authorized
which shall not be limited to a fixed sum or percentage in respect
of the rights of the holders thereof to participate in dividends
or in the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the Company; provided,
however, that the shares purchasable pursuant to this Warrant
shall include only shares designated as Class A Common Stock, $.01
par value, of the Company on May 25, 1994, or shares of any class
or classes resulting from any reclassification or
reclassifications thereof and in case at any time there shall be
more than one such resulting class, the shares of each class then
so issuable shall be substantially in the proportion which the
total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.
Section 4. Notices of Record Dates. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other
distribution (other than cash dividends out of earned surplus), or
any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property,
or to receive any right to sell shares of stock of any class or
any other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of
the Company to or consolidation or merger of the Company with or
into any other corporation or entity; or
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(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then and in each such event the Company
will give notice to the holder of this Warrant specifying: (i) the
date on which any such record is to be taken for the purpose of
such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right; and (ii) the
date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution,
liquidation or winding-up is to take place, and the time, if any
is to be fixed, as of which the holders of record of Common Stock
will be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up. Such notice shall
be given at least 20 days and not more than 90 days prior to the
date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the
effectiveness of a registration statement under the Securities Act
of 1933 and applicable state securities laws, or (y) a favorable
vote of stockholders, if either is required.
Section 5. No Stockholder Rights or Liabilities.
(a) Except as set forth in paragraph (b) of this Section 5 and in
the Stockholders Agreement, this Warrant shall not entitle the
holder hereof to any voting rights or other rights as a
stockholder of the Company. No provision hereof, in the absence of
affirmative action by the holder hereof to purchase shares of
Common Stock, and no mere enumeration herein of the rights or
privileges of the holder hereof shall give rise to any liability
of such holder for the Warrant price or as a stockholder of the
Company, whether such liability is asserted by the Company or by
creditors of the Company.
(b) At any time while this Warrant is outstanding, the Company
shall, prior to making any distribution of its property or assets
to the holders of its Common Stock as a dividend in liquidation or
partial liquidation or by way of return of capital or any dividend
payable out of funds legally available for dividends under the
laws of the State of Delaware, give to the holder of this Warrant,
not less than 20 days, prior written notice of any such
distribution. If such holder shall exercise this Warrant on or
prior to the date of such distribution set forth in such notice,
such holder shall be entitled to receive, upon such exercise: (i)
the number of shares of Common Stock receivable pursuant to such
exercise; and (ii) without payment of any additional
consideration, a sum equal to the amount of such property or
assets as would have been payable to the holder hereof as an owner
of the shares described in clause (i) of this
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paragraph (b) had the holder hereof been the holder of record of
such shares on the record date for such distribution; and an
appropriate provision with respect to such payment to such holder
as described in this paragraph (b) shall be made a part of any
such distribution.
Section 6. Lost, Stolen, Mutilated or Destroyed Warrant.. If this Warrant
is lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 7. Notices. All notices, requests and other communications
required or permitted to be given or delivered hereunder shall be in writing,
and shall be delivered, or shall be sent by certified or registered mail,
postage prepaid and addressed, if to the holder to such holder at the address
shown on the records of the Company or at such other address as shall have been
furnished to the Company by notice from such holder. All notices, requests and
other communications required or permitted to be given or delivered hereunder
shall be in writing, and shall be delivered, or shall be sent by certified or
registered mail, postage prepaid and addressed to the Company, at P.O. Box 866,
Rutland, Vermont 05701; Attention: President, or at such other address as shall
have been furnished to the holder by notice from the Company.
Section 8. Law Governing. This Warrant shall be governed by and construed
in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, CASELLA WASTE SYSTEMS, INC., has executed this
Warrant on and as of the 25th day of May, 1994.
CASELLA WASTE SYSTEMS, INC.
By: _________________________________
President
[Corporate Seal]
Attest:
____________________________
Secretary
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SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THE WARRANT
[Date]
To Casella Waste Systems, Inc.:
The undersigned, pursuant to the provisions set forth in the Warrant,
hereby agrees to subscribe for and purchase [specify] shares of Class A Common
Stock covered by such Warrant, and herewith tenders $[specify] in full payment
of the purchase price for such shares.
Name of Holder: _____________________
By: _________________________________
Address: ____________________________
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AMENDED AND RESTATED REVOLVING
CREDIT AND TERM LOAN AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT is
made as of the 6th day of August, 1997 by and among CASELLA WASTE SYSTEMS, INC.,
a Delaware corporation (the "Parent"), its Subsidiaries listed on Schedule 1
hereto (the "Subsidiaries," the Parent and such Subsidiaries herein collectively
referred to as the "Borrowers"), each of which Borrowers (unless otherwise
listed on Schedule 1 hereto) having its principal place of business at 25 Greens
Hill Lane, Rutland, Vermont and BANKBOSTON, N.A., ("BankBoston"), a national
banking association having its principal place of business at 100 Federal
Street, Boston, Massachusetts 02110, KEYBANK NATIONAL ASSOCIATION, USTRUST, BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, BHF-BANK AKTIENGESELLSCHAFT,
COMERICA BANK and such banks or other financial institutions which may become a
party hereto pursuant to ss.19 hereof (the "Banks") and BANKBOSTON as Agent for
the Banks (the "Agent").
WHEREAS, the Borrowers, BankBoston, USTrust, KeyBank and the Agent were
parties to that certain Revolving Credit and Term Loan Agreement dated as of
January 25, 1995, as amended to date (as so amended, the "Original Credit
Agreement"), pursuant to which such Banks agreed to make Loans to the Borrowers
as set forth therein;
WHEREAS, the Borrowers, BankBoston, USTrust, KeyBank and the Agent
amended and restated the Original Credit Agreement in its entirety as set forth
in that certain Amended and Restated Revolving Credit and Term Loan Agreement
dated as of June 17, 1997 (the "Prior Credit Agreement"), pursuant to which such
Banks agreed to make Loans to Borrowers as set forth therein;
WHEREAS, the Borrowers have requested, and the Banks and the Agent have
agreed to amend and restate the Prior Credit Agreement in its entirety as set
forth herein;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ss.1. DEFINITIONS AND RULES OF INTERPRETATION.
ss.1.1. Definitions. The following terms shall have the meanings set
forth in this ss.1 or elsewhere in the provisions of this Agreement referred to
below:
Accountants. See ss.6.4(a).
Agreement. This Amended and Restated Revolving Credit and Term Loan
Agreement, including the Schedules and Exhibits hereto.
2
Agent. BankBoston acting as agent for the Banks.
Agent's Head Office. The Agent's head office is located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.
Applicable Laws. See ss.7.10.
Applicable Rate. The applicable rate per annum of interest on the Loans
set forth in the following table:
@@
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(1) (1)
Applicable
Applicable Applicable Rate Applicable Applicable Applicable Rate for
Rate for for Revolving Rate for Rate for Rate for portion of
Revolving Credit Loans portion of portion of portion of Series B Term
Credit Loans which are Series A Term Series A Term Series B Term Loan which is
Pricing Ratio which are Eurodollar Rate Loan which is Loan which is Loan which is Eurodollar
Base Rate Loans Base Rate Loan Eurodollar Base Rate Loan Rate Loan
Loans Rate Loan
=============== =============== ================= ================ ================ =============== ================
less than Base Rate Eurodollar Rate Base Rate Eurodollar Base Rate Eurodollar
2.00:1 plus 1.75% per Rate plus plus 0.50% Rate plus
annum 1.75% per annum per annum 3.00% per annum
=============== =============== ================= ================ ================ =============== ================
greater than Base Rate Eurodollar Rate Base Rate Eurodollar Base Rate Eurodollar
or equal to plus 2.00% per Rate plus plus 0.50% Rate plus
2.00:1 and annum 2.00% per annum per annum 3.00% per annum
less than
2.50:1
=============== =============== ================= ================ ================ =============== ================
greater than Base Rate Eurodollar Rate Base Rate Eurodollar Base Rate Eurodollar
or equal to plus 2.25% per Rate plus plus 0.50% Rate plus
2.50:1 and annum 2.25% per annum per annum 3.00% per annum
less than
3.00:1
=============== =============== ================= ================ ================ =============== ================
greater than Base Rate Eurodollar Rate Base Rate Eurodollar Base Rate Eurodollar
or equal to plus 2.50% per Rate plus plus 0.50% Rate plus
3.00:1 and annum 2.50% per annum per annum 3.00% per annum
less than
3.50:1
=============== =============== ================= ================ ================ =============== ================
greater than Base Rate Eurodollar Rate Base Rate plus Eurodollar Base Rate Eurodollar
or equal to plus 0.25% plus 2.75% per 0.25% per annum Rate plus plus 0.50% Rate plus
3.50:1 per annum annum 2.75% per annum per annum 3.00% per annum
=============== =============== ================= ================ ================ =============== ================
@@
(1) Provided, however if EBITDA as of the end of any fiscal quarter for the
period of the four (4) fiscal quarters then ended is greater than
$30,000,000 or if the Parent raises $30,000,000 of net proceeds from an
equity offering (after redemption of all the Parent's stock (common and
preferred) in connection with the equity offering) after the Closing
Date, the Applicable Rate for Revolving Credit Loans which are
Eurodollar Rate Loans and for portions of Series A Term Loans which are
Eurodollar Rate Loans shall be reduced for such quarter and all future
quarters by 0.25% per annum. If the Parent raises $40,000,000 of net
proceeds from an equity offering (after redemption of all the Parent's
stock (common and preferred) in connection with the equity offering)
after the Closing Date, the Applicable Rate for Revolving Credit Loans
which are Eurodollar Rate Loans and for portions of Series A Term Loans
which are Eurodollar Rate Loans shall be reduced for such quarter and
all future quarters by 0.35% per annum.
Each Applicable Rate shall become effective on the first day after
receipt by the Banks of financial statements delivered pursuant to ss.ss.7.4(a)
or (b) hereof which indicate a change in the Pricing Ratio and in the Applicable
Rate in accordance with the above table.
3
If at any time the financial statements required to be delivered pursuant to
ss.7.4(a) or (b) hereof are not delivered within 10 days after the time periods
specified in such subsections, the Applicable Rate shall be the rate set forth
in the table for a Pricing Ratio greater than or equal to 3.50:1, subject to
adjustment upon actual receipt of such financial statements.
Balance Sheet Date. April 30, 1997.
BankBoston. BankBoston, N.A., f/k/a The First National Bank of Boston.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by the Agent at its head office in Boston, Massachusetts, as its
"base rate" (it being understood that such rate is a reference rate and not
necessarily the lowest rate of interest charged by the Bank) or (b) one percent
(1%) above the overnight federal funds effective rate, as published by the Board
of Governors of the Federal Reserve System, as in effect from time to time.
Base Rate Loans. Revolving Credit Loans and all or any portion of the
Term Loan bearing interest calculated by reference to the Base Rate.
Borrowers. See Preamble.
Business Day. Any day on which banking institutions in Boston,
Massachusetts are open for the transaction of banking business, and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with GAAP.
Capital Expenditures. Amounts paid or indebtedness incurred by any
Person in connection with the purchase and lease by such Person of Capital
Assets that would be required to be capitalized and shown on the balance sheet
of such Person in accordance with GAAP.
Casella Associates Leases. The leases between the Borrowers and Casella
Associates, a Vermont partnership, for the property in Rutland, Vermont and
Montpelier, Vermont.
Casella TIRES Real Estate. The Real Property in Elliot, Maine owned by
Casella T.I.R.E.S., Inc.
Certified. With respect to the financial statements of any Person, such
statements as audited by a firm of independent auditors, whose report expresses
the opinion, without qualification, that such financial statements present
fairly the financial position of such Person.
CFO. See ss.7.4(b).
4
Clinton Lease. The Operation, Management and Lease Agreement dated as
of July 10, 1996 between the Parent and Clinton County, New York for the lease
of the Clinton County Landfill and related assets.
Closing Date. The date on which the conditions precedent set forth in
ss.9 are satisfied.
Code. The Internal Revenue Code of 1986, as amended and in effect from
time to time.
Collateral. All of the property, rights and interests of the Borrowers
that are or are intended to be subject to the security interests and mortgages
created by the Security Documents.
Collateral Assignment of Contracts and Permits. The Amended and
Restated Collateral Assignment of Contracts and Permits dated as of the Closing
Date among the Borrowers and the Agent, in form and substance satisfactory to
the Agent.
Commitment. With respect to each Bank, the amount determined by
multiplying such Bank's Commitment Percentage by the aggregate amount of the
Banks' Total Commitment to make Revolving Credit Loans to the Borrowers, as the
same may be reduced from time to time.
Commitment Fee Percentage. The applicable percentage per annum as set
forth below used in calculating the commitment fee payable pursuant to
ss.5.2(a), which percentage shall vary from time to time in accordance with the
Pricing Ratio:
@@
============================================= ==================================
Pricing Ratio Commitment Fee Percentage
============================================= ==================================
less than 2.00:1 1/4%
============================================= ==================================
greater than or equal to 2.00:1 and less 3/8%
than 2.50:1
============================================= ==================================
greater than or equal to 2.50:1 and less 3/8%
than 3.00:1
============================================= ==================================
greater than or equal to 3.00:1 and less 1/2%
than 3.50:1
============================================= ==================================
greater than or equal to 3.50:1 1/2%
============================================= ==================================
@@
The Commitment Fee Percentage shall become effective on the first day
after receipt by the Banks of financial statements delivered pursuant to
ss.7.4(a) or ss.7.4(b) which indicate a change in the Pricing Ratio and in the
Commitment Fee Percentage in accordance with the above table.
5
If at any time the financial statements required to be delivered
pursuant to ss.7.4(a) or (b) hereof are not delivered with 10 days after the
time periods specified in such subsections, the Applicable Rate shall be the
rate set forth in the table for a Pricing Ratio greater than or equal to 3.50:1,
subject to adjustment upon actual receipt of such financial statements.
Commitment Percentage. With respect to each Bank, the percentage set
forth beside its name on Schedule 2 hereto as the amount of such Bank's
percentage of the aggregate Commitments of all of the Banks (subject to
adjustment upon any assignment pursuant to ss.19):
Compliance Certificate. See ss.7.4(c).
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrowers
consolidated in accordance with GAAP.
Consolidated Current Assets. All assets of the Borrowers on a
consolidated basis that, in accordance with GAAP, are properly classified as
current assets, provided that notes and accounts receivable shall be included
only if good and collectible as determined by the Borrowers in accordance with
established practice consistently applied and, with respect to such notes, only
if payable on demand or within one (1) year from the date as of which
Consolidated Current Assets are to be determined and if not directly or
indirectly renewable or extendable at the option of the debtors, by their terms,
or by the terms of any instrument or agreement relating thereto, beyond such
year, and, with respect to such accounts receivable, only if payable and
outstanding not more than one hundred twenty (120) days after the date of the
shipment of goods or provision of services or other transaction out of which any
such account receivable arose; and such notes and accounts receivable shall be
taken at their face value less reserves determined to be sufficient in
accordance with GAAP.
Consolidated Current Liabilities. All liabilities of the Borrowers on a
consolidated basis maturing on demand or within one (1) year from the date as of
which Consolidated Current Liabilities are to be determined (but excluding the
current portion or current maturities of long term debt and the lease
obligations under the Waste USA Lease) and such other liabilities as may
properly be classified as current liabilities in accordance with GAAP.
Consolidated Earnings Before Interest and Taxes or EBIT. For any
period, the Consolidated Net Income (or Deficit) of the Borrowers determined in
accordance with GAAP, plus (a) interest expense, and (b) income tax expense.
Consolidated Earnings Before Interest Taxes Depreciation and
Amortization or EBITDA. For any period, the Consolidated Net Income (or Deficit)
of the Borrowers determined in accordance with GAAP, plus (a) interest expense,
(b) income taxes (c) amortization expense and (d) depreciation expense for such
period.
Consolidated Fixed Charges. For any period, the sum of (a) Consolidated
Total Interest Expense plus (b) scheduled payments on operating leases and
capitalized leases of the Borrowers during such period (to the extent not
already included in the calculation of Consolidated Total
6
Interest Expense or in the scheduled principal payments described in clause (b)
of this definition but excluding lease payments made under the Waste USA Lease),
plus (c) scheduled principal payments that are due and payable during such
period with respect to Indebtedness of the Borrowers for borrowed money which
(i) is not payable on demand or (ii) matures more than one (1) year from the
date such Indebtedness was incurred, plus (d) dividends and other Distributions
paid or required to be paid to holders of the preferred stock of any of the
Borrowers during such period, all as determined in accordance with GAAP.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrowers after deduction of all expenses, taxes and proper
charges and before deduction of [(a) the special pre-tax, one-time charges in
the amount of $650,000 incurred in the fiscal quarter ended April 30, 1997 in
connection with the settlement of the Meridian Litigation and (b)] the $100,000
charge incurred in the fiscal quarter ended April 30, 1997 in connection with
the establishment of a reserve for the Casella T.I.R.E.S., Inc. stockpile in
Hampden, Maine.
Consolidated Net Worth. The excess of Consolidated Total Assets over
Consolidated Total Liabilities.
Consolidated Senior Liabilities. The sum of Consolidated Total
Liabilities minus the outstanding principal amount of Subordinated Debt (in each
case, excluding lease obligations under the Waste USA Lease to the extent
included in the calculation of Consolidated Total Liabilities or the outstanding
principal amount of Subordinated Debt).
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest expense required to be paid or accrued by the Borrowers
during such period on all Indebtedness of the Borrowers outstanding during all
or any part of such period, including capitalized interest expense for such
period, but excluding therefrom (a) the non-cash amortization of debt issuance
costs and (b) non-cash charges related to the amortization of the Parent's
Series C Redeemable Preferred Stock.
Consolidated Total Assets. All assets of the Borrowers determined on a
consolidated basis in accordance with GAAP.
Consolidated Total Liabilities. All liabilities of the Borrowers
determined on a consolidated basis in accordance with GAAP.
Consulting Engineer. An environmental consulting firm acceptable to the
Banks.
Conversion Request. A notice given by the Borrowers to the Agent of the
Borrowers' election to convert or continue a Loan in accordance with ss.5.12.
Default. See ss.13.
Depository Accounts. See ss.6.23.
7
Disposal. See "Release".
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of any Person, other than
dividends payable solely in shares of common stock of such Person; the purchase,
redemption, or other retirement of any shares of any class of capital stock of
such Person, directly or indirectly through a Subsidiary or otherwise; the
return of capital by any Person to its shareholders as such; or any other
distribution on or in respect of any shares of any class of capital stock of
such Person.
Dollars or $. Dollars in lawful currency of the United States of
America.
EBIT. See definition of Consolidated Earnings Before Interest and
Taxes.
EBITDA. See definition of Consolidated Earnings Before Interest, Taxes,
Depreciation and Amortization.
Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by any Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. See ss.6.16(a).
ERISA. The Employee Retirement Income Security Act of 1974, as amended
and in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with
any Borrower under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any Bank subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other Dollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
8
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (i) the arithmetic rate per annum
(rounded upwards to the nearest 1/16 of one percent) at which Dollar deposits
are offered to the Agent by prime banks in whatever Eurodollar market may be
selected by the Agent in its sole discretion, acting in good faith at or about
10:00 a.m. local time in such interbank market two Eurodollar Business Days
prior to the beginning of such Interest Period, for delivery on the first day of
such Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan to which such Interest
Period applies, divided by (ii) a number equal to 1.00 minus the Eurocurrency
Reserve Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans and all or any portion of
the Term Loan bearing interest calculated by reference to the Eurodollar Rate.
Event of Default. See ss.13.
Generally Accepted Accounting Principles or GAAP. When used in general,
Generally Accepted Accounting Principles means (1) principles that are
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, in effect for the fiscal year
ended on the Balance Sheet Date, as shall be concurred in by independent
certified public accountants of recognized standing whose report expresses an
unqualified opinion (other than a qualification regarding changes in Generally
Accepted Accounting Principles) as to financial statements in which such
principles have been applied; and (2) when used with reference to the Borrowers,
such principles shall include (to the extent consistent with such principles)
the accounting practices reflected in the consolidated financial statements for
the year ended on the Balance Sheet Date.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by any Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Hazardous Substances. See ss.6.16(b).
Indebtedness. All obligations, contingent and otherwise, that in
accordance with GAAP should be classified upon the obligor's balance sheet as
liabilities, or to which reference should be made by footnotes thereto,
including in any event and whether or not so classified: (a) all debt and
similar monetary obligations (including capitalized leases and operating leases
with a term longer than 3 years), whether direct or indirect; (b) all
liabilities secured by any mortgage, pledge, security interest, lien, charge, or
other encumbrance existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; and (c)
all guarantees, endorsements and other contingent obligations in respect of
indebtedness of others, whether direct or indirect, including any obligation to
supply funds to or in any manner to invest in, directly or indirectly, the
debtor, to purchase indebtedness, or to assure the owner of indebtedness against
loss, through an agreement to purchase goods, supplies, or services for the
9
purpose of enabling the debtor to make payment of the indebtedness held by such
owner or otherwise, and the obligations to reimburse the issuer in respect of
any letters of credit.
Interest Period. With respect to each Eurodollar Loan:
(a) initially, the period commencing on the date of a
conversion from a Base Rate Loan into a Eurodollar Loan or the making
of a Eurodollar Loan, and ending one (1), two (2), three (3) months or
six (6) thereafter, as the case may be, as the Borrowers may select
pursuant to the provisions of this Agreement; and
(b) thereafter, each subsequent Interest Period shall begin on
the last day of the preceding Interest Period, and end one (1), two
(2), (3) months or six (6) thereafter, as the case may be, as the
Borrowers may select pursuant to the provisions of this Agreement;
provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(A) if any Interest Period would otherwise end on a
day that is not a Eurodollar Business Day, that Interest Period shall
be extended to the next succeeding Eurodollar Business Day unless the
result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end
on the immediately preceding Eurodollar Business Day;
(B) if the Borrowers shall fail to give notice as
provided in ss.5.12, the Borrowers shall be deemed to have requested a
conversion of the affected Eurodollar Rate Loan to a Base Rate Loan and
the continuance of all Base Rate Loans as Base Rate Loans on the last
day of the then current Interest Period with respect thereto;
(C) any Interest Period relating to any Eurodollar
Rate Loan that begins on the last Eurodollar Business Day of a calendar
month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on
the last Eurodollar Business Day of a calendar month; and
(D) no Interest Period shall extend beyond the
Revolving Credit Maturity Date (if related to a Revolving Credit Loan)
or the Series A Term Loan Maturity Date (if related to Term Loan (I) or
a portion thereof) or the Series B Term Loan Maturity Date (if related
to Term Loan (II) or a portion thereof).
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued
10
with respect to Indebtedness constituting an Investment unless and until such
interest is paid; (c) there shall be deducted in respect of each such Investment
any amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (d)
there shall not be deducted in respect of any Investment any amounts received as
earnings on such Investment, whether as dividends, interest or otherwise, except
that accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
KeyBank. KeyBank National Association, f/k/a Key Bank of Vermont.
Letters of Credit. Standby Letters of Credit issued or to be issued by
the Agent under ss.3 hereof for the account of the Borrowers.
Letter of Credit Applications. Letter of Credit Applications in such
form as may be agreed upon by any Borrower and the Agent from time to time which
are entered into pursuant to ss.3 hereof as such Letter of Credit Applications
are amended, varied or supplemented from time to time.
Letter of Credit Fee. See ss.5.2(b).
Letter of Credit Participation. See ss.3.1(b).
Loan Documents. This Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, the Security Documents, the Stockholders
Stand-off Agreement and the Subordination Agreements.
Loan and Letter of Credit Request. See ss.2.6.
Loans. The Revolving Credit Loans and the Term Loan.
Maximum Drawing Amount. The maximum aggregate amount from time to time
that the beneficiaries may draw under outstanding Letters of Credit.
Meridian Litigation. The civil action brought by John A. Russell, Jr.
and Paul P. Tierney derivatively on behalf of Meridian Group, Inc. against the
Parent and certain other parties in Rutland (Vermont) Superior Court.
Mortgages. The mortgages and deeds of trust, as amended and in effect
from time to time, from the Borrowers to the Agent with respect to the fee and
leasehold interests of the Borrowers in the Sanco Landfill, the Sawyer Real
Estate, the Casella TIRES Real Estate, the Superior Real Estate, and the Waste
USA Landfill, each in form and substance satisfactory to the Agent, and any
other mortgages or deeds of trust requested by the Agent pursuant to ss.7.19.
11
Multiemployer Plan. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by any Borrower or any ERISA
Affiliate.
Notes. Collectively, the Revolving Credit Notes and the Term Notes.
Obligations. All indebtedness, obligations and liabilities of the
Borrowers to any of the Banks and the Agent, individually or collectively,
existing on the date of this Agreement or arising thereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise, arising or incurred under this Agreement or any of the
other Loan Documents or in respect of any of the Loans made or Reimbursement
Obligations incurred or the Letters of Credit, the Notes, interest rate
protection arrangements provided by any of the Banks or any other instrument at
any time evidencing any thereof.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
Permit Note. The promissory note of New England Waste Services of
Vermont, Inc. dated January 25, 1995 and payable to the order of Waste USA in
the principal amount of $200,000.
Permitted Liens. See ss.8.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Pricing Ratio. At the end of any fiscal quarter of the Borrowers, the
ratio of Indebtedness of the Borrowers for borrowed money and capitalized leases
(excluding the first $1,600,000 of Indebtedness under or in respect of the
Casella Associates Leases and Indebtedness with respect to the Waste USA Lease)
to (b) EBITDA (minus interest, depreciation and amortization expense related to
the Casella Associates Leases and the Waste USA Lease) for the period of four
(4) consecutive fiscal quarters then ended, as calculated on the Compliance
Certificate delivered by the Borrowers pursuant to ss.7.4(c).
Prior Credit Agreement. See Recitals.
Real Property. All real property heretofore, now, or hereafter owned or
leased by the Borrowers.
Reimbursement Obligation. The Borrowers' obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in ss.3.2.
12
Release. Shall have the meaning specified in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
ss.ss.9601 et seq. ("CERCLA") and the term "Disposal" (or "Disposed") shall have
the meaning specified in the Resource Conservation and Recovery Act of 1976, 42
U.S.C. ss.ss.6901 et seq. ("RCRA") and regulations promulgated thereunder;
provided, that in the event either CERCLA or RCRA is amended so as to broaden
the meaning of any term defined thereby, such broader meaning shall apply as of
the effective date of such amendment and provided further, to the extent that
the laws of a state wherein the property lies establishes a meaning for
"Release" or "Disposal" which is broader than specified in either CERCLA or
RCRA, such broader meaning shall apply.
Required Banks. As of any date, the Banks holding sixty-six and two
thirds percent (66 2/3%) of the outstanding principal amount of the Loans on
such date; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitute sixty-six and two thirds percent (66 2/3%) of the Total
Commitment.
Revolving Credit Loans. Revolving credit loans made or to be made by
the Banks to the Borrowers pursuant to ss.2.
Revolving Credit Maturity Date. July 31, 2002.
Revolving Credit Notes. See ss.2.3.
Sanco Landfill. The Landfill in Bethlehem, New Hampshire, owned and
operated by North Country Environmental Services, Inc.
Sawyer Real Estate. The Real Property in Hampden, Maine owned by Sawyer
Environmental Services and Sawyer Environmental Recovery Facilities, Inc.
Security and Pledge Agreement. The Amended and Restated Security and
Pledge Agreement, dated the Closing Date, among the Borrowers and the Agent in
form and substance satisfactory to the Agent.
Security Documents. The Security and Pledge Agreement, the Collateral
Assignment of Contracts and Permits, and the Mortgages, each as amended and in
effect from time to time, and any additional documents evidencing or perfecting
the Agent's lien on the assets of the Borrowers for the benefit of the Banks,
including Uniform Commercial Code financing statements.
Series A Term Loan. The loan made or deemed made by the Banks pursuant
to ss.4A.1 hereof.
Series A Term Loan Maturity Date. July 31, 2002.
Series A Term Loan Percentage. With respect to the Banks listed below,
the percentage set forth beside is name below (subject to adjustment upon any
assignment pursuant to ss.19):
13
BankBoston 24.2105%
KeyBank 21.0526%
USTrust 13.6842%
Bank of America 15.7895%
Comerica Bank 12.6316%
BHF-Bank Aktiengsellschaft 12.6316%
Series A Term Note. See ss.4A.2.
Series B Term Loan. The loan made or deemed made by the Banks pursuant
to ss.4B.1 hereof.
Series B Term Loan Bank(s). BankBoston, KeyBank and USTrust.
Series B Term Loan Percentage. With respect to the Series B Term Loan
Banks listed below, the percentage set forth beside its name below (subject to
adjustment upon any assignment pursuant to ss.19):
BankBoston 46.6667%
KeyBank 33.3333%
USTrust 20.0000%
Series B Term Loan Maturity Date. July 31, 2004.
Series B Term Note. See ss.4B.2.
Settlement. The making of, or receiving of, payments in immediately
available funds, by the Banks to or from the Agent in accordance with ss.2.7 to
the extent necessary to cause each Bank's actual share of the outstanding amount
of the Loans to be equal to each Bank's Commitment Percentage of the outstanding
amount of such Loans, in any case where, prior to such event or action, the
actual share is not so equal.
Settlement Amount. See ss.2.7(b).
Settlement Date. (a) The Drawdown Date relating to any Loan and Letter
of Credit Request, (b) the last Business Day of each week, (c) the Business Day
immediately following the Agent becoming aware of the existence of an Event of
Default, (d) any Business Day on which the amount of Revolving Credit Loans
outstanding from BankBoston is equal to or greater than BankBoston's Commitment,
or (e) the Business Day immediately following any Business Day on which the
amount of Revolving Credit Loans outstanding increases or decreases by more than
$1,000,000 as compared to the previous Settlement Date.
Settling Bank. See ss.2.7(b).
14
Stockholders Stand-off Agreement. The Stand-off Agreement, dated as of
December 22, 1995, among the Agent, the Parent and the holders of the Parent's
Series A Redeemable Preferred Stock, Series B Redeemable Preferred Stock, Series
C Redeemable Preferred Stock and Series D Convertible Preferred Stock, in form
and substance satisfactory to the Agent and the Banks.
Subordinated Debt. Indebtedness of the Borrowers which has been
subordinated and made junior to the payment and performance in full of the
Obligations, and evidenced as such by the Subordination Agreements or by another
written instrument containing subordination provisions in form and substance
satisfactory to the Banks, including without limitation, the Permit Note and the
obligations to Waste USA under the Waste USA Lease; provided that (a) at the
time such Subordinated Debt is incurred, no Default or Event of Default has
occurred or would occur as a result of such incurrence, (b) the aggregate
Subordinated Debt incurred after the date hereof does not exceed $15,000,000;
and (c) the documentation evidencing such Subordinated Debt shall have been
delivered to the Agent and shall contain all of the following characteristics:
(i) it shall be unsecured, (ii) it shall bear a market rate of interest, (iii)
it shall have a final maturity of at least five (5) years, (iv) it shall not
require unscheduled principal repayments thereof prior to the maturity date, (v)
it shall have financial covenants (including covenants relating to incurrence of
indebtedness) which are meaningfully less restrictive than those set forth
herein, (vi) it shall have no restrictions on the Borrower's ability to grant
liens securing indebtedness ranking senior to such Subordinated Debt, (vii) it
shall permit the incurrence of senior indebtedness under this Credit Agreement,
(viii) it may be cross-accelerated with the Obligations and other senior
indebtedness of the Borrowers (but shall not be cross-defaulted except for
payment defaults which the senior lenders have not waived) and may be
accelerated upon bankruptcy, (ix) it shall provide that (A) upon any payment or
distribution of the assets of the Borrowers (including after the commencement of
a bankruptcy proceeding) of any kind or character, all of the Obligations
(including interest accruing after the commencement of any bankruptcy proceeding
at the rate specified for the applicable Obligation, whether or not such
interest is an allowable claim in any such proceeding) shall be paid in full
prior to any payment being received by the holders of the Subordinated Debt and
(B) until all of the Obligations (including the interest described in subclause
(A) above) are paid in full in cash, any payment or distribution to which the
holders of the Subordinated Debt would be entitled but for the subordination
provisions of the type described in clauses (x) and (xi) hereof shall be made to
the holders of the Obligations, (x) it shall provide that in the event of a
payment default under ss.13.1(a) or (b) hereof, the Borrowers shall not be
required to pay the principal of, or any interest, fees and all other amounts
payable with respect to the Subordinated Debt until the Obligations have been
paid in full in cash, (xi) it shall provide that in the event of any other Event
of Default, the Banks shall be permitted to block payments of principal,
interest, fees and all other amounts payable with respect to the Subordinated
Debt for a period of 180 days, and (xii) it shall acknowledge that none of the
provisions outlined in part (c) of this definition can be amended, modified or
otherwise altered without the prior written consent of the Banks.
Subordination Agreements. Collectively, (a) the Waste USA Subordination
Agreement, (b) the Subordination Agreement dated as of August 1, 1995 among the
Agent, the Parent and Green Mountain Sanitation, Inc., Hardwick Recycling and
Salvage, Inc., Morrisville Maintenance, Inc. and Northern Transfer, Inc.
subordinating the $500,000 promissory note of the
15
Parent referenced therein, (c) any Subordination Agreement among the Agent,
Casella Waste Management, Inc. and Northeast Waste Services, Ltd. subordinating
certain obligations of Casella Waste Management, Inc. to Northeast Waste
Services, Ltd. referenced therein, (d) any Subordination Agreement among the
Agent, the Parent, and the sellers of the capital stock of Sawyer Environmental
Recovery Facilities, Inc. and Sawyer Environmental Services (such sellers,
collectively, the "Sawyer Sellers"), subordinating certain obligations of the
Parent to the Sawyer Sellers referenced therein and (e) any other subordination
agreements entered into by the Agent, the Borrowers and any sellers of assets to
any Borrower, subordinating the obligations of such Borrower to such seller to
the Obligations in substantially the form of Exhibit __ hereto.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority of the
outstanding capital stock or other interest entitled to vote generally.
Superior Real Estate. The Real Property in Newfield, New York owned by
Casella 15 Waste Management of N.Y., Inc.
Term Loan. Collectively, Series A Term Loan and Series B Term Loan.
Term Notes. Collectively, the Series A Term Notes and the Series B Term
Notes.
Total Commitment. $85,000,000, or such lesser amount as may result from
reductions pursuant to ss.2.2.
Total Leverage Ratio. See ss.9.2.
Type. As to any Revolving Credit Loan or all or portion of the Term
Loan, its nature as a Base Rate Loan or a Eurodollar Rate Loan.
Waste USA. Waste U.S.A., Inc., a Vermont corporation.
Waste USA Landfill. The Landfill in Coventry, Vermont acquired from
Waste USA by New England Waste Services of Vermont, Inc.
Waste USA Lease. The lease of the airspace at the Waste USA Landfill
between the lessor thereunder and New England Waste Services of Vermont, Inc.
Waste USA Purchase Agreement. The Asset Purchase, Stock Purchase and
Lease Agreement dated as of May 6, 1994 among Waste USA, 161531 Canada Ltd. and
New England Waste Services, Inc., which agreement has been assigned by New
England Waste Services, Inc. to New England Waste Services of Vermont, Inc.
Waste USA Subordination Agreement. The Subordination Agreement dated as
of January 25, 1995, among the Agent and Waste USA.
16
ss.1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms capitalized but not otherwise defined
herein have the meanings assigned to them by Generally Accepted Accounting
Principles applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by Generally
Accepted Accounting Principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein.
(h) Reference to a particular "ss." refers to that section of
this Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
ss.2. THE REVOLVING CREDIT LOANS.
ss.2.1. Commitment to Lend. Subject to the terms and conditions set
forth in this Agreement, each of the Banks severally agrees to lend to the
Borrowers and the Borrowers may borrow, repay, and reborrow from time to time
between the Closing Date and the Revolving Credit Maturity Date upon notice by
the Borrowers to the Agent given in accordance with ss.2.6, such Bank's
Commitment Percentage of such sums as are requested by the Borrowers in the
minimum aggregate amount of $250,000 or an integral multiple thereof; provided,
that except as otherwise provided herein, the outstanding amount of Revolving
Credit Loans and the Maximum Drawing Amount of the Letters of Credit shall not
exceed the Total Commitment at any time. Revolving Credit Loans made hereunder
shall be made pro rata in accordance with each Bank's Commitment Percentage.
Each request for a Revolving Credit Loan hereunder shall constitute a
representation and warranty by the Borrowers that the conditions set forth in
ss.10 and ss.11, as the
17
case may be, have been satisfied on the date of such request. Any unpaid
Reimbursement Obligation under the Letters of Credit shall for all purposes be a
Revolving Credit Loan hereunder.
ss.2.2. Reduction of Total Commitment. (a) The Borrowers shall have the
right at any time and from time to time upon two (2) Business Days' prior
written notice to the Agent to reduce by $1,000,000 or an integral multiple
thereof or terminate entirely the Total Commitment, whereupon the Commitments of
the Banks shall be reduced pro rata in accordance with their respective
Commitment Percentages of the amount specified in such notice or, as the case
may be, terminated. The Agent will notify the Banks promptly after receiving any
notice of the Borrowers delivered pursuant to this ss.2.2.
(b) No reduction or termination of the Total Commitment once
made may be revoked; the portion of the Total Commitment reduced or terminated
may not be reinstated; and amounts in respect of such reduced or terminated
portion may not be reborrowed.
ss.2.3. The Revolving Credit Notes. The Revolving Credit Loans shall be
evidenced by promissory notes of the Borrowers in substantially the form of
Exhibit A hereto (each a "Revolving Credit Note"), dated as of the Closing Date
and completed with appropriate insertions. One Revolving Credit Note shall be
payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrowers irrevocably authorize each Bank to make or cause to be made, in
connection with a drawdown date of any Revolving Credit Loan or at the time of
receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's records reflecting the making of such
Revolving Credit Loan or the receipt of such payment (as the case may be). The
outstanding amount of the Revolving Credit Loans set forth on such Bank's record
shall be prima facie evidence of the principal amount thereof owing and unpaid
to such Bank, but the failure to record, or any error in so recording, any such
amount shall not limit or otherwise affect the obligations of the Borrowers
hereunder or under any Revolving Credit Note to make payments of principal of or
interest on any Revolving Credit Note when due.
ss.2.4. Maturity of the Revolving Credit Loans. The Revolving Credit
Loans shall be due and payable on the Revolving Credit Maturity Date. The
Borrowers promise to pay on the Revolving Credit Maturity Date all Revolving
Credit Loans outstanding on such date, together with any and all accrued and
unpaid interest thereon. The Banks shall effect a Settlement on the Revolving
Credit Maturity Date.
ss.2.5. Mandatory Repayments of the Revolving Credit Loans. If at any
time the outstanding amount of the Revolving Credit Loans plus the Maximum
Drawing Amount of all outstanding Letters of Credit exceeds the Total
Commitment, whether by reduction of the Total Commitment or otherwise, then the
Borrowers shall immediately pay the amount of such excess to the Agent for
application to the Revolving Credit Loans, subject to Settlement among the Banks
in accordance with ss.2.7(b) hereof, or if no Revolving Credit Loans shall be
outstanding, to be held by the Agent as collateral security for the
Reimbursement Obligations provided,
18
however, that if the amount of cash collateral held by the Agent pursuant to
this ss.2.5 exceeds the amount of the Obligations, the Agent shall return such
excess to the Borrowers.
ss.2.6. Requests for Revolving Credit Loans. (a) The Borrowers shall
give to the Agent written notice in the form of Exhibit D hereto (or telephonic
notice confirmed by telecopy on the same Business Day in the form of Exhibit D
hereto) of each Revolving Credit Loan requested hereunder (a "Loan and Letter of
Credit Request") not later than 11:00 a.m. Boston time (i) no less than one (1)
Business Day prior to the proposed drawdown date (the "Drawdown Date") of any
Base Rate Loan and (ii) no less than three (3) Eurodollar Business Days prior to
the proposed Drawdown Date of any Eurodollar Rate Loan. Each such notice shall
specify (A) the amount of such Revolving Credit Loan, (B) the proposed Drawdown
Date of such Revolving Credit Loan, (C) the Type of such Revolving Credit Loan,
and (D) the Interest Period for such Revolving Credit Loan (if a Eurodollar Rate
Loan).
(b) Notwithstanding the notice and minimum amount requirements
set forth in ss.2.6(a), but otherwise in accordance with the terms and
conditions of this Credit Agreement, the Agent may, in its sole discretion and
without conferring with the Banks, make Revolving Credit Loans which are Base
Rate Loans to the Borrowers by entry of credits to the Borrowers' operating
account(s) with the Agent or such other account designated by the Parent and
agreed to by the Agent to cover checks which the Borrowers have drawn or made
against such account. The Borrowers hereby request and authorize the Agent to
make from time to time such Revolving Credit Loans by means of appropriate
entries of such credits sufficient to cover checks then presented. The Borrowers
acknowledge and agree that the making of such Revolving Credit Loans shall, in
each case, be subject in all respects to the provisions of this Credit Agreement
as if they were Revolving Credit Loans covered by a Loan and Letter of Credit
Request including, without limitation, the limitations set forth in ss.2.1 and
the requirements that the applicable provisions of ss.10 (in the case of
Revolving Credit Loans made on the Closing Date) and ss.11 be satisfied. All
actions taken by the Agent pursuant to the provisions of this ss.2.6(b) shall be
conclusive and binding on the Borrowers absent manifest error or the Agent's
gross negligence or willful misconduct. Prior to a Settlement, interest on
Revolving Credit Loans made pursuant to this ss.2.6(b) shall be for the account
of the Agent.
ss.2.7. Funds for Loans; Settlements.
(a) Upon receipt of the documents required by ss.ss.10 and 11
and the satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will deposit into the account of the Parent at the Agent's
Head Office the amount of such Revolving Credit Loans requested by the Borrowers
pursuant to ss.2.6 hereunder in immediately available funds not later than 2:00
p.m. (Boston time) on the proposed Drawdown Date.
(b) The Banks shall effect Settlements on each Settlement
Date. On or before 12:00 p.m. (Boston time) on each such Settlement Date, the
Agent shall give telephonic notice to the Banks of (i) (A) the respective
outstanding amount of Revolving Credit Loans made by each Bank from the
immediately preceding Settlement Date through the close of business on the prior
day and (B) the unfunded amount, if any, of each Revolving Credit Loan requested
pursuant to
19
ss.2.7(a) as of such time on such date, (ii) the amount that any Bank, as
applicable (the "Settling Bank"), shall pay to effect a Settlement (the
"Settlement Amount") and (iii) the portion (if any) of the aggregate Settlement
Amount to be paid to each Bank. A statement of the Agent submitted to the Banks
with respect to any amounts owing under this ss.2.7(b) shall be prima facie
evidence of the amount due and owing. Each Settling Bank shall, as promptly as
practical during normal business hours on each Settlement Date, effect a wire
transfer of immediately available funds to the Agent in the amount of its
Settlement Amount. The Agent shall, as promptly as practicable during normal
business hours on each Settlement Date, effect a wire transfer of immediately
available funds to each Bank of the Settlement Amount to be paid to such Bank.
All funds advanced by any Bank as a Settling Bank pursuant to this ss.2.7(b)
shall for all purposes be treated as a Revolving Credit Loan made by such
Settling Bank to the Borrowers and all funds received by any Bank pursuant to
this ss.2.7(b) shall for all purposes be treated as repayment of amounts owed by
the Borrowers with respect to Revolving Credit Loans made by such Bank as of the
date received by the Agent. In the event that any bankruptcy, reorganization,
liquidation, receivership or similar cases or proceedings in which any of the
Borrowers is a debtor prevents a Settling Bank from making any Revolving Credit
Loan to effect a Settlement as contemplated hereby, such Settling Bank will make
such disposition and arrangements with the other Banks and the Agent with
respect to such Revolving Credit Loans, either by way of purchase of
participations, distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank's share of the outstanding Revolving
Credit Loans being equal, as nearly as may be, to such Bank's Commitment
Percentage of the outstanding amount of the Revolving Credit Loans.
(c) The Agent may (unless notified to the contrary by a
Settling Bank by 2:00 p.m. (Boston time) on the Settlement Date) assume that
each Settling Bank has made available to the Agent the Settlement Amount with
respect to its Revolving Credit Loans, and the Agent may (but shall not be
required to), in reliance upon such assumption, make available to the Borrowers
the aggregate Settlement Amount. If the Settlement Amount is made available to
the Agent (or, conversely, if the Agent makes the Settlement Amount available to
a Bank entitled thereto) on a date after the Settlement Date, such Settling Bank
shall pay the Agent (or, conversely, the Agent shall pay such Bank entitled to
such Settlement Amount) on demand an amount equal to the product of (i) the
average computed for the period referred to in clause (iii) below, of the
weighted average annual interest rate paid by the Agent or such Bank, as
applicable, for federal funds acquired by the Agent or such Bank, as applicable
during each day included in such period times (ii) the Settlement Amount, times
(iii) a fraction, the numerator of which is the number of days that elapse from
and including such Settlement Date to but not including the date on which the
Settlement Amount shall become immediately available to the Agent or such Bank,
as applicable, and the denominator of which is 365; upon payment of such amount
the Settling Bank shall be deemed to have delivered the Settlement Amount of
such Settling Bank on the Settlement Date and shall become entitled to interest
payable by the Borrowers with respect to such Bank's Settlement Amount as if
such share were delivered on the Settlement Date. If the Settlement Amount is
not in fact made available to the Agent by the Settling Bank within three (3)
Business Days of such Settlement Date, the Agent shall be entitled to debit the
Borrowers' accounts to recover such amount from the Borrowers, with interest
thereon at the rate per annum applicable to any Loans made on such Settlement
Date.
20
(d) The failure or refusal of any of the Banks to make
available to the Agent at the aforesaid time on any date the amount of the Loans
to be made by such Bank shall not relieve any other Bank from its obligations
hereunder to make Settlements and Loans, on such Drawdown Date or on any
subsequent Drawdown Date, but in no event shall any Bank or the Agent be
responsible for funding or otherwise be liable for the failure of any other Bank
to make the Loans to be made by such other Bank.
ss.2.8. Optional Prepayments or Repayments of Loans. The Borrowers
shall have the right, at their election, to repay or prepay the outstanding
amount of the Revolving Credit Loans, as a whole or in part, at any time without
penalty or premium; provided (i) each partial prepayment shall be in the
principal amount of $250,000 or an integral multiple thereof, and (ii) that the
full or partial prepayment of the outstanding amount of any Eurodollar Rate
Loans pursuant to this ss.2.9 may be made only on the last day of the Interest
Period relating thereto. The Borrowers shall give the Agent, no later than 11:00
a.m. (Boston time) (a) at least one (1) Business Day written notice (or
telephonic notice confirmed in writing) of such proposed prepayment or
repayment, written notice (or telephonic notice confirmed in writing) of any
proposed prepayment or repayment pursuant to this ss.2.9 of Base Rate Loans and
(b) at least three (3) Eurodollar Business Days written notice (or telephonic
notice confirmed in writing) of any proposed prepayment or repayment pursuant to
this ss.2.9 of Eurodollar Rate Loans, in each case, specifying the proposed date
of prepayment or repayment of Revolving Credit Loans and the principal amount to
be paid. Each such partial prepayment shall be applied first to the principal of
Base Rate Loans and then to the principal of Eurodollar Rate Loans.
ss.3. LETTERS OF CREDIT.
ss.3.1. Letter of Credit Commitments.
(a) Subject to the terms and conditions hereof and the
execution and receipt of a Loan and Letter of Credit Request reflecting the
Maximum Drawing Amount of all Letters of Credit (including the requested Letter
of Credit) and a Letter of Credit Application, the Agent, on behalf of the Banks
and in reliance upon the agreement of the Banks set forth in ss.3.1(b) and upon
the representations and warranties of the Borrowers contained herein, agrees to
issue standby letters of credit, in such form as may be requested from time to
time by the Borrowers and agreed to by the Agent; provided, however, that, after
giving effect to such request, (i) the aggregate Maximum Drawing Amount of all
letters of credit issued at any time under this ss.3.1(a) (the "Letters of
Credit") shall not exceed $10,000,000 and (ii) the aggregate Maximum Drawing
Amount of all Letters of Credit plus the sum of the outstanding amount of the
Revolving Credit Loans shall not exceed the Total Commitment; and provided
further that no Letter of Credit shall have an expiration date later than the
earlier of (i) one year after the date of issuance of the Letter of Credit, or
(ii) thirty (30) days prior to the Revolving Credit Maturity Date.
(b) Each Bank severally agrees that it shall be absolutely
liable, without regard to the occurrence of any Default or Event of Default or
any other condition precedent whatsoever, to the extent of such Bank's
Commitment Percentage thereof, to reimburse the Agent
21
on demand for the amount of each draft paid by the Agent under each Letter of
Credit to the extent that such amount is not reimbursed by the Borrowers
pursuant to ss.3.2 (such agreement for a Bank being called herein the "Letter of
Credit Participation" of such Bank). The Agent shall not issue any Letter of
Credit unless all of the conditions precedent under ss.11 hereof have been
satisfied.
(c) Each such payment made by a Bank shall be treated as the
purchase by such Bank of a participating interest in the Borrowers'
Reimbursement Obligation under ss.3.2 in an amount equal to such payment. Each
Bank shall share in accordance with its participating interest in any interest
which accrues pursuant to ss.3.2.
ss.3.2. Reimbursement Obligation of the Borrowers. In order to induce
the Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrowers hereby agree to reimburse or pay to the Agent
with respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder as follows:
(a) on each date that any draft presented under any Letter of
Credit is honored by the Agent or the Agent otherwise makes payment with respect
thereto, (i) the amount paid by the Agent under or with respect to such Letter
of Credit, and (ii) the amount of any taxes, fees, charges or other costs and
expenses whatsoever incurred by the Agent or any Bank in connection with any
payment made by the Agent or any Bank under, or with respect to, such Letter of
Credit; and
(b) upon the Revolving Credit Maturity Date or the
acceleration of the Reimbursement Obligations with respect to all Letters of
Credit in accordance with ss.13, an amount equal to the then Maximum Drawing
Amount of all Letters of Credit, which amount shall be held by the Agent for the
benefit of the Banks and the Agent as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office
in immediately available funds. Interest on any and all amounts remaining unpaid
by the Borrowers under this ss.3.2 at any time from the date such amounts become
due and payable (whether as stated in this ss.3.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in ss.5.7 for overdue amounts.
ss.3.3. Letter of Credit Payments. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrowers of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. On the date that such draft is paid or other
payment is made by the Agent, the Agent shall promptly notify the Banks of the
amount of any unpaid Reimbursement Obligation. All such unpaid Reimbursement
Obligations with respect to Letters of Credit shall, provided that no Event of
Default under ss.13(g) or 13(h) has occurred, become automatically a Revolving
Credit Loan. No later than 3:00 p.m. (Boston time) on the Business Day next
following the receipt of such notice, each Bank shall make available to the
Agent, at the Agent's Head Office, in immediately available funds, such Bank's
Commitment
22
Percentage of such unpaid Reimbursement Obligation, together with an amount
equal to the product of (a) the average, computed for the period referred to in
clause (c) below, of the weighted average interest rate paid by the Agent for
federal funds acquired by the Agent during each day included in such period,
times (b) the amount equal to such Bank's Commitment Percentage of such unpaid
Reimbursement Obligation, times (c) a fraction, the numerator of which is the
number of days that have elapsed from and including the date the Agent paid the
draft presented for honor or otherwise made payment until the date on which such
Bank's Commitment Percentage of such unpaid Reimbursement Obligation shall
become immediately available to the Agent, and the denominator of which is 365.
The responsibility of the Agent to the Borrowers and the Banks shall be only to
determine that the documents (including each draft) delivered under each Letter
of Credit in connection with such presentment shall be in conformity in all
material respects with such Letter of Credit.
ss.3.4. Obligations Absolute. The Borrowers' obligations under this
ss.3 shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrowers may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. Subject to the obligations of the Banks
pursuant to Article V of the Uniform Commercial Code, the Borrowers further
agree with the Agent and the Banks that the Agent and the Banks shall not be
responsible for, and the Borrowers' Reimbursement Obligations under ss.3.2 shall
not be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even if such documents should in fact prove to
be in any or all respects invalid, fraudulent or forged, or any dispute between
or among the Borrowers, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrowers against the beneficiary of
any Letter of Credit or any such transferee. The Agent and the Banks shall not
be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit. The Borrowers agree that any action taken
or omitted by the Agent or any Bank under or in connection with each Letter of
Credit and the related drafts and documents, if done in good faith, shall be
binding upon the Borrowers and shall not result in any liability on the part of
the Agent or any Bank to the Borrowers.
ss.3.5. Reliance by Agent. To the extent not inconsistent with ss.3.4,
the Agent shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent.
23
ss.4. THE TERM LOAN FACILITIES.
ss.4A. Series A Term Loan.
ss.4A.1. Commitment to Lend.
Subject to the terms and conditions set forth herein and subject to
ss.27 hereof, each Bank agrees to lend to the Borrowers on the Closing Date, a
term loan in the amount of its Series A Term Loan Percentage of the principal
amount of $10,000,000, the proceeds of which shall be used for acquisitions,
debt refinancings and general corporate purposes (the "Series A Term Loan").
ss.4A.2. The Series A Term Notes. Series A Term Loan shall be evidenced
by separate promissory notes of the Borrowers in substantially the form of
Exhibit F hereto (each a "Series A Term Note"), dated as of the Closing Date and
completed with appropriate insertions. One Series A Term Note shall be payable
to the order of each Bank in a principal amount equal to such Bank's Series A
Term Loan Percentage of Series A Term Loan and representing the obligation of
the Borrowers to pay to such Bank such principal amount or, if less, the
outstanding amount of such Bank's Series A Term Loan Percentage of Series A Term
Loan, plus interest accrued thereon, as set forth below. The Borrowers
irrevocably authorize each Bank to make or cause to be made a notation on such
Bank's records reflecting the original principal amount of such Bank's Series A
Term Loan Percentage of Series A Term Loan and, at or about the time of such
Bank's receipt of any principal payment on such Bank's Series A Term Note, an
appropriate notation on such Bank's records reflecting such payment. The
aggregate unpaid amount set forth on such Bank's records shall be prima facie
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount shall not limit
or otherwise affect the obligations of the Borrowers hereunder or under any
Series A Term Note to make payments of principal of and interest on any Series A
Term Note when due.
ss.4A.3. Scheduled Repayments of Series A Term Loan. The Borrowers
promise to pay to the Agent for the account of the Banks the principal amount of
Series A Term Loan plus interest thereon as set forth in ss.5.1 hereof, in equal
consecutive quarterly installments, such installments to be due and payable on
January 31, April 30, July 31 and October 31, commencing October 31, 1997 with a
final payment on the Series A Term Loan Maturity Date in an amount equal to the
unpaid balance of Series A Term Loan.
ss.4A.4. Optional Prepayment of Series A Term Loan. The Borrowers shall
have the right at any time to prepay the Series A Term Notes on or before the
Series A Term Loan Maturity Date, as a whole, or in part, upon not less than
five (5) Business Days prior written notice to the Agent, without premium or
penalty, provided that (i) each partial prepayment shall be in the principal
amount of $250,000 or an integral multiple thereof, (ii) the full or partial
prepayment of the outstanding amount of any Eurodollar Rate Loan pursuant to
this ss.4A.4 may be made only on the last day of the Interest Period relating
thereto, and (iii) each partial prepayment shall be allocated among the Banks,
in proportion to the respective outstanding amount of each Bank's Series A Term
Note. Any optional prepayment of principal of Series A
24
Term Loan (I) pursuant to this ss.4A.4 shall include all interest accrued to the
date of prepayment and shall be applied against the scheduled installments of
principal due on Series A Term Loan in the inverse order of maturity. No amount
repaid with respect to Series A Term Loan may be reborrowed.
ss.4B. Series B Term Loan.
ss.4B.1. Commitment to Lend. Subject to the terms and conditions set
forth herein, each Series B Term Loan Bank agrees to lend to the Borrowers on
the Closing Date, a term loan in the amount of its Series B Term Loan Percentage
of the principal amount of $15,000,000, the proceeds of which shall be used for
acquisitions, debt refinancings and general corporate purposes (the "Series B
Term Loan").
ss.4B.2. The Series B Term Notes. Series B Term Loan shall be evidenced
by separate promissory notes of the Borrowers in substantially the form of
Exhibit F hereto (each a "Series B Term Note"), dated as of the Closing Date and
completed with appropriate insertions. One Series B Term Note shall be payable
to the order of each Series B Term Loan Bank in a principal amount equal to such
Bank's Series B Term Loan Percentage of Series B Term Loan and representing the
obligation of the Borrowers to pay to such Bank such principal amount or, if
less, the outstanding amount of such Bank's Series B Term Loan Percentage of
Series B Term Loan, plus interest accrued thereon, as set forth below. The
Borrowers irrevocably authorize each Series B Term Loan Bank to make or cause to
be made a notation on such Bank's records reflecting the original principal
amount of such Bank's Series B Term Loan Percentage of Series B Term Loan and,
at or about the time of such Bank's receipt of any principal payment on such
Bank's Series B Term Note, an appropriate notation on such Bank's records
reflecting such payment. The aggregate unpaid amount set forth on such Series B
Term Loan Bank's records shall be prima facie evidence of the principal amount
thereof owing and unpaid to such Bank, but the failure to record, or any error
in so recording, any such amount shall not limit or otherwise affect the
obligations of the Borrowers hereunder or under any Series B Term Note to make
payments of principal of and interest on any Series B Term Note when due.
ss.4B.3. Scheduled Repayments of Series B Term Loan. The Borrowers
promise to pay to the Agent for the account of the Series B Term Loan Banks the
principal amount of the Series B Term Loan plus interest thereon as set forth in
ss.5.1 hereof in (i) four (4) consecutive annual installments of $250,000 each,
such installments to be due and payable on July 31, 1999 through July 31, 2002
and (ii) thereafter the then remaining balance to be paid in equal consecutive
quarterly installments amortized over the remaining term of the Series B Term
Loan, such installments to be due and payable on the last day of each calendar
quarter commencing on October 31, 2002, with a final payment on the Series B
Term Loan Maturity Date in an amount equal to the unpaid balance of Series B
Term Loan.
ss.4B.4. Optional Prepayment of Series B Term Loan. The Borrowers shall
have the right at any time to prepay the Series B Term Notes on or before the
Series B Term Loan Maturity Date, as a whole, or in part, upon not less than
five (5) Business Days prior written notice to the Agent, provided that (i) each
partial prepayment shall be in the principal amount of
25
$250,000 or an integral multiple thereof, (ii) the full or partial prepayment of
the outstanding amount of any Eurodollar Rate Loan pursuant to this ss.4B.4 may
be made only on the last day of the Interest Period relating thereto, (iii) each
partial prepayment shall be allocated among the Banks, in proportion to the
respective outstanding amount of each Bank's Series B Term Note and (iv) if the
Borrowers prepay the Series B Term Loan, in whole or in part, on or before the
date which is one year from the Closing Date, the Borrowers shall pay a premium
with respect to each such prepayment in an amount equal to 0.50% of the amount
prepaid. Any optional prepayment of principal of Series B Term Loan pursuant to
this ss.4B.4 shall include all interest accrued to the date of prepayment and
shall be applied against the scheduled installments of principal due on Series B
Term Loan in the inverse order of maturity. No amount repaid with respect to
Series B Term Loan may be reborrowed.
ss.5. INTEREST, FEES, PAYMENTS, AND COMPUTATIONS; JOINT AND SEVERAL
LIABILITY.
ss.5.1. Interest. Except as otherwise provided in ss.5.7, the
outstanding principal amount of the Loans shall bear interest at the rate per
annum equal to the Applicable Rate. Interest shall be payable (a) quarterly in
arrears on the last Business Day of each calendar quarter for the quarter ending
on such date, for Base Rate Loans, (b) on the earlier of (i) the last day of the
applicable Interest Period or (ii) ninety (90) days after the Drawdown Date, on
Eurodollar Rate Loans, and (c) on the Revolving Credit Maturity Date, Series A
Term Loan Maturity Date or Series B Term Loan Maturity Date, as applicable. Any
change in the interest rate resulting from a change in the Base Rate is to be
effective at the beginning of the day of such change in the Base Rate.
ss.5.2. Fees.
(a) Commitment Fee. The Borrowers agree to pay to Agent for
the benefit of the Banks a commitment fee in an amount equal to the Commitment
Fee Percentage of the unused portion of the Total Commitment during each
calendar quarter or portion thereof from the Closing Date to the Revolving
Credit Maturity Date (or to the date of termination in full of the Total
Commitment, if earlier). This commitment fee shall be payable quarterly in
arrears on the first day of each calendar quarter for the immediately preceding
calendar quarter, with a final payment on the Revolving Credit Maturity Date.
The Agent agrees to pay to the Banks the commitment fee received under this
ss.5.2(a) pro-rata in accordance with their respective Commitment Percentages.
(b) Letter of Credit Fee. The Borrowers shall pay a fee (the
"Letter of Credit Fee") to the Agent equal to (i) the product of (A) two percent
(2%) multiplied by (B) the Maximum Drawing Amount of each Letter of Credit, plus
(ii) the Agent's customary issuance fee, payable in accordance with the Agent's
customary practice. That portion of the Letter of Credit Fee equal to one eighth
of one percent (1/8%) of the Maximum Drawing Amount of each Letter of Credit
shall be paid solely to the Agent, and the balance (other than the issuance fee)
shall be shared pro-rata by each of the Banks in accordance with their
respective Commitment Percentages. The Letter of Credit Fee shall be payable
quarterly in arrears on the first day of
26
each calendar quarter for the immediately preceding calendar quarter, with a
final payment on the expiration date of each Letter of Credit.
(c) The Borrowers shall pay to the Agent an agent's fee and an
underwriting fee as set forth in a separate letter agreement between the
Borrowers and the Agent.
ss.5.3. Payments.
(a) All payments of principal, interest, Reimbursement
Obligations, fees and any other amounts due hereunder or under any of the other
Loan Documents shall be made to the Agent, for the respective accounts of the
Banks and the Agent, received at the Agent's Head Office in immediately
available funds by 12:00 p.m. (Boston time) on any due date.
(b) All payments by the Borrowers hereunder and under any of
the other Loan Documents shall be made without setoff or counterclaim and free
and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any jurisdiction
or any political subdivision thereof or taxing or other authority therein unless
the Borrowers are compelled by law to make such deduction or withholding. If any
such obligation is imposed upon the Borrowers with respect to any amount payable
by them hereunder or under any of the other Loan Documents, the Borrowers will
pay to the Agent, for the account of the Banks or (as the case may be) the
Agent, on the date on which such amount is due and payable hereunder or under
such other Loan Document, such additional amount in Dollars as shall be
necessary to enable the Banks or the Agent to receive the same net amount which
the Banks or the Agent would have received on such due date had no such
obligation been imposed upon the Borrowers. In the event that the Borrowers are
required to make such deduction or withholding as a result of the fact that a
Bank is organized outside of the United States, such Bank shall use its
reasonable best efforts to transfer its Loans to an affiliate organized within
the United States if such transfer would have no adverse effect on such Bank or
the Loans. The Borrowers will deliver promptly to the Bank certificates or other
valid vouchers for all taxes or other charges deducted from or paid with respect
to payments made by the Borrowers hereunder or under such other Loan Document.
ss.5.4. Computations. All computations of interest on the Loans and of
Letter of Credit Fees or other fees shall, unless otherwise expressly provided
herein, be based on a 360-day year and paid for the actual number of days
elapsed. Except as otherwise provided in the definition of the term "Interest
Period" with respect to Eurodollar Rate Loans, whenever a payment hereunder or
under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension.
ss.5.5. Capital Adequacy. If any present or future law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) or the interpretation thereof by a court or governmental authority
with appropriate jurisdiction affects the amount of capital required or expected
to be maintained by any Bank or the Agent or any corporation
27
controlling such Bank or the Agent and such Bank or the Agent determines that
the amount of capital required to be maintained by it is increased by or based
upon the existence of such Bank's or the Agent's Loans, Letter of Credit
Participations or Letters of Credit, or commitment with respect thereto, then
such Bank or the Agent may notify the Borrowers of such fact. To the extent that
the costs of such increased capital requirements are not reflected in the Base
Rate (if relating to Base Rate Loans), the Borrowers and such Bank or (as the
case may be) the Agent shall thereafter attempt to negotiate in good faith,
within thirty (30) days of the day on which the Borrowers receive such notice,
an adjustment payable hereunder that will adequately compensate such Bank or the
Agent in light of these circumstances. If the Borrowers and such Bank or the
Agent are unable to agree to such adjustment within thirty (30) days of the date
on which the Borrowers receive such notice, then commencing on the date of such
notice (but not earlier than the effective date of any such increased capital
requirement), the fees payable hereunder shall increase by an amount that will,
in such Bank's or the Agent's reasonable determination, provide adequate
compensation. Each Bank and the Agent shall allocate such cost increases among
its customers in good faith and on an equitable basis.
ss.5.6. Certificate. A certificate setting forth any additional amounts
payable pursuant to ss.5.5 and a reasonable explanation of such amounts which
are due, submitted by any Bank or the Agent to the Borrowers, shall be
conclusive, absent manifest error, that such amounts are due and owing.
ss.5.7. Interest on Overdue Amounts. Overdue principal and (to the
extent permitted by applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall bear
interest compounded monthly and payable on demand at a rate per annum equal to
the Base Rate plus 4% until such amount shall be paid in full (after as well as
before judgment).
ss.5.8. Interest Limitation. Notwithstanding any other term of this
Agreement or any Note or any other document referred to herein or therein, the
maximum amount of interest which may be charged to or collected from any person
liable hereunder or under any Note by any Bank shall be absolutely limited to,
and shall in no event exceed, the maximum amount of interest which could
lawfully be charged or collected under applicable law (including, to the extent
applicable, the provisions of Section 5197 of the Revised Statutes of the United
States of America, as amended, 12 U.S.C. Section 85, as amended), so that the
maximum of all amounts constituting interest under applicable law, howsoever
computed, shall never exceed as to any person liable therefor such lawful
maximum, and any term of this Agreement, the Notes, the Letter of Credit
Applications, or any other document referred to herein or therein which could be
construed as providing for interest in excess of such lawful maximum shall be
and hereby is made expressly subject to and modified by the provisions of this
paragraph.
ss.5.9. Additional Costs, Etc. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank by any
28
central bank or other fiscal, monetary or other authority (whether or not having
the force of law), shall impose on any Bank any tax, levy, impost, duty, charge
fees, deduction or withholdings of any nature or requirements with respect to
this Agreement, the other Loan Documents, the Loans, such Bank's Commitment, the
Letters of Credit or any class of loans or commitments or letters of credit of
which any of the Loans, the Commitment or the Letters of Credit forms a part,
and the result of any of the foregoing is:
(i) to increase the cost to such Bank of making,
funding, issuing, renewing, extending or maintaining the Loans, such
Bank's Commitment, or the Letters of Credit; or
(ii) to reduce the amount of principal, interest or
other amount payable to such Bank hereunder on account of such Bank's
Commitment, the Loans, drawings under the Letters of Credit, or
(iii) to require such Bank to make any payment or to
forego any interest or other sum payable hereunder, the amount of which
payment or foregone interest or other sum is calculated by reference to
the gross amount of any sum receivable or deemed received by such Bank
from the Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made by such Bank
at any time and from time to time and as often as the occasion therefor may
arise, pay to such Bank such additional amounts as will be sufficient to
compensate such Bank for such additional cost, reduction, payment or foregone
interest or other sum (after such Bank shall have allocated the same fairly and
equitably among all customers of any class generally affected thereby).
ss.5.10. Concerning Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several
liability hereunder and under the other Loan Documents in consideration
of the financial accommodations to be provided by the Banks under this
Agreement, for the mutual benefit, directly and indirectly, of each of
the Borrowers and in consideration of the undertakings of each other
Borrower to accept joint and several liability for the Obligations.
(b) Each of the Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Borrowers, with respect to the payment and performance of all of the
Obligations (including, without limitation, any Obligations arising
under this ss.5.10), it being the intention of the parties hereto that
all the Obligations shall be the joint and several Obligations of each
of the Borrowers without preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail
to make any payment with respect to any of the Obligations as and when
due or to perform any of the
29
Obligations in accordance with the terms thereof, then in each such
event the other Borrowers will make such payment with respect to, or
perform, such Obligation.
(d) The Obligations of each of the Borrowers under the
provisions of this ss.5.10 constitute full recourse Obligations of each
of the Borrowers enforceable against each such corporation to the full
extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement or any other
circumstance whatsoever.
(e) Except as otherwise expressly provided in this Agreement,
each of the Borrowers hereby waives notice of acceptance of its joint
and several liability, notice of any Loans made under this Agreement,
notice of any action at any time taken or omitted by the Banks under or
in respect of any of the Obligations, and, generally, to the extent
permitted by applicable law, all demands, notices and other formalities
of every kind in connection with this Agreement. Each of the Borrowers
hereby assents to, and waives notice of, any extension or postponement
of the time for the payment of any of the Obligations, the acceptance
of any payment of any of the Obligations, the acceptance of any partial
payment thereon, any waiver, consent or other action or acquiescence by
the Banks at any time or times in respect of any default by any of the
Borrowers in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences
whatsoever by the Banks in respect of any of the Obligations, and the
taking, addition, substitution or release, in whole or in part, at any
time or times, of any security for any of the Obligations or the
addition, substitution or release, in whole or in part, of any of the
Borrowers. Without limiting the generality of the foregoing, each of
the Borrowers assents to any other action or delay in acting or failure
to act on the part of the Banks with respect to the failure by any of
the Borrowers to comply with any of its respective Obligations,
including, without limitation, any failure strictly or diligently to
assert any right or to pursue any remedy or to comply fully with
applicable laws or regulations thereunder, which might, but for the
provisions of this ss.5.10, afford grounds for terminating, discharging
or relieving any of the Borrowers, in whole or in part, from any of its
Obligations under this ss.5.10, it being the intention of each of the
Borrowers that, so long as any of the Obligations hereunder remain
unsatisfied, the Obligations of such Borrowers under this ss.5.10 shall
not be discharged except by performance and then only to the extent of
such performance. The Obligations of each of the Borrowers under this
ss.5.10 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, re-construction
or similar proceeding with respect to any of the Borrowers or the
Banks. The joint and several liability of the Borrowers hereunder shall
continue in full force and effect notwithstanding any absorption,
merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any of the Borrowers
or the Banks.
(f) The provisions of this ss.5.10 are made for the benefit of
the Banks and their successors and assigns, and may be enforced in good
faith against them from time to time against any or all of the
Borrowers as often as occasion therefor may arise and
30
without requirement on the part of the Banks first to marshal any of
their claims or to exercise any of their rights against any other
Borrower or to exhaust any remedies available to them against any other
Borrower or to resort to any other source or means of obtaining payment
of any of the Obligations hereunder or to elect any other remedy. The
provisions of this ss.5.10 shall remain in effect until all of the
Obligations shall have been paid in full or otherwise fully satisfied.
If at any time, any payment, or any part thereof, made in respect of
any of the Obligations, is rescinded or must otherwise be restored or
returned by the Banks upon the insolvency, bankruptcy or reorganization
of any of the Borrowers, or otherwise, the provisions of this ss.5.10
will forthwith be reinstated in effect, as though such payment had not
been made.
ss.5.11. New Borrowers. Any newly-created or newly-acquired
Subsidiaries shall become Borrowers hereunder by signing Notes, entering into an
amendment to this Agreement with the other parties hereto providing that such
Subsidiary shall become a Borrower hereunder, and providing such other
documentation as the Banks or the Agent may reasonably request including,
without limitation, documentation with respect to conditions noted in ss.10
hereof. In such event, the Agent is hereby authorized by the parties to amend
Schedule 1 hereto to include such Subsidiary as a Borrower hereunder.
ss.5.12. Election of Eurodollar Rate; Notice of Election; Interest
Periods; Minimum Amounts. (a) At the Borrowers' option, so long as no Default or
Event of Default has occurred and is then continuing, the Borrowers may (i)
elect to convert any Base Rate Loan or a portion thereof to a Eurodollar Rate
Loan, (ii) at the time of any Loan and Letter of Credit Request, specify that
such requested Revolving Credit Loan shall be a Eurodollar Rate Loan, or (iii)
upon expiration of the applicable Interest Period, elect to maintain an existing
Eurodollar Rate Loan as such, provided that the Borrowers gives notice to the
Agent pursuant to ss.5.12(b) hereof. Upon determining any Eurodollar Rate, the
Agent shall forthwith provide notice thereof to the Borrowers and each Bank, and
each such notice to the Borrowers shall be considered prima facie correct and
binding, absent manifest error.
(b) Three (3) Eurodollar Business Days prior to the making of
any Eurodollar Rate Loan or the conversion of any Base Rate Loan to a Eurodollar
Rate Loan, or, in the case of an outstanding Eurodollar Rate Loan, the
expiration date of the applicable Interest Period, the Borrowers shall give
written, telex or telecopy notice received by the Agent not later than 11:00
a.m. (Boston time) of its election pursuant to ss.5.12(a). Each such notice
delivered to the Agent shall specify the aggregate principal amount of the Loans
to be borrowed or maintained as or converted to Eurodollar Rate Loans and the
requested duration of the Interest Period that will be applicable to such
Eurodollar Rate Loan, and shall be irrevocable and binding upon the Borrower. If
the Borrowers shall fail to give the Agent notice of its election hereunder
together with all of the other information required by this ss.5.12(b) with
respect to any Loan, whether at the end of an Interest Period or otherwise, such
Loan shall be deemed a Base Rate Loan, and, if such Loan is an existing
Eurodollar Rate Loan, shall be automatically converted to a Base Rate Loan on
the last day of the Interest Period relating thereto. No Eurodollar Rate Loan
may be continued as such when any Default or Event of Default has occurred and
is continuing, but shall be automatically converted to a Base Rate Loan on the
last day of the Interest Period relating
31
thereto. The Agent shall promptly notify each Bank in writing (or by telephone
confirmed in writing or by telecopy) of such election by the Borrower hereunder.
(c) Notwithstanding anything herein to the contrary, the
Borrowers may not specify an Interest Period that would extend beyond the
maturity date of any Loan.
(d) All Eurodollar Rate Loans shall be in a minimum amount of
not less than $1,000,000. In no event shall the Borrowers have more than five
(5) different maturities of borrowings of Eurodollar Rate Loans outstanding at
any time.
ss.5.13. Eurodollar Indemnity. The Borrowers agree to indemnify the
Banks and the Agent and to hold them harmless from and against any reasonable
loss, cost or expense that the Banks and the Agent may sustain or incur as a
consequence of (a) default by the Borrowers in payment of the principal amount
of or any interest on any Eurodollar Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by any
Bank or the Agent to lenders of funds obtained by it in order to maintain its
Eurodollar Rate Loans, (b) default by the Borrowers in making a borrowing or
conversion after the Borrowers have given (or are deemed to have given) notice
pursuant to ss.2.6 or ss.5.12, and (c) the making of any payment of a Eurodollar
Rate Loan or the making of any conversion of any such Eurodollar Rate Loan to a
Base Rate Loan on a day that is not the last day of the applicable Interest
Period with respect thereto, including interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain any such Loans.
ss.5.14. Illegality; Inability to Determine Eurodollar Rate.
Notwithstanding any other provision of this Agreement (other than ss.5.8) if,
(a) the introduction of, any change in, or any change in the interpretation of,
any law, regulation, treaty or directive applicable to any Bank or the Agent
shall make it unlawful, or any central bank or other governmental authority
having jurisdiction thereof shall assert that it is unlawful, for any Bank or
the Agent to perform its obligations in respect of any Eurodollar Rate Loans, or
(b) if the Agent shall reasonably determine or be notified by the Required Banks
that (i) by reason of circumstances affecting any Eurodollar interbank market,
adequate and reasonable methods do not exist for ascertaining the Eurodollar
Rate which would otherwise be applicable during any Interest Period, or (ii)
deposits of Dollars in the relevant amount for the relevant Interest Period are
not available in any Eurodollar interbank market, or (iii) the Eurodollar Rate
does not or will not accurately reflect the cost of obtaining or maintaining the
applicable Eurodollar Rate Loans during any Interest Period, then the Agent
shall promptly give telephonic, telex or cable notice of such determination to
the Borrowers and the Banks (which notice shall be conclusive and binding upon
the Borrower and the Banks). Upon such notification by the Agent, the obligation
of the Banks and the Agent to make Eurodollar Rate Loans or convert Base Rate
Loans to Eurodollar Rate Loans shall be suspended until the Agent or the
Required Banks, as the case may be, determine that such circumstances no longer
exist, and to the extent permitted by law the outstanding Eurodollar Rate Loans
shall continue to bear interest at the applicable rate based on the Eurodollar
Rate until the end of the applicable Interest Period, and shall be automatically
converted to Base Rate Loans in equal principal amounts on the last day of each
Interest Period applicable to such Eurodollar Rate Loans, or within such earlier
period as may be required by applicable law.
32
ss.6. REPRESENTATIONS AND WARRANTIES. The Borrowers jointly and
severally represent and warrant to the Banks that on and as of the date of this
Agreement (any disclosure on a schedule pursuant to this ss.6 shall be deemed to
apply to all relevant representations and warranties, regardless of whether such
schedule is referenced in each relevant representation):
ss.6.1. Corporate Authority.
(a) Incorporation; Good Standing. Each of the Borrowers (i) is
a corporation duly organized, validly existing and in good standing or
in current status under the laws of its respective state of
incorporation, (ii) has all requisite corporate power to own its
property and conduct its business as now conducted and as presently
contemplated, and (iii) is in good standing as a foreign corporation
and is duly authorized to do business in each jurisdiction in which its
property or business as presently conducted or contemplated makes such
qualification necessary except where a failure to be so qualified would
not have a material adverse effect on the business, assets or financial
condition of such Borrower.
(b) Authorization. The execution, delivery and performance of
its Loan Documents and the transactions contemplated hereby and thereby
(i) are within the corporate authority of each of the Borrowers, (ii)
have been duly authorized by all necessary corporate proceedings, (iii)
do not conflict with or result in any material breach or contravention
of any provision of law, statute, rule or regulation to which any of
the Borrowers is subject or any judgment, order, writ, injunction,
license or permit applicable to any of the Borrowers so as to
materially adversely affect the assets, business or any activity of the
Borrowers, and (iv) do not conflict with any provision of the corporate
charter or bylaws of the Borrowers or any agreement or other instrument
binding upon the Borrowers.
(c) Enforceability. The execution, delivery and performance of
the Loan Documents will result in valid and legally binding obligations
of the Borrowers enforceable against each in accordance with the
respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief
or other equitable remedy is subject to the discretion of the court
before which any proceeding therefor may be brought.
ss.6.2. Governmental Approvals. The execution, delivery and performance
by the Borrowers of the Loan Documents and the transactions contemplated hereby
and thereby do not require any approval or consent of, or filing with, any
governmental agency or authority other than those already obtained.
33
ss.6.3. Title to Properties; Leases. The Borrowers own all of the
assets reflected in the consolidated balance sheets as at the Balance Sheet Date
or acquired since that date (except property and assets sold or otherwise
disposed of in the ordinary course of business since that date), subject to no
mortgages, capitalized leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens. Schedule 6.3
sets forth a list of all of the Real Property of the Borrowers.
ss.6.4. Financial Statements; Solvency.
(a) There has been furnished to the Banks (i) consolidated
balance sheets of the Borrowers dated the Balance Sheet Date and
consolidated statements of operations for the fiscal year then ended,
Certified by Arthur Andersen & Co. or an independent accounting firm of
national standing acceptable to the Banks (the "Accountants") and (ii)
unaudited consolidated balance sheets of the Borrowers dated January
31, 1997 and unaudited consolidated statements of operations for the
nine (9) month period then ended. Said balance sheets and statements of
operations have been prepared in accordance with GAAP, fairly present
in all material respects the financial condition of the Borrowers, on a
consolidated basis, as at the close of business on the date thereof and
the results of operations for the period then ended. There are no
contingent liabilities of the Borrowers as of such date involving
material amounts, known to the officers of the Borrowers which have not
been disclosed in said balance sheets and the related notes thereto, as
the case may be.
(b) The Borrowers (both before and after giving effect to the
transactions contemplated by this Agreement) are solvent (i.e., they
have assets having a fair value in excess of the amount required to pay
their probable liabilities on their existing debts as they become
absolute and matured) and have, and expect to have, the ability to pay
their debts from time to time incurred in connection therewith as such
debts mature.
ss.6.5. No Material Changes, Etc. Since the Balance Sheet Date, there
have occurred no material adverse changes in the financial condition or business
of the Borrowers as shown on or reflected in the consolidated balance sheet of
the Borrowers as at the Balance Sheet Date, or the consolidated statement of
income for the fiscal year then ended other than changes in the ordinary course
of business which have not had any material adverse effect either individually
or in the aggregate on the business or financial condition of the Parent, the
Borrowers. Since the Balance Sheet Date, there has not been any Distribution.
ss.6.6. Permits, Franchises, Patents, Copyrights, Etc. Each of the
Borrowers possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
ss.6.7. Litigation. Except as shown on Schedules 6.7 and 6.16 hereto,
there are no actions, suits, proceedings or investigations of any kind pending
or, to the knowledge of the Borrowers, threatened against any Borrower before
any court, tribunal or administrative agency
34
or board which, if adversely determined, might, either in any case or in the
aggregate, materially adversely affect the properties, assets, financial
condition or business of the Borrowers, considered as a whole, or materially
impair the right of the Borrowers, considered as a whole, to carry on business
substantially as now conducted, or result in any substantial liability not
adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet or which question the validity of
any of the Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
ss.6.8. No Materially Adverse Contracts, Etc. None of the Borrowers is
subject to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation which in the judgment of the Borrowers'
officers has or is expected in the future to have a materially adverse effect on
the business, assets or financial condition of the Borrowers as a whole. None of
the Borrowers is a party to any contract or agreement which in the judgment of
the Borrowers' officers has or is expected to have any materially adverse effect
on the business of the Borrowers as a whole, except as otherwise reflected in
adequate reserves.
ss.6.9. Compliance With Other Instruments, Laws, Etc. None of the
Borrowers is violating any provision of its charter documents or by-laws or any
agreement or instrument by which any of them may be subject or by which any of
them or any of their properties may be bound or any decree, order, judgment, or
any statute, license, rule or regulation, in a manner which could result in the
imposition of substantial penalties or materially and adversely affect the
financial condition, properties or business of any of the Borrowers.
ss.6.10. Tax Status. The Borrowers have made or filed all federal and
state income and all other tax returns, reports and declarations required by any
jurisdiction to which any of them are subject (unless and only to the extent
that any Borrower has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported taxes); and have paid all taxes and
other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith; and have set aside on their books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Borrowers know of no basis for any
such claim.
ss.6.11. No Event of Default. Except as set forth on Schedule 6.11
hereto, no Default or Event of Default has occurred and is continuing as of the
date of this Agreement.
ss.6.12. Holding Company and Investment Company Acts. None of the
Borrowers is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935; nor is any of them a "registered
investment company", or an "affiliated company" or a "principal underwriter" of
a "registered investment company", as such terms are defined in the Investment
Company Act of 1940, as amended.
35
ss.6.13. Absence of Financing Statements, Etc. Except as contemplated
by ss.8.2 of this Agreement and as set forth on Schedule 6.13 hereto, there is
no financing statement, security agreement, chattel mortgage, real estate
mortgage or other document filed or recorded with any filing records, registry,
or other public office, which purports to cover, affect or give notice of any
present or possible future lien on, or security interest in, any assets or
property of any of the Borrowers or rights thereunder.
ss.6.14. Employee Benefit Plans.
(a) In General. Each Employee Benefit Plan has been maintained
and operated in compliance in all material respects with the provisions
of ERISA and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited
transactions.
(b) Terminability of Welfare Plans. Under each Employee
Benefit Plan which is an employee welfare benefit plan within the
meaning of ss.3(1) or ss.3(2)(B) of ERISA, no benefits are due unless
the event giving rise to the benefit entitlement occurs prior to plan
termination (except as required by Title I, part 6 of ERISA.) Each
Borrower or ERISA Affiliate, as appropriate, may terminate each such
Plan at any time (or at any time subsequent to the expiration of any
applicable bargaining agreement) in the discretion of such Borrower or
ERISA Affiliate without liability to any Person.
(c) Guaranteed Pension Plans. None of the Borrowers is a
sponsor of, or contributor to, a Guaranteed Pension Plan.
(d) Multiemployer Plans. No Borrower, nor any ERISA Affiliate
has incurred any material liability (including secondary liability) to
any Multiemployer Plan as a result of a complete or partial withdrawal
from such Multiemployer Plan under ss.4201 of ERISA or as a result of a
sale of assets described in ss.4204 of ERISA. No Borrower, nor any
ERISA Affiliate has been notified that any Multiemployer Plan is in
reorganization or is insolvent under and within the meaning of ss.4241
or ss.4245 of ERISA or that any Multiemployer Plan intends to terminate
or has been terminated under ss.4041A of ERISA.
ss.6.15. Use of Proceeds. The proceeds of the Loans shall be used as
follows: (a) the Term Loan shall have been used for the purposes set forth in
ss.4A.1 and ss.4B.1 of the Prior Credit Agreement; and (b) the Revolving Credit
Loans shall be used solely for working capital and other general corporate
purposes, Letters of Credit, to refinance other indebtedness of the Borrowers,
and to fund acquisitions permitted pursuant to ss.8.4 hereof. No proceeds of the
Loans shall be used in any way that will violate Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System.
ss.6.16. Environmental Compliance. The Borrowers have taken all
necessary steps to investigate the past and present condition and usage of the
Real Properties and the operations conducted thereon and, based upon such
diligent investigation, have determined that, except as shown on Schedule 6.16:
36
(a) None of the Borrowers, nor any operator of their
properties, is in violation, or alleged violation, of any judgment,
decree, order, law, permit, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising
under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act, the
Federal Clean Air Act, the Toxic Substances Control Act, or any state
or local statute, regulation, ordinance, order or decree relating to
health, safety or the environment (the "Environmental Laws"), which
violation would have a material adverse effect on the business, assets
or financial condition of the Borrowers on a consolidated basis.
(b) None of the Borrowers has received notice from any third
party including, without limitation: any federal, state or local
governmental authority, (i) that any one of them has been identified by
the United States Environmental Protection Agency ("EPA") as a
potentially responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B;
(ii) that any hazardous waste, as defined by 42 U.S.C. ss.6903(5), any
hazardous substances as defined by 42 U.S.C. ss.9601(14), any pollutant
or contaminant as defined by 42 U.S.C. ss.9601(33) and any toxic
substance, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Substances") which any
one of them has generated, transported or disposed of has been found at
any site at which a federal, state or local agency or other third party
has conducted or has ordered that any Borrower conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, legal or administrative
proceeding arising out of any third party's incurrence of costs,
expenses, losses or damages of any kind whatsoever in connection with
the release of Hazardous Substances.
(c) (i) No portion of the Real Property has been used for the
handling, processing, storage or disposal of Hazardous Substances
except in material compliance with applicable Environmental Laws; and
no underground tank or other underground storage receptacle for
Hazardous Substances is located on such properties; (ii) in the course
of any activities conducted by the Borrowers, or operators of the Real
Property, no Hazardous Substances have been generated or are being used
on such properties except in material compliance with applicable
Environmental Laws; (iii) there have been no unpermitted Releases or
threatened Releases of Hazardous Substances on, upon, into or from the
Real Property, which Releases would have a material adverse effect on
the value of such properties; (iv) to the best of the Borrowers'
knowledge, there have been no Releases on, upon, from or into any real
property in the vicinity of the Real Property which, through soil or
groundwater contamination, may have come to be located on, and which
would have a material adverse effect on the value of, such properties;
and (v) in addition, any Hazardous Substances that have been generated
on the Real Property have been transported offsite only by carriers
having an identification number issued by the
37
EPA, treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental
Laws, which transporters and facilities, to the best of the Borrowers'
knowledge, have been and are operating in material compliance with such
permits and applicable Environmental Laws.
(d) none of the Real Property is or shall be subject to any
applicable environmental clean-up responsibility law or environmental
restrictive transfer law or regulation, by virtue of the transactions
set forth herein and contemplated hereby.
ss.6.17. Perfection of Security Interests. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary under applicable law, or reasonably
requested by the Agent or any of the Banks, to establish and perfect the Agent's
security interests in the Collateral as described in the Security Documents
(including the notation of the Agent's security interests in motor vehicles on
the certificates of title relating to such vehicles). The Collateral and the
Agent's rights with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses, except for Permitted Liens. The
Borrowers are the owners of the Collateral free from any lien, security
interest, encumbrance and any other claim or demand, except for Permitted Liens.
ss.6.18. Certain Transactions. Except as set forth on Schedule 6.18 and
except for arm's length transactions pursuant to which the Borrowers make
payments in the ordinary course of business upon terms no less favorable than
the Borrowers could obtain from third parties, none of the officers, directors,
or employees of the Borrowers are presently a party to any transaction with the
Borrowers (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrowers, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
ss.6.19. Subsidiaries. Schedule 6.19 sets forth a complete and accurate
list of the Subsidiaries, including the name of each Subsidiary and its
jurisdiction of incorporation, together with the number of authorized and
outstanding shares of each Subsidiary. Each Subsidiary is directly or indirectly
wholly owned by the Parent. The Parent has good and marketable title to all of
the shares it purports to own of the stock of each Subsidiary, free and clear in
each case of any lien. All such shares have been duly issued and are fully paid
and non-assessable.
ss.6.20. Capitalization.
(a) Capital Stock. As of the Closing Date, the authorized
capital stock of the Parent consists of (i) 7,000,000 shares of Class A Common
stock (par value $.01 per share) of which 2,874,445 shares are outstanding, (ii)
1,000,000 shares of Class B Common Stock (par value $.01 per share) of which
1,000,000 shares are outstanding, (iii) 516,620 shares of Series A Redeemable
Preferred Stock (par value $.01 per share) of which 516,620 shares are
outstanding, (iv) 1,294,579 shares of Series B Redeemable Preferred Stock (par
value $.01 per share) of
38
which 1,294,579 shares are outstanding, (v) 1,000,000 shares of Series C
Redeemable Preferred Stock (par value $.01 per share) of which 424,306 shares
are outstanding, and (vi) 1,922,169 shares of Series D Convertible Preferred
Stock (par value $.01 per share) of which 1,922,169 shares are outstanding. All
such shares have been duly issued and are full paid and non-assessable.
(b) Options, Etc. Except as set forth on Schedule 6.20(b), no
Person has outstanding any rights (either pre-emptive or other) or options
(except for the options for common stock issued to management employees, in
accordance with a bona fide option plan approved by the Board of Directors of
the Parent) to subscribe for or purchase from the Parent, or any warrants or
other agreements providing for or requiring the issuance by the Parent of, any
capital stock or any securities convertible into or exchangeable for its capital
stock.
ss.6.21. True Copies of Charter and Other Documents. The Borrowers have
furnished the Agent copies, in each case true and complete as of the Closing
Date, of (a) all charter and other incorporation documents (together with any
amendments thereto) and (b) by-laws (together with any amendments thereto).
ss.6.22. Disclosure. No representation or warranty made by the
Borrowers in this Agreement or in any agreement, instrument, document,
certificate, statement or letter furnished to the Banks or the Agent by or on
behalf of or at the request of the Borrowers in connection with any of the
transactions contemplated by the Loan Documents contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which they are made.
ss.6.23. Deposit Accounts. Other than the accounts maintained at the
Agent's Head Office (the "Depository Accounts"), the Borrowers maintain the
deposit accounts listed on Schedule 6.23 hereto and no other deposit accounts,
unless approved in writing by the Agent. The aggregate amount of collected funds
held in each such deposit account at the close of any Business Day shall not
exceed the amount specified for such account on Schedule 6.23; any amounts in
excess of the amounts specified in Schedule 6.23 shall be immediately
transferred to the Depository Accounts.
ss.7. AFFIRMATIVE COVENANTS OF THE BORROWERS. The Borrowers jointly and
severally covenant and agree that, so long as any Loan or Note is outstanding or
the Banks have any obligation to make Loans or the Agent has any obligation to
issue, extend, or renew any Letters of Credit hereunder:
ss.7.1. Punctual Payment. The Borrowers will duly and punctually pay or
cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, fees and other amounts provided for in this Agreement and the other
Loan Documents, all in accordance with the terms of this Agreement and such
other Loan Documents.
39
ss.7.2. Maintenance of Office. The Borrowers will maintain their chief
executive offices at the locations set forth on Schedule 1 attached hereto, or
at such other place in the United States of America as each Borrower shall
designate upon 30 days prior written notice to the Agent.
ss.7.3. Records and Accounts. Each of the Borrowers will keep true and
accurate records and books of account in which full, true and correct entries
will be made in accordance with GAAP and with the requirements of all regulatory
authorities and maintain adequate accounts and reserves for all taxes (including
income taxes), depreciation, depletion, obsolescence and amortization of its
properties, all other contingencies, and all other proper reserves.
ss.7.4. Financial Statements, Certificates and Information. The
Borrowers will deliver to the Banks:
(a) as soon as practicable, but, in any event not later than
90 days after the end of each fiscal year of the Borrowers, the
consolidated and consolidating balance sheets of Borrowers as at the
end of such year, statements of cash flows, and the related
consolidated and consolidating statements of operations, each setting
forth in comparative form the figures for the previous fiscal year, all
such consolidated and consolidating financial statements to be in
reasonable detail, prepared, in accordance with GAAP and, with respect
to the consolidated financial statements, Certified by the Accountants.
In addition, simultaneously therewith, the Borrowers shall use their
best efforts to provide the Banks with a written statement from such
Accountants to the effect that the Borrowers are in compliance with the
covenants set forth in ss.9 hereof, and that, in making the examination
necessary to said certification, nothing has come to the attention of
such Accountants that would indicate that any Default or Event of
Default exists, or, if such accountants shall have obtained knowledge
of any then existing Default or Event of Default they shall disclose in
such statement any such Default or Event of Default; provided, that
such Accountants shall not be liable to the Banks for failure to obtain
knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than 45
days after the end of each fiscal quarter of the Borrowers, copies of
the consolidated and consolidating balance sheets and statement of
operations of the Borrowers as at the end of such quarter including
profit and loss statements by division, subject to year end
adjustments, and the related statement of cash flows, all in reasonable
detail and prepared in accordance with GAAP with a certification by the
principal financial or accounting officer of the Borrowers (the "CFO")
that the consolidated financial statements are prepared in accordance
with GAAP and fairly present the consolidated financial condition of
the Borrowers as at the close of business on the date thereof and the
results of operations for the period then ended;
(c) simultaneously with the delivery of the financial
statements referred to in (a) and (b) above, a statement in the form of
Exhibit G hereto (the "Compliance Certificate") certified by the CFO
that the Borrowers are in compliance with the covenants contained in
ss.ss.7, 8 and 9 hereof as of the end of the applicable period setting
40
forth in reasonable detail computations evidencing such compliance,
provided that if the Borrowers shall at the time of issuance of such
certificate or at any other time obtain knowledge of any Default or
Event of Default, the Borrowers shall include in such certificate or
otherwise deliver forthwith to the Banks a certificate specifying the
nature and period of existence thereof and what action the Borrowers
propose to take with respect thereto and a certificate of the
Borrowers' Chief Operating Officer in the form attached hereto as
Exhibit H with respect to environmental matters;
(d) contemporaneously with or promptly following the delivery
thereof to the board of directors of the Parent, copies of the
financial statements, financial projections, and variance reports
concerning the Parent in substantially the same form in which such
information is supplied to the board of directors of the Parent;
(e) contemporaneously with, or promptly following, the filing
or mailing thereof, copies of all material of a financial nature filed
with the Securities and Exchange Commission or sent to the stockholders
of the Parent or any of the Borrowers;
(f) from time to time such other financial data and other
information (including accountants' management letters) as the Banks
may reasonably request; and
(g) as soon as practicable, but in any event not later than
fifteen (15) days prior to the commencement of the next fiscal year of
the Borrowers, a copy of the annual budget for such fiscal year.
The Borrowers hereby authorize the Banks to disclose any information
obtained pursuant to this Agreement to all appropriate governmental regulatory
authorities where required by law; provided, however, that the Banks shall, to
the extent practicable and allowable under law, notify the Borrowers within a
reasonable period prior to the time any such disclosure is made; and provided
further, this authorization shall not be deemed to be a waiver of any rights to
object to the disclosure by the Banks of any such information which any Borrower
has or may have under the federal Right to Financial Privacy Act of 1978, as in
effect from time to time.
ss.7.5. Corporate Existence and Conduct of Business. Except where the
failure of a Borrower to remain so qualified would not materially adversely
impair the financial condition of the Borrowers on a consolidated basis, each
Borrower will do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, corporate rights and
franchises; effect and maintain its foreign qualifications, licensing,
domestication or authorization except as terminated by its Board of Directors in
the exercise of its reasonable judgment; use its best efforts to comply with all
applicable laws; and shall not become obligated under any contract or binding
arrangement which, at the time it was entered into would materially adversely
impair the financial condition of the Borrowers, on a consolidated basis. Each
Borrower will continue to engage primarily in the businesses now conducted by it
and in related businesses.
41
ss.7.6. Maintenance of Properties. The Borrowers will cause all
material properties used or useful in the conduct of their businesses to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrowers may be necessary so that the businesses carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this section shall prevent any Borrower from
discontinuing the operation and maintenance of any of its properties if such
discontinuance is, in the judgment of such Borrower, desirable in the conduct of
its or their business and which does not in the aggregate materially adversely
affect the business of the Borrowers on a consolidated basis.
ss.7.7. Insurance. The Borrowers will maintain with financially sound
and reputable insurance companies, funds or underwriters' insurance of the
kinds, covering the risks (other than risks arising out of or in any way
connected with personal liability of any officers and directors thereof, which
risks may, but shall not be required by the Banks to be, covered by insurance
maintained by the Borrowers) and in the relative proportionate amounts usually
carried by reasonable and prudent companies conducting businesses similar to
that of the Borrowers, but in no event less than the amounts and coverages set
forth in Schedule 7.7 hereto. In addition, the Borrowers will furnish from time
to time, upon the Agent's request, a summary of the insurance coverage of each
of the Borrowers, which summary shall be in form and substance satisfactory to
the Agent and, if requested by the Agent, will furnish to the Agent copies of
the applicable policies.
ss.7.8. Taxes. The Borrowers will each duly pay and discharge, or cause
to be paid and discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges (other than taxes, assessments and
other governmental charges imposed by foreign jurisdictions which in the
aggregate are not material to the business or assets of any Borrower on an
individual basis or of the Borrowers on a consolidated basis) imposed upon it
and its real properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies, which if unpaid might by law become a lien or charge upon any of its
property; provided, however, that any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if such Borrower shall
have set aside on its books adequate reserves with respect thereto; and
provided, further, that such Borrower will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose any lien which may have attached as security therefor.
ss.7.9. Inspection of Properties, Books, and Contracts. The Borrowers
shall permit the Banks, the Agent or any of their designated representatives,
upon reasonable notice, to visit and inspect any of the properties of the
Borrowers, to examine the books of account of the Borrowers (including the
making of periodic accounts receivable reviews), or contracts (and to make
copies thereof and extracts therefrom), and to discuss the affairs, finances and
accounts of the Borrowers with, and to be advised as to the same by, their
officers, all at such times and intervals as the Banks may reasonably request.
42
ss.7.10. Compliance with Laws, Contracts, Licenses and Permits;
Maintenance of Material Licenses and Permits. Each Borrower will (i) comply with
the provisions of its charter documents and by-laws and all agreements and
instruments by which it or any of its properties may be bound; (ii) comply with
all applicable laws and regulations (including Environmental Laws), decrees,
orders, judgments, licenses and permits, including, without limitation, all
environmental permits hereto ("Applicable Laws"), except where noncompliance
with such Applicable Laws would not have a material adverse effect in the
aggregate on the consolidated financial condition, properties or businesses of
the Borrowers; (iii) comply in all material respects with all agreements and
instruments by which it or any of its properties may be bound; (iv) maintain all
material operating permits for all landfills now owned or hereafter acquired;
and (v) dispose of hazardous waste only at licensed disposal facilities
operating, to the best of such Borrower's knowledge after reasonable inquiry, in
compliance with Environmental Laws. If at any time while the Notes, or any Loan
or Letter of Credit is outstanding or any Bank or the Agent has any obligation
to make Loans or issue Letters of Credit hereunder, any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that any Borrower may
fulfill any of its obligations hereunder, such Borrower will immediately take or
cause to be taken all reasonable steps within the power of such Borrower to
obtain such authorization, consent, approval, permit or license and furnish the
Banks with evidence thereof.
ss.7.11. Environmental Indemnification. The Borrowers covenant and
agree that they will indemnify and hold the Banks harmless from and against any
and all claims, expense, damage, loss or liability incurred by the Banks
(including all costs of legal representation incurred by the Banks) relating to
(a) any Release or threatened Release of Hazardous Substances on the Real
Property; (b) any violation of any Environmental Laws with respect to conditions
at the Real Property or the operations conducted thereon; or (c) the
investigation or remediation of offsite locations at which the Borrowers, or
their predecessors are alleged to have directly or indirectly Disposed of
Hazardous Substances. It is expressly acknowledged by the Borrowers that this
covenant of indemnification shall survive any foreclosure or any modification,
release or discharge of any or all of the Security Documents or the payment of
the Loans and shall inure to the benefit of the Banks, their successors and
assigns.
ss.7.12. Further Assurances. The Borrowers will cooperate with the
Banks and execute such further instruments and documents as the Banks shall
reasonably request to carry out to the Banks' satisfaction the transactions
contemplated by this Agreement, including granting additional mortgages on Real
Property at the Banks' request as set forth in ss.7.19 hereof.
ss.7.13. Notice of Potential Claims or Litigation. The Borrowers shall
deliver to the Banks, within 30 days of receipt thereof, written notice of the
initiation of any action, claim, complaint, or any other notice of dispute or
potential litigation (including without limitation any alleged violation of any
Environmental Law), wherein the potential liability is in excess of $500,000,
together with a copy of each such notice received by any Borrower.
43
ss.7.14. Notice of Certain Events Concerning Insurance and
Environmental Claims.
(a) The Borrowers will provide the Banks with written notice
as to any cancellation or material change in any insurance of any of
the Borrowers within ten (10) Business Days after such Borrower's
receipt of any notice (whether formal or informal) of such cancellation
or change by any of its insurers.
(b) The Borrowers will promptly notify the Banks in writing of
any of the following events:
(i) upon any Borrower's obtaining knowledge of any
violation of any Environmental Law regarding the Real Property or any
Borrower's operations which violation could have a material adverse
effect on the Real Property or on any Borrower's operations; (ii) upon
any Borrower's obtaining knowledge of any potential or known Release,
or threat of Release, of any Hazardous Substance at, from, or into the
Real Property which it reports in writing or is reportable by it in
writing to any governmental authority and which is material in amount
or nature or which could materially affect the value of the Real
Property; (iii) upon any Borrower's receipt of any notice of violation
of any Environmental Laws or of any Release or threatened Release of
Hazardous Substances, including a notice or claim of liability or
potential responsibility from any third party (including without
limitation any federal, state or local governmental officials) and
including notice of any formal inquiry, proceeding, demand,
investigation or other action with regard to (A) any Borrower's, or any
Person's operation of the Real Property, (B) contamination on, from or
into the Real Property, or (C) investigation or remediation of offsite
locations at which any Borrower, or any of their predecessors are
alleged to have directly or indirectly Disposed of Hazardous
Substances; (iv) upon any Borrower's obtaining knowledge that any
expense or loss has been incurred by such governmental authority in
connection with the assessment, containment, removal or remediation of
any Hazardous Substances with respect to which any Borrower may be
liable or for which a lien may be imposed on the Real Property; or (v)
any setoff, claims (including, with respect to the Real Estate,
environmental claims), withholdings or other defenses to which any of
the Collateral, or the Agent's rights with respect to the Collateral,
are subject.
ss.7.15. Response Actions. The Borrowers covenant and agree that if any
Release or Disposal of Hazardous Substances shall occur or shall have occurred
on the Real Property, the Borrowers will cause the prompt containment and
removal of such Hazardous Substances and remediation of the Real Property as
necessary to comply with all Environmental Laws or to preserve the value of the
Real Property.
ss.7.16. Environmental Assessments. If (a) with respect to the Real
Property subject to a Mortgage, the Banks in their good faith judgment, after
discussion with the Borrowers, have reason to believe that the environmental
condition of such Real Property has deteriorated, after reasonable notice by the
Banks, whether or not an Event of Default shall have occurred, or (b) with
respect to Real Property not subject to a Mortgage, the Banks so request, the
Banks may,
44
from time to time, for the purpose of assessing the value of the Real
Property, obtain one or more environmental assessments or audits of the Real
Property prepared by a hydrogeologist, an independent engineer or other
qualified consultant or expert approved by the Banks to evaluate or confirm (i)
whether any Hazardous Substances are present in the soil or water at the Real
Property and (ii) whether the use and operation of the Real Property complies
with all Environmental Laws. Environmental assessments may include without
limitation detailed visual inspections of the Real Property including, without
limitation, any and all storage areas, storage tanks, drains, dry wells and
leaching areas, and the taking of soil samples, surface water samples and ground
water samples, as well as such other investigations or analyses as the Banks
deem appropriate. All such environmental assessments shall be at the sole cost
and expense of the Borrowers.
ss.7.17. Notice of Default. The Borrowers will promptly notify the
Banks in writing of the occurrence of any Default or Event of Default. If any
Person shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this Agreement
or any other note, evidence of indebtedness, indenture or other obligation
evidencing indebtedness in excess of $250,000 as to which any Borrower is a
party or obligor, whether as principal or surety, the Borrowers shall forthwith
give written notice thereof to the Banks, describing the notice of action and
the nature of the claimed default.
ss.7.18. Closure and Post Closure Liabilities. The Borrowers shall at
all times adequately accrue, in accordance with GAAP, and fund, as required by
applicable Environmental Laws, all closure and post closure liabilities with
respect to the operations of the Borrowers.
ss.7.19. Additional Mortgages. If after the Closing Date the Agent so
requests, the Borrowers shall forthwith execute and deliver to the Agent a fully
executed mortgage or deed of trust over Real Property of the Borrowers in
addition to the Sanco Landfill, the Waste USA Landfill, the Sawyer Real Estate
and the Casella TIRES Real Estate, in form and substance satisfactory to the
Agent, together with title insurance policies, surveys, evidences of insurance,
legal opinions and other documents and certificates with respect to such Real
Property as the Agent may request. The Borrowers agree that following the taking
of such actions with respect to such Real Property, the Agent shall have a valid
and enforceable first priority mortgage or deed of trust over such Real
Property, subject only to Permitted Liens. If after the Closing Date the Agent
so requests, the Borrowers shall forthwith execute and deliver to the Agent
fully executed amendments to the Mortgages, in form and substance satisfactory
to the Agent, together with title insurance policy endorsements, legal opinions
and other documents and certificates with respect to such amendments as the
Agent may request in order to confirm the Agent's first priority security
interest in the Real Property subject to such Mortgages.
ss.7.20. Subsidiaries. The Parent shall at all times directly or
indirectly through a Subsidiary own all of the shares of the capital stock of
each Subsidiary.
ss.7.21. Interest Rate Protection. The Borrower shall enter into an
interest rate protection arrangement satisfactory to the Agent in respect of a
notional principal amount of not less than fifty percent (50%) of the sum of the
Total Commitment plus the outstanding principal
45
amount of the Term Loans plus the principal amount of capitalized leases and
other Indebtedness for borrowed money if the Parent does not complete an equity
offering by November 30, 1997 which raises net proceeds (after payment of all
fees and expenses relating to such offering and redemption of the Parent's
Series C Redeemable Preferred Stock) in excess of $30,000,000. The Borrower
shall maintain such arrangements in full force and effect as provided therein
until the Commitments are terminated and all Loans have been repaid in full, and
shall not modify, terminate, or transfer such arrangements during such period
without the prior written consent of the Agent.
ss.8. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. The Borrowers agree
that, so long as any Loan or any Note is outstanding or the Banks have any
obligation to make Loans or the Agent has any obligation to issue, extend or
renew any Letters of Credit hereunder:
ss.8.1. Restrictions on Indebtedness. None of the Borrowers shall
become or be a guarantor or surety of, or otherwise create, incur, assume, or be
or remain liable, contingently or otherwise, with respect to any Indebtedness,
or become or be responsible in any manner (whether by agreement to purchase any
obligations, stock, assets, goods or services, or to supply or advance any
funds, assets, goods or services or otherwise) with respect to any undertaking
or Indebtedness of any other Person, or incur any Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under this
Agreement or the Loan Documents;
(b) Subject to ss.8.9, Subordinated Debt;
(c) Existing Indebtedness with respect to loans and
capitalized leases listed on Schedule 8.1(c) hereto in an amount not to
exceed $3,500,000, on the terms and conditions in effect as of the date
hereof, together with any renewals, extensions or refinancings thereof
on terms which are not materially different than those in effect as of
the date hereof; provided that no such Indebtedness may be prepaid
without prior written consent of the Required Banks;
(d) Current liabilities incurred in the ordinary course of
business not incurred through (i) the borrowing of money, or (ii) the
obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with normal
purchases of goods and services;
(e) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of ss.7.8 and
Indebtedness of the Borrowers secured by liens of carriers,
warehousemen, mechanics and materialmen permitted by ss.8.2;
46
(f) Indebtedness in respect of judgments or awards which have
been in force for less than the applicable period for taking an appeal
so long as execution is not levied thereunder or in respect of which
any Borrower shall at the time in good faith be prosecuting an appeal
or proceedings for review and in respect of which a stay of execution
shall have been obtained pending such appeal or review and in respect
of which the Borrowers have maintained adequate reserves;
(g) Indebtedness of any Borrower with respect to guaranty,
suretyship or indemnification obligations in connection with such
Borrower's performance of services for its respective customers in the
ordinary course of its business;
(h) [Intentionally omitted];
(i) Indebtedness of any Subsidiary owing to the Parent;
(j) Intercompany Indebtedness among the Subsidiaries;
(k) Indebtedness in respect of a letter of credit issued by
Allbank Bank in the face amount of $168,000; provided that if the
Agent, in its sole and absolute discretion, at any time and for any
reason so requests, the Borrowers shall promptly replace such letter of
credit with a Letter of Credit issued by the Agent pursuant to the
terms of this Credit Agreement;
(l) Indebtedness incurred in connection with the acquisition
after the date hereof of any personal property by the Borrowers under
any lease; provided that the aggregate outstanding principal amount of
such Indebtedness of the Borrowers shall not exceed $10,000,000 at any
time;
(m) Indebtedness incurred in connection with the acquisition
by the Borrowers of real or personal property; provided that the
aggregate principal amount of such Indebtedness of the Borrowers shall
not exceed $5,000,000 at any time;
(n) Indebtedness in an aggregate amount not to exceed
$10,501,284 payable to Clinton County, New York under and in accordance
with the terms of the Clinton Lease; and
(o) Indebtedness in respect of non-compete payments in the
amount of $600,000 payable to Kenneth Mead payable over a term of four
(4) years, with payments of $200,000 in each of 1998 and 1999 and
payments of $100,000 in each of 2000 and 2001.
(p) Indebtedness under fuel price swaps, fuel price caps, and
fuel price collar or floor agreements, and similar agreements or
arrangements designed to protect against or manage fluctuations in fuel
prices with respect to fuel purchased in the ordinary course of
business of the Borrowers, provided that the aggregate amount of such
agreements do
47
not exceed $500,000, the maturity of such agreements do not exceed six
(6) months and the terms are consistent with past practices of the
Borrowers.
ss.8.2. Restrictions on Liens. None of the Borrowers will create or
incur or suffer to be created or incurred or to exist any lien, encumbrance,
mortgage, pledge, negative pledge, charge, restriction or other security
interest of any kind upon any property or assets of any character, whether now
owned or hereafter acquired, or upon the income or profits therefrom; or
transfer any of such property or assets or the income or profits therefrom for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other obligation in priority to payment of its general creditors; or
acquire, or agree or have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money security agreement,
device or arrangement; or suffer to exist for a period of more than 30 days
after the same shall have been incurred any Indebtedness or claim or demand
against it which if unpaid might by law or upon bankruptcy or insolvency, or
otherwise, be given any priority whatsoever over its general creditors; or sell,
assign, pledge or otherwise transfer any accounts, contract rights, general
intangibles or chattel paper, with or without recourse, except as follows (the
"Permitted Liens"):
(a) purchase money security interests in or purchase money
liens on property other than the Mortgaged Property to secure
Indebtedness permitted under ss.8.1(m) hereof, provided that such Liens
(i) shall encumber only the property or assets so acquired, (ii) shall
not exceed the fair market value thereof and (iii) shall not encumber
property with a value in excess of $10,000,000;
(b) Liens to secure taxes, assessments and other government
charges or claims for labor, material or supplies in respect of
obligations not overdue;
(c) Deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(d) Liens in respect of judgments or awards, the Indebtedness
with respect to which is permitted by ss.8.1(e);
(e) Liens of carriers, warehousemen, mechanics and
materialmen, and other like liens, in existence less than 120 days from
the date of creation thereof in respect of obligations not overdue;
(f) Encumbrances consisting of easements, rights of way,
zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which any Borrower is a party, and other minor
liens or encumbrances none of which in the opinion of the respective
Borrower interferes materially with the use of the property affected in
the ordinary conduct of the business of such Borrower, which defects do
not individually or in the aggregate have a material adverse effect on
the business of such Borrower individually or of the Borrowers on a
consolidated basis;
48
(g) Liens existing as of the date hereof securing Indebtedness
permitted under ss.8.1(c) hereof and listed on Schedule 8.2(g) hereto;
(h) Liens granted pursuant to the Security Documents;
(i) A second mortgage lien on the Waste USA Landfill in favor
of the sellers of the Waste USA Landfill, subordinated to the Agent's
Mortgage on terms acceptable to the Banks;
(j) Liens on the assets of Bristol Waste Management, Inc.
granted to secure the Indebtedness permitted by ss.8.1(k) hereof and
listed on Schedule 8.2(k) hereto; and
(k) Liens granted to secure the Indebtedness permitted by
ss.8.1(l) hereof.
ss.8.3. Restrictions on Investments. None of the Borrowers shall make
or permit to exist or to remain outstanding any other Investment other than:
(a) Investments in obligations of the United States of America
and agencies thereof and obligations guaranteed by the United States of
America that are due and payable within one year from the date of
acquisition;
(b) certificates of deposit, time deposits or repurchase
agreements which are fully insured or are issued by commercial banks
organized under the laws of the United States of America or any state
thereof and having a combined capital, surplus, and undivided profits
of not less than $100,000,000;
(c) commercial paper, maturing not more than nine months from
the date of issue, provided that, at the time of purchase, such
commercial paper is not rated lower than "P-1" by Moody's Investors
Service, Inc., or "A-1" by Standard & Poor's Corporation;
(d) Investments associated with insurance policies required or
allowed by state law to be posted as financial assurance for landfill
closure and post-closure liabilities;
(e) Investments by any Borrower in any wholly owned Subsidiary
which is also a Borrower;
(f) other Investments not to exceed $500,000 in the aggregate
at any time outstanding; and
(g) Investments existing on the date hereof and listed on
Schedule 8.3(g) hereto;
49
(h) Any money market account, short-term asset management
account or similar investment account maintained with one of the Banks;
provided; that none of the Borrowers shall make or permit to exist or to remain
outstanding any Investment in any Subsidiary unless both before and after giving
effect thereto there does not exist a Default or Event of Default and no Default
or Event of Default would be created by the making of such Investment.
ss.8.4. Mergers, Consolidations, Sales. None of the Borrowers shall be
a party to any merger, consolidation or exchange of stock, or purchase or
otherwise acquire all or substantially all of the assets or stock of, or any
partnership or joint venture interest in, any other Person (except as otherwise
provided in this ss.8.4), or sell, transfer, convey or lease any stock or assets
or group of assets (except for (i) sales of equipment in the ordinary course of
business and (ii) sales of other assets so long as the aggregate book value of
such assets to be sold, together with the aggregate book value of all other such
assets sold by the Borrowers during the term of this Agreement, does not exceed
5% of Consolidated Total Assets at the time of such sale) or sell or assign,
with or without recourse, any receivables, provided, however notwithstanding the
foregoing so long as no Default or Event of Default has occured and is
continuing and the proposed transaction will not otherwise create an Event of
Default as a result thereof, the Borrowers shall be permitted (i) simultaneosuly
with the consummation of its initial public offering to exchange any of its
preferred stock into shares of common stock and (ii) to authorize and issue
additional shares of its capital stock. Notwithstanding the foregoing, a
Borrower may purchase or otherwise acquire for cash, stock or other
consideration all or substantially all of the assets or stock of any class of
any Person provided that (a) the Banks shall have been provided with a
Compliance Certificate demonstrating that the Borrowers are in current
compliance with and, giving effect to the proposed acquisition (including any
borrowings made or to be made in connection therewith), will continue to be in
compliance with, all of the covenants in ss.9 hereof; (b) no Event of Default
has occurred and is continuing and the proposed transaction will not otherwise
create an Event of Default hereunder; (c) the business or assets to be acquired
involves solid waste collection, hauling, recycling or transfer or related
businesses; (d) the business or assets to be acquired operates in the United
States; (e) all of the assets to be acquired shall be pledged to the Agent for
the benefit of the Banks and shall be owned by an existing or newly created
Subsidiary of the Parent, 100% of the stock of which has been or will be pledged
to the Agent on behalf of the Banks and which is a Borrower or, in the case of a
stock acquisition, the acquired company shall become or shall be merged with a
wholly-owned Subsidiary of the Parent that is a Borrower; (f) a copy of the
purchase agreement, together with audited (if available, or otherwise unaudited)
financial statements for any business to be acquired for the preceding two (2)
fiscal years and due diligence summaries shall have been furnished to the Banks,
if the purchase price, excluding the payment of all fees and expenses relating
to such purchase, exceeds $1,000,000; (g) if such acquisition is made by a
merger, such Borrower shall be the surviving entity; (h) the cash consideration
in connection with any such acquisition (including the aggregate amount of all
liabilities assumed) shall not exceed $5,000,000; and (i) the Borrower shall
provide to the Banks written consent or approval of the board of directors or
equivalent governing body of the entity whose business or assets are to be
acquired. Notwithstanding the foregoing, no Person may acquire a controlling
interest in any Borrower,
50
nor may a Borrower purchase or otherwise acquire all or substantially all of the
assets or stock of any class of another Borrower, in each case, without the
prior written consent of the Banks. In addition, notwithstanding the foregoing,
no Borrower shall merge with or into any Person except for mergers of a
non-Borrower into a Borrower as permitted by clause (g) of the second sentence
of this ss.8.4; provided, however, that so long as (x) no Default or Event of
Default has occurred and is continuing, or would occur after giving effect
thereto, and (y) the surviving entity becomes a Borrower hereunder and all
assets of such surviving entity are pledged to the Agent for the benefit of the
Banks, North Country Environmental Services, Inc. may merge with a newly created
corporation which is formed solely for the purpose of acquiring the assets of
North Country Environmental Services, Inc. only and which is directly or
indirectly wholly-owned by the Parent.
ss.8.5. Sale and Leaseback. None of the Borrowers shall enter into any
arrangement, directly or indirectly, whereby any Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property which such Borrower intends to use for substantially the
same purpose as the property being sold or transferred, without the prior
written consent of the Banks.
ss.8.6. Restricted Distributions and Redemptions. None of the Borrowers
will declare or pay any cash Distributions (other than from insurance proceeds);
provided that any Subsidiary may declare or pay cash Distributions to the
Parent. In addition, the Borrowers shall not redeem, convert, retire or
otherwise acquire shares of any class of capital stock of the Borrowers in
aggregate amount in excess of $100,000 during the term of this Agreement;
provided, that the Parent may (a) repurchase the shares of Series A Redeemable
Preferred Stock or Series B Redeemable Preferred Stock pursuant to the terms of
Section C.8(e)(i) of the Parent's Amended and Restated Certificate of
Incorporation simultaneously with or following the exercise, for cash, of the
common stock purchase warrants dated July 26, 1993 and May 25, 1994 issued to
certain of the stockholders of the Parent, (b) redeem shares of the Parent's
Series C Redeemable Preferred Stock held by The Vermont Venture Capital Fund, L.
P. and North Atlantic Venture Fund, L. P. in three (3) installments of $150,000
each on January 31, 1997, July 31, 1997 and January 31, 1998 and (c) redeem
shares of the Parent's Series C Redeemable Preferred Stock from the proceeds of
an initial public offering of the Parent's stock so long as such initial public
offering occurs on or before December 31, 1997 and the net proceeds to the
Parent from such initial public offering (after payment of all fees and expenses
relating to such initial public offering and after redemption of all of the
Parent's Series C Redeemable Preferred Stock) equal or exceed $25,000,000;
provided that Parent may call 100,000 Stock Purchase Warrants to Subscribe for
and Purchase Class A Common Stock of Casella Waste Systems Inc., issued to
Springer Sanitation Service, Inc. at $7 per warrant, provided Parent has filed
its Form S-1 with the Securities and Exchange Commission on or before December
31, 1997 and provides to the Agent a Compliance Certificate, certified by the
CFO pursuant to ss.7.4(c) hereof, dated as of the date of the call which takes
into account such call. The Borrowers shall not effect or permit any change in
or amendment to the charter documents or by-laws of any Borrower or any document
or instrument pertaining to the terms of the Parent's capital stock.
51
ss.8.7. Employee Benefit Plans. None of the Borrowers nor any ERISA
Affiliate will:
(a) engage in any "prohibited transaction" within the meaning
of ss.406 of ERISA or ss.4975 of the Code which could result in a
material liability for any Borrower; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in ss.302 of
ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of any Borrower pursuant to ss.302(f) or ss.4068 of ERISA; or
(d) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of ss.4001 of ERISA) of
all Guaranteed Pension Plans exceeding the value of the aggregate
assets of such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of
benefit liabilities.
The Borrowers will (i) promptly upon filing the same with the
Department of Labor or Internal Revenue Service, furnish to the Banks a copy of
the most recent actuarial statement required to be submitted under ss.103(d) of
ERISA and Annual Report, Form 5500, with all required attachments, in respect of
each Guaranteed Pension Plan and (ii) promptly upon receipt or dispatch, furnish
to the Banks any notice, report or demand sent or received in respect of a
Guaranteed Pension Plan under ss.ss.302, 4041, 4042, 4043, 4063, 4065, 4066 and
4068 of ERISA, or in respect of a Multiemployer Plan, under ss.ss.4041A, 4202,
4219, or 4245 of ERISA.
ss.8.8. Capital Expenditures. As at the end of any fiscal quarter, the
Borrowers will not permit the amount of Capital Expenditures (excluding any
acquisitions permitted by ss.8.4 hereof) made by the Borrowers in the period of
four (4) consecutive fiscal quarters then ended to exceed an amount equal to 1.5
times the sum of depreciation and landfill amortization expense for such period.
ss.8.9. Subordinated Debt. None of the Borrowers will amend,
supplement, or otherwise modify the terms of the Subordinated Debt, the
Subordination Agreements, the Stockholder Stand-off Agreement or the Waste USA
Lease without the prior written consent of the Banks. None of the Borrowers will
prepay the Waste USA Lease, terminate the Waste USA Lease or exercise any option
of purchase the leasehold estate subject to the Waste USA Lease during the term
of this Credit Agreement without the prior written consent of the Banks. None of
the Borrowers will amend, supplement or otherwise modify the terms of the
Clinton Lease, prepay the Clinton Lease, terminate the Clinton Lease, or
exercise any option to purchase the landfill and related property subject to the
Clinton Lease during the term of this Agreement without the prior written
consent of the Banks. The Borrowers will not make any payments of the
52
Subordinated Debt other than scheduled payments of principal and interest
permitted under the Subordination Agreements; provided that Parent may make an
unscheduled principal payment not to exceed $500,000 on the Subordinated
Promissory Note dated July 9, 1996, to Seaward Realty Trust provided Parent has
filed its Form S-1 with the Securities and Exchange Commission on or before
December 31, 1997 and provides to the Agent a Compliance Certificate, certified
by the CFO pursuant to ss.7.4(c) hereof, dated as of the date of the unscheduled
principal payment which takes into account such unscheduled principal payment.
ss.9. FINANCIAL COVENANTS OF THE BORROWERS. The Borrowers agree that,
so long as any Loan or any Note is outstanding or the Banks have any obligation
to make Loans or the Agent has any obligation to issue, extend or renew any
Letters of Credit hereunder:
ss.9.1. Interest Coverage Ratios. As of the end of any fiscal quarter,
for the period of the four consecutive fiscal quarters then ended, the ratio of
EBITDA to Consolidated Total Interest Expense shall not be less than 3.5:1.
ss.9.2. Profitable Operations. The Borrowers will not permit
Consolidated Net Income to be less than $0 in any quarter.
ss.9.3. Debt-to-EBITDA. As at the end of any fiscal quarter, the ratio
of (a) Indebtedness of the Borrowers for borrowed money and capitalized leases
(excluding Indebtedness with respect to the Waste USA Lease) to (b) EBITDA
(minus interest, depreciation and amortization expense related to the Waste USA
Lease) for the period of four consecutive fiscal quarters ending on such date
(subject to the provisions below) shall not exceed the stated ratio for the
respective periods set forth below:
Period Ratio
------ -----
Closing Date through 4/30/98 4.00:1
5/1/98 through 4/30/99 3.75:1
Thereafter 3.50:1
For purposes of calculating the Debt to EBITDA ratio (a) for (i) the
fiscal quarter ending July 31, 1997, EBITDA shall be deemed equal to four (4)
times EBITDA for the three month period then ended, (ii) the fiscal quarter
ending October 31, 1997, EBITDA shall be deemed equal to two (2) times EBITDA
for the six month period then ended and (iii) the fiscal quarter ending January
31, 1998, EBITDA shall be deemed equal to one and one-third (1 1/3) times EBITDA
for the nine month period then ended and (b) the financial results of any
businesses acquired after May 1, 1997 by the Borrowers during such fiscal period
shall be included in the calculation of EBITDA so long as (i) the acquired
business had annual revenue of at least $5,000,000 for the most recent fiscal
year, (ii) the Agent is satisfied that the financial information for the
acquired business fairly presents the financial condition of such business and
(iii) the Agent receives a letter in form and substance satisfactory to the
Banks from the Borrowers' Accountants as to adjustments for non-recurring
expenses.
53
ss.9.4. Fixed Charge Coverage Ratio. As of the end of any fiscal
quarter, the Borrowers shall not permit the ratio of (a) EBITDA for the period
of four (4) consecutive fiscal quarters then ended to (b) Consolidated Fixed
Charges for such period to be less than 1.50 to 1.0.
ss.10. CLOSING CONDITIONS.
The obligations of the Banks to make the Loans and the Agent to issue
Letters of Credit on the Closing Date and otherwise be bound by the terms of
this Agreement shall be subject to the satisfaction of each of the following
conditions precedent:
ss.10.1. Corporate Action. All corporate action necessary for the valid
execution, delivery and performance by each Borrower of the Loan Documents shall
have been duly and effectively taken, and evidence thereof satisfactory to the
Agent shall have been provided to the Agent.
ss.10.2. Loan Documents, Etc. Each of the Loan Documents shall have
been duly and properly authorized, executed and delivered by the respective
parties thereto and shall be in full force and effect in a form satisfactory to
the Banks.
ss.10.3. Certified Copies of Charter Documents. The Agent shall have
received from the Borrowers a copy, certified by a duly authorized officer of
such Person to be true and complete on the Closing Date, of each of (a) its
charter or other incorporation documents (including certificates of merger and
name changes) as in effect on such date of certification, and (b) its by-laws as
in effect on such date.
ss.10.4. Incumbency Certificate. The Agent shall have received an
incumbency certificate, dated as of the Closing Date, signed by duly authorized
officers giving the name and bearing a specimen signature of each individual who
shall be authorized: (a) to sign the Loan Documents on behalf of the Borrowers;
(b) to make Loan and Letter of Credit Requests; and (c) to give notices and to
take other action on the Borrowers' behalf under the Loan Documents.
ss.10.5. Validity of Liens. The Security Documents shall be effective
to create in favor of the Agent a legal, valid and enforceable first security
interest in and lien upon the Collateral, subject only to Permitted Liens. All
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Agent to protect and preserve such security
interests, including, without limitation, delivery of the Mortgage for the
Superior Real Estate and any necessary amendments to the other Mortgages, shall
have been duly effected. The Agent shall have received evidence thereof in form
and substance satisfactory to the Agent.
ss.10.6 UCC Search Results. The Agent shall have received the results
of UCC searches with respect to the Collateral owned by the Borrowers indicating
no liens other than Permitted Liens and otherwise in form and substance
satisfactory to the Agent.
ss.10.7. Title Insurance. The Agent shall have received mortgagee
policies of title insurance or commitments to issue such policies or
satisfactory endorsements of existing
54
policies, in form and substance satisfactory to the Banks, together with proof
of payment of all fees and premiums for such policies or endorsements, from
title insurers and in amounts satisfactory to the Agent, insuring the interest
of the Agent as first mortgagee under the Mortgages and otherwise subject only
to Permitted Liens, together with endorsements thereto relating to any
amendments to the Mortgages.
ss.10.8. Certificates of Insurance. The Agent shall have received (i) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, or within 15 days prior thereto, identifying insurers, types of
insurance, insurance limits, and policy terms, and otherwise describing the
insurance obtained in accordance with the provisions of the Security Documents
and (ii) copies of all policies evidencing such insurance (or certificates
therefor signed by the insurer or an agent authorized to bind the insurer).
ss.10.9. Opinion of Counsel. The Banks shall have received
(a) from Miller, Eggleston & Cramer, Ltd., an opinion
addressed to the Banks, dated the Closing Date, in form and substance
satisfactory to the Banks, as to (i) authorization, enforceability of
Loan Documents and other corporate matters; (ii) Vermont security and
real estate matters.
(b) from Samaha & Vaughan, P.A., an opinion addressed to the
Banks, dated the Closing Date, in form and substance satisfactory to
the Banks, as to New Hampshire security and real estate matters.
(c) from Pierce Atwood, an opinion addressed to the Banks,
dated the Closing Date, in form and substance satisfactory to the
Banks, as to Maine security and real estate matters.
(d) from Ronald H. Sinzheimer, P.C., an opinion addressed to
the Banks, dated the Closing Date, in form and substance satisfactory
to the Banks, as to New York security and real estate matters.
ss.10.10. Payment of Fees. The Borrowers shall have paid to the Agent
for the accounts of the Bank or its own account, as applicable, all fees and
expenses that are due and payable as of the Closing Date in accordance with this
Agreement.
ss.10.11. Good Standing Certificates. The Agent shall have received
certificates from governmental officials evidencing the legal existence, good
standing and foreign qualifications of each Borrower.
ss.10.12. Affirmation of Subordination Agreements. The Agent shall have
received an opinion of Miller, Eggleston & Cramer, Ltd. that such a
reaffirmation of the Waste USA Subordination Agreement is not required to allow
the provisions of such agreement to remain in full force and effect.
55
ss.11. CONDITIONS OF ALL LOANS.
The obligations of the Banks to make any Loan (including without
limitation the obligation of the Agent to issue any Letter of Credit) on and
subsequent to the Closing Date is subject to the following conditions precedent:
ss.11.1. Representations True; No Event of Default. Each of the
representations and warranties of the Borrowers contained in this Agreement or
in any document or instrument delivered pursuant to or in connection with this
Agreement shall be true as of the date as of which they were made and shall also
be true at and as of the time of the making of the Loan with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Agreement and changes occurring
in the ordinary course of business which singly or in the aggregate are not
materially adverse, and to the extent that such representations and warranties
relate expressly to an earlier date) and no Default or Event of Default shall
have occurred and be continuing.
ss.11.2 Performance; No Event of Default. The Borrowers shall have
performed and complied with all terms and conditions herein required to be
performed or complied with by them prior to or at the time of any Loan, and at
the time of any Loan, there shall exist no Event of Default or condition which
would result in an Event of Default upon consummation of such Loan (including
without limitation any amounts to be drawn under a Letter of Credit). Each
request by the Borrowers for a Loan (including without limitation each request
for issuance of a Letter of Credit) subsequent to the first Loan shall
constitute certification by the Borrowers that the conditions specified in
ss.ss.10.1 and 10.2 will be duly satisfied on the date of such Loan or Letter of
Credit issuance.
ss.11.3. No Legal Impediment. No change shall have occurred in any law
or regulations thereunder or interpretations thereof which in the reasonable
opinion of the Banks would make it illegal for the Banks to make Loans
hereunder.
ss.11.4. Governmental Regulation. The Banks shall have received such
statements in substance and form reasonably satisfactory to the Banks as they
shall require for the purpose of compliance with any applicable regulations of
the Comptroller of the Currency or the Board of Governors of the Federal Reserve
System.
ss.11.5. Proceedings and Documents. All proceedings in connection with
the transactions contemplated by this Agreement and all documents incident
thereto shall have been delivered to the Banks as of the date hereof in
substance and in form satisfactory to the Banks, including without limitation a
Letter of Credit and Loan Request in the form attached hereto as Exhibit D, and
the Banks shall have received all information and such counterpart originals or
certified or other copies of such documents as the Banks may reasonably request.
ss.12. COLLATERAL SECURITY. The Obligations shall be secured by a
perfected security interest (having, with respect to each category of
Collateral, the respective rights and priorities set forth in the Security
Documents) in all of the assets of the Borrowers, whether now
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owned or hereafter acquired, pursuant to the terms of the Security Documents to
which the Borrowers are parties. It is the intention of the parties that all of
the Revolving Credit Loans (including any increase in the amount of the
Revolving Credit Loans pursuant to ss.2 hereof) be secured by the Mortgages,
whether or not the Mortgages, or any one of them, is amended in order to reflect
the full amount of and/or any increase in the amount of the Revolving Credit
Loans.
ss.13. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENT.
ss.13.1. Events of Default and Acceleration. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice and/or lapse of time, "Defaults")
shall occur:
(a) if the Borrowers shall fail to pay any principal of the
Loans when the same shall become due and payable, whether at the
Maturity Date or any accelerated date of maturity or at any other date
fixed for payment;
(b) if the Borrowers shall fail to pay any interest or fees or
other amounts owing hereunder within five (5) Business Days after the
same shall become due and payable whether at the Maturity Date or any
accelerated date of maturity or at any other date fixed for payment;
(c) if the Borrowers shall fail to comply with the covenants
contained in ss.ss.7 (other than ss.ss.7.6, 7.14, 7.15 and 7.18), 8 or
9 hereof;
(d) if the Borrowers shall fail to perform any term, covenant
or agreement contained herein or in any of the other Loan Documents
(other than those specified in subsections (a), (b), and (c) above)
within 30 days after written notice of such failure has been given to
the Borrowers by the Banks;
(e) if any representation or warranty contained in this
Agreement or in any document or instrument delivered pursuant to or in
connection with this Agreement shall prove to have been false in any
material respect upon the date when made or repeated;
(f) if any Borrower shall fail to pay at maturity, or within
any applicable period of grace, any and all obligations for borrowed
money or any guaranty with respect thereto in an aggregate amount
greater than $250,000, or fail to observe or perform any material term,
covenant or agreement contained in any agreement by which it is bound,
evidencing or securing borrowed money in an aggregate amount greater
than $250,000 for such period of time as would, or would have permitted
(assuming the giving of appropriate notice if required) the holder or
holders thereof or of any obligations issued thereunder to accelerate
the maturity thereof; or
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(g) if any Borrower makes an assignment for the benefit of
creditors, or admits in writing its inability to pay or generally fails
to pay its debts as they mature or become due, or petitions or applies
for the appointment of a trustee or other custodian, liquidator or
receiver of any Borrower or of any substantial part of the assets of
any Borrower or commences any case or other proceeding relating to any
Borrower under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or takes any action to
authorize or in furtherance of any of the foregoing, or if any such
petition or application is filed or any such case or other proceeding
is commenced against any Borrower and or any Borrower indicates its
approval thereof, consent thereto or acquiescence therein;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Borrower bankrupt
or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of
any Borrower in an involuntary case under federal bankruptcy laws as
now or hereafter constituted, and such decree or order remains in
effect for more than sixty (60) days, whether or not consecutive;
(i) if there shall remain in force, undischarged, unsatisfied
and unstayed, for more than thirty (30) days, whether or not
consecutive, any final judgment against any Borrower which, with other
outstanding final judgments, against the Borrowers exceeds in the
aggregate $250,000 after taking into account any undisputed insurance
coverage;
(j) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Banks shall have
determined in their reasonable discretion that such event reasonably
could be expected to result in liability of any Borrower to the PBGC or
the Plan in an aggregate amount exceeding $250,000 and such event in
the circumstances occurring reasonably could constitute grounds for the
termination of such Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer
such Plan; or a trustee shall have been appointed by the United States
District Court to administer such Plan; or the PBGC shall have
instituted proceedings to terminate such Plan;
(k) any of the Subordinated Debt shall be in default or all or
any part of the Subordinated Debt shall be paid, prepaid, redeemed or
repurchased in whole or in part other than as permitted under the terms
of the Subordination Agreements, hereof and thereof; or
(l) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded otherwise than in accordance with the
terms thereof or with the express prior written agreement, consent or
approval of the Banks, or any action at law, suit or in equity or other
legal proceeding to cancel, revoke or rescind any of the Loan Documents
shall be commenced by or on behalf of the Borrowers or any of their
respective stockholders, or any court or any other governmental or
regulatory authority or agency of
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competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more
of the Loan Documents is illegal, invalid or unenforceable in
accordance with the terms thereof;
(m) John Casella and James Bohlig shall cease to serve as
senior management of the Parent and shall fail to be replaced by other
Persons reasonably acceptable to the Banks within 30 days;
then, and in any such event, so long as the same may be continuing, the Agent
shall upon the request of the Required Banks, by notice in writing to the
Borrowers, declare all amounts owing with respect to this Agreement, the Notes
and the other Loan Documents and all Reimbursement Obligations to be, and they
shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrowers; provided that in the event of any
Event of Default specified in ss.13.1(g) or 13.1(h), all such amounts shall
become immediately due and payable automatically and without any requirement of
notice from the Agent or any Bank. Upon demand by the Banks after the occurrence
of any Event of Default, the Borrowers shall immediately provide to the Agent
cash in an amount equal to the aggregate Maximum Drawing Amount of all Letters
of Credit outstanding, to be held by the Agent as collateral security for the
Obligations.
ss.13.2. Termination of Commitments. If any Event of Default shall
occur, any unused portion of the Total Commitment hereunder shall forthwith
terminate and the Banks shall be relieved of all obligations to make Loans to or
issue Letters of Credit for the account of any of the Borrowers; or if on any
Drawdown Date the conditions precedent to the making of the Loans to be made on
such Drawdown Date or the issuance of any Letters of Credit to be issued on such
date are not satisfied (except as a consequence of a default on the part of the
Banks), the Banks may by notice to the Borrowers, terminate the unused portion
of the Total Commitment hereunder, and upon such Notice being given, such unused
portion of the Total Commitment hereunder shall terminate immediately and the
Banks shall be relieved of all further obligations to make Loans to or issue
Letters of Credit for the account of the Borrowers hereunder. No termination of
any portion of the Total Commitment hereunder shall relieve the Borrowers of any
of their existing Obligations to the Banks hereunder or elsewhere.
ss.13.3. Remedies. Subject to ss.15.8, in case any one or more of the
Events of Default shall have occurred and be continuing, and whether or not the
Banks shall have accelerated the maturity of the Loans pursuant to ss.13.1, each
Bank, if owed any amount with respect to the Loans or the Reimbursement
Obligations, may proceed to protect and enforce its rights by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations or the
Guaranteed Obligations to such Bank are evidenced, including, without
limitation, as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any legal or
equitable right of such Bank. No remedy herein conferred upon any Bank or the
Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to
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every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or any other provision of law.
ss.14. SETOFF. Regardless of the adequacy of any collateral, during the
continuance of an Event of Default, any deposits or other sums credited by or
due from any Bank to the Borrowers and any securities or other property of the
Borrowers in the possession of such Bank may be applied to or set off against
the payment of the Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrowers to the Banks. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrowers to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank or constituting Reimbursement Obligations owed to
such Bank, such amount shall be applied ratably to such other Indebtedness and
to the Indebtedness evidenced by all such Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, and (b) if such Bank
shall receive from the Borrowers, whether by voluntary payment, exercise of the
right of setoff, counterclaim, cross action, enforcement of the claim evidenced
by the Notes held by, or constituting Reimbursement Obligations owed to, such
Bank by proceedings against the Borrowers at law or in equity or by proof
thereof in bankruptcy, reorganization, liquidation, receivership or similar
proceedings, or otherwise, and shall retain and apply to the payment of the Note
or Notes held by, or Reimbursement Obligations owed to, such Bank any amount in
excess of its ratable portion of the payments received by all of the Banks with
respect to the Notes held by, and Reimbursement Obligations owed to, all of the
Banks, such Bank will make such disposition and arrangements with the other
Banks with respect to such excess, either by way of distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in each Bank
receiving in respect of the Notes held by it or Reimbursement Obligations owed
it, such Bank's proportionate payment as contemplated by this Agreement;
provided that if all or any part of such excess payment is thereafter recovered
from such Bank, such disposition and arrangements shall be rescinded and the
amount restored to the extent of such recovery, but without interest.
ss.15. THE AGENT.
ss.15.1 Appointment of Agent, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents. The Agent hereby acknowledges that it does not
have the authority to negotiate any agreement which would bind the Banks or
agree to any amendment, waiver or modification of any of the Loan Documents or
bind the Banks except as set forth in this Agreement or the Loan Documents.
Except as provided in this ss.15 and in the other Loan Documents, the Agent
shall take action or refrain from acting only upon instructions of the Banks and
no action taken or failure to act without the consent of the Banks shall be
binding on any Bank which has not consented. Each Bank irrevocably authorizes
the Agent to execute the Security Documents and all other instruments relating
thereto and to take such action on behalf of each of the Banks and to exercise
all such powers as are expressly delegated to the Agent hereunder and in the
Security Documents and all related documents, together with such other powers as
are reasonably incidental thereto. It is agreed that the duties, rights,
privileges and immunities of the Agent, in its capacity as issuer of Letters of
Credit hereunder, shall be identical to its duties, rights,
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privileges and immunities as Bank as provided in this ss.15. The Agent shall not
have any duties or responsibilities or any fiduciary relationship with any Bank
except those expressly set forth in this Agreement. Neither the Agent nor any of
its affiliates shall be responsible to the Banks for any recitals, statements,
representations or warranties made by the Borrowers or any other Person whether
contained herein or otherwise or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, the other Loan
Documents or any other document referred to or provided for herein or therein or
for any failure by the Borrowers or any other Person to perform its obligations
hereunder or thereunder or in respect of the Notes. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Neither the Agent nor any of its directors, officers, employees
or agents shall be responsible for any action taken or omitted to be taken by it
or them hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Bank in its separate capacity as a Bank
shall have the same rights and powers hereunder as any other Bank.
ss.15.2. Actions By Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement as it reasonably
deems appropriate unless it shall first have received such advice or concurrence
of the Banks and shall be indemnified to its reasonable satisfaction by the
Banks against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any of the Loan Documents in accordance with a request of the
Banks, and such request and any action taken or failure to act pursuant thereto
shall be binding upon the Banks and all future holders of the Notes or any
Letter of Credit Participation.
ss.15.3. Indemnification. Without limiting the obligations of the
Borrowers hereunder or under any other Loan Document, the Banks agree to
indemnify the Agent, ratably in accordance with their respective Commitment
Percentages, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements or any
kind or nature whatsoever which may at any time be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement or any other Loan Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or the enforcement of any of the terms hereof or thereof or of any such other
documents; provided, that no Bank shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
Agent (or any agent thereof).
ss.15.4. Reimbursement. Without limiting the provisions of ss.15.3, the
Banks and the Agent hereby agree that the Agent shall not be obliged to make
available to any Person any sum which the Agent is expecting to receive for the
account of that Person until the Agent has determined that it has received that
sum. The Agent may, however, disburse funds prior to determining that the sums
which the Agent expects to receive have been finally and unconditionally paid to
the Agent, if the Agent wishes to do so. If and to the extent that the Agent
does disburse funds and it later becomes apparent that the Agent did not then
receive a payment in an amount equal to the sum paid out, then any Person to
whom the Agent made the funds available shall, on demand from the Agent, refund
to the Agent the sum paid to that
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Person. If, in the opinion of the Agent, the distribution of any amount received
by it in such capacity hereunder or under the Loan Documents might involve it in
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
ss.15.5. Documents. The Agent will forward to each Bank, promptly after
the Agent's receipt thereof, a copy of each notice or other document furnished
to the Agent for such Bank hereunder; provided, however, that, notwithstanding
the foregoing, the Agent may furnish to the Banks a monthly summary with respect
to Letters of Credit issued hereunder in lieu of copies of the related Letter of
Credit Applications.
ss.15.6. Non-Reliance on Agent and Other Banks. Each Bank represents
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of the financial condition and affairs of the Borrowers and
decision to enter into this Agreement and the other Loan Documents and agrees
that it will, independently and without reliance upon the Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own appraisals and decisions in taking or not
taking action under this Agreement or any other Loan Document. The Agent shall
not be required to keep informed as to the performance or observance by the
Borrowers of this Agreement, the other Loan Documents or any other document
referred to or provided for herein or therein or by any other Person of any
other agreement or to make inquiry of, or to inspect the properties or books of,
any Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning any person which may come into the
possession of the Agent or any of its affiliates. Each Bank shall have access to
all documents relating to the Agent's performance of its duties hereunder at
such Bank's request. Unless any Bank shall promptly object to any action taken
by the Agent hereunder (other than actions to which the provisions of ss.15.8
are applicable and other than actions which constitute gross negligence or
willful misconduct by the Agent), such Bank shall conclusively be presumed to
have approved the same.
ss.15.7. Resignation of Agent. The Agent may resign at any time by
giving 60 days prior written notice thereof to the Banks and the Borrowers. Upon
any such resignation, the Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Banks and shall
have accepted such appointment within 30 days after the retiring Agent's giving
of notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a financial institution having a
combined capital and surplus in excess of $150,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the
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retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation, the provisions of this Agreement shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent. Any new Agent appointed pursuant to
this ss.15.7 shall immediately issue new Letters of Credit in place of Letters
of Credit previously issued by the Agent.
ss.15.8. Action by the Banks, Consents, Amendments, Waivers, Etc.
Except as otherwise expressly provided in this ss.15.8, any action to be taken
(including the giving of notice) may be taken or any consent or approval
required or permitted by the Agreement or any other Loan Document to be given by
the Banks may be given, and any term of this Agreement, any other Loan Document
or any other instrument, document or agreement related to this Agreement or the
other Loan Documents or mentioned therein may be amended and the performance or
observance by the Borrowers or any other person of any of the terms thereof and
any Default or Event of Default (as defined in any of the above-referenced
documents or instruments) may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the Required Banks; provided, however, that no such consent or
amendment which affects the rights, duties or liabilities of the Agent shall be
effective without the written consent of the Agent. Notwithstanding the
foregoing, no amendment, waiver or consent shall, do any of the following unless
in writing and signed by ALL of the Banks (a) increase the principal amount of
the Total Commitment (or subject the Banks to any additional obligations), (b)
reduce the principal of or interest on the Notes (including, without limitation,
interest on overdue amounts) or any fees payable hereunder, (c) postpone any
date fixed for any payment in respect of principal or interest (including,
without limitation, interest on overdue amounts) on the Notes, or any fees
payable hereunder; (d) change the definition of "Required Banks" or number of
Banks which shall be required for the Banks or any of them to take any action
under the Loan Documents; (e) amend this ss.15.8; (f) change the Commitment
Percentage of any Bank, except as permitted under ss.19 hereof; or (g) except as
otherwise permitted hereunder, release any Collateral.
ss.16. EXPENSES. Whether or not the transactions contemplated herein
shall be consummated, the Borrowers hereby promise to (a) reimburse Agent as
well as the Agent's affiliates for all reasonable out-of-pocket fees and
disbursements (including all reasonable attorneys' fees, collateral evaluation
costs and Consulting Engineer's fees), incurred or expended in connection with
the preparation, filing or recording, or interpretation of this Agreement, the
other Loan Documents, or any amendment, modification, approval, consent or
waiver hereof or thereof, or with the enforcement of any Obligations or the
satisfaction of any indebtedness of the Borrowers hereunder or thereunder, or in
connection with any litigation, proceeding or dispute hereunder in any way
related to the credit hereunder and (b) reimburse all reasonable out-of-pocket
fees and disbursements (including all reasonable attorneys' fees) incurred by
any Bank in connection with the enforcement of or preservation of rights under
any of the Loan Documents against the Borrowers or the administration thereof
after the occurrence of a Default or Event of Default and (ii) any litigation,
proceeding or dispute hereunder in any way related to the credit hereunder. The
Borrowers will pay any taxes (including any interest and penalties in respect
thereof) other than the Banks' federal and state income taxes, payable on or
with respect to the
63
transactions contemplated by this Agreement (the Borrowers hereby agreeing to
indemnify the Banks with respect thereto).
ss.17. INDEMNIFICATION. The Borrowers agree to indemnify and hold
harmless the Banks, as well as the Banks' shareholders, directors, agents,
officers, subsidiaries and affiliates, from and against all damages, losses,
settlement payments, obligations, liabilities, claims, suits, penalties,
assessments, citations, directives, demands, judgments, actions or causes of
action, whether statutory created or under the common law, and reasonable costs
and expenses incurred, suffered, sustained or required to be paid by an
indemnified party by reason of or resulting from the transactions contemplated
hereby, except any of the foregoing which result from the gross negligence or
willful misconduct of the indemnified party. In any investigation, proceeding or
litigation, or the preparation therefor, each Bank shall be entitled to select
its own counsel and, in addition to the foregoing indemnity, the Borrowers agree
to pay promptly the reasonable fees and expenses of such counsel. In the event
of the commencement of any such proceeding or litigation, the Borrowers shall be
entitled to participate in such proceeding or litigation with counsel of their
choice at their expense, provided that such counsel shall be reasonably
satisfactory to the Banks. The covenants of this ss.17 shall survive payment or
satisfaction of payment of amounts owing with respect to the Notes or any other
Loan Document.
ss.18. SURVIVAL OF COVENANTS, ETC. Unless otherwise stated herein, all
covenants, agreements, representations and warranties made herein, in the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrowers pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of the Loans and
the issuance, extension or renewal of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any amount
due under this Agreement, any Letter of Credit or the Notes remains outstanding
and unpaid or any Bank has any obligation to make any Loans or issue any Letters
of Credit hereunder. All statements contained in any certificate or other paper
delivered by or on behalf of the Borrowers pursuant hereto or in connection with
the transactions contemplated hereby shall constitute representations and
warranties by the Borrowers hereunder.
ss.19. SYNDICATION AND PARTICIPATION. It is understood and agreed that
each Bank shall have the right to assign at any time its portion of the Total
Commitment and interests in the risk relating to any Loans in an amount equal to
or greater than $5,000,000, to additional banks or other financial institutions
acceptable to Agent and Parent, which acceptances shall not be unreasonably
withheld, so long as (1) BankBoston will be the Agent hereunder, and that each
bank or other financial institution which executes and delivers to the Banks and
the Borrowers hereunder a counterpart joinder in form and substance satisfactory
to the Banks and such bank or financial institution shall, on the date specified
in such counterpart joinder, become a party to this Agreement and the other Loan
Documents for all purposes of this Agreement and the other Loan Documents, and
its Commitment shall be as set forth in such counterpart joinder. Upon the
execution and delivery of such counterpart joinder, (a) the Borrowers shall
issue to the bank or other financial institution Notes in the amount of such
bank's or other financial institution's Commitment dated the Closing Date or
such other date as may be specified by the Agent and
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otherwise completed in substantially the form of the Notes executed and
delivered on the Closing Date; (b) the Agent shall distribute to the Borrowers,
the Banks and such bank or financial institution a schedule reflecting such
changes; (c) this Agreement shall be appropriately amended to reflect (i) the
status of such bank or financial institution as a party hereto and (ii) the
status and rights of the Banks and Agent hereunder; (d) the Borrowers shall take
such action as the Agent may reasonably request to perfect any security
interests or mortgages in favor of the Banks, including any bank or financial
institution which becomes a party to this Agreement; and (e) the assignee bank
or financial institution shall pay a processing and recordation fee of $2,500 to
the Agent. Each Bank shall also have the right to grant participations to one or
more banks or other financial institutions in or to all or any part of any Loans
owing to such Bank and the Note held by such Bank. The documents evidencing any
such participation may provide that, except with the consent of the bank or
financial institution that is a party thereto, such Bank will not consent to (a)
the reduction in or forgiveness of the stated principal of or rate of interest
on or Commitment Fee with respect to the portion of any Loan subject to such
participation or assignment, (b) the extension or postponement of any stated
date fixed for payment of principal or interest or Commitment Fee with respect
to the portion of any Loan subject to such participation or assignment, or (c)
the waiver or reduction of any right to indemnification of such Bank hereunder,
or (d) except as otherwise permitted hereunder, the release of any Collateral;
provided that such participating Bank shall not have more rights then those set
forth in this sentence. Notwithstanding the foregoing, no syndication,
assignment or participation shall operate to increase the Total Commitment or
the amount of the Term Loans hereunder or reduce the sum of (a) the Commitment
of any Bank plus (b) the principal amount of such Bank's Term Loans to be an
amount less than $5,000,000 or otherwise alter the substantive terms of this
Agreement.
ss.20. PARTIES IN INTEREST. All the terms of this Agreement and the
other Loan Documents shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto and
thereto; provided, that no Borrower shall assign or transfer its rights
hereunder without the prior written consent of the Banks.
ss.21. NOTICES, ETC. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the other Loan Documents shall be in writing and
shall be delivered in hand, mailed by United States first-class mail, postage
prepaid, or sent by telegraph, telex or telecopier and confirmed by letter,
addressed as follows:
(a) if to the Borrowers, at 25 Greens Hill Lane, P.O. Box 866,
Rutland, Vermont 05701, Attention: President, telecopy number
802-775-6198;
(b) if to the Agent or BankBoston, at 100 Federal Street,
Boston, Massachusetts 02110, USA, Attention: Arthur J. Oberheim, Vice
President, telecopy number 617-434-2160;
or such other address for notice as shall have last been furnished in writing to
the Person giving the notice.
65
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (a) if delivered by hand to a responsible
officer of the party to which it is directed, at the time of the receipt thereof
by such officer, (b) if sent by registered or certified first-class mail,
postage prepaid, five Business Days after the posting thereof, and (c) if sent
by telex or cable, at the time of the dispatch thereof, if in normal business
hours in the country of receipt, or otherwise at the opening of business on the
following Business Day.
ss.22. MISCELLANEOUS. The rights and remedies herein expressed are
cumulative and not exclusive of any other rights which the Banks or Agent would
otherwise have. The captions in this Agreement are for convenience of reference
only and shall not define or limit the provisions hereof. This Agreement and any
amendment hereof may be executed in several counterparts and by each party on a
separate counterpart, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one instrument. In proving
this Agreement it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom enforcement is sought.
ss.23. ENTIRE AGREEMENT, ETC. The Loan Documents and any other
documents executed in connection herewith or therewith express the entire
understanding of the parties with respect to the transactions contemplated
hereby. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except as provided in ss.14.8. No waiver shall extend
to or affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or omission on the part of the Agent or any Bank
in exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrowers shall entitle the
Borrowers to other or further notice or demand in similar or other
circumstances.
ss.24. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS HEREBY WAIVES ITS
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH BORROWER
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION
REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. THE BORROWERS (a) CERTIFY THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OR
ANY BANK OF THE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR
THE AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS AND (b) ACKNOWLEDGE THAT THE AGENT AND THE BANKS HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY
BECAUSE OF, AMONG
66
OTHER THINGS, THE BORROWERS' WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
ss.25. GOVERNING LAW. THIS AGREEMENT AND, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWERS
CONSENT TO THE JURISDICTION OF ANY OF THE FEDERAL OR STATE COURTS LOCATED IN THE
COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH ANY SUIT TO ENFORCE THE RIGHTS
OF ANY BANK OR THE AGENT UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS.
ss.26. SEVERABILITY. The provisions of this Agreement are severable and
if any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
ss.27. TRANSITIONAL ARRANGEMENTS.
ss.27.1. Prior Credit Agreement Superseded. This Agreement shall amend
and supersede and replace the Prior Credit Agreement in its entirety, except as
provided in this ss.27. On the Closing Date, the rights and obligations of the
parties under the Prior Credit Agreement and the "Notes" as defined therein
shall be subsumed within and be governed by this Agreement and the Notes issued
hereunder. All "Revolving Credit Loans" or "Letters of Credit", (as defined in
the Prior Credit Agreement) outstanding under the Prior Credit Agreement on the
Closing Date shall become Revolving Credit Loans or Letters of Credit hereunder,
as the case may be, and "Term Loan (I)" and "Term Loan (II)" (as defined in the
Prior Credit Agreement) outstanding under the Prior Credit Agreement on the
Closing Date shall become the Series A Term Loan hereunder. The Banks' interest
in such Loans and participation in such Letters of Credit will be reallocated on
the Closing Date in accordance with each Bank's applicable Commitment Percentage
and Series A Term Loan Percentage.
ss.27.2. Interest and Fees Under Prior Credit Agreement. All interest
and all commitment, facility and other fees and expenses owing or accruing under
or in respect of the Prior Credit Agreement shall be calculated as of the
Closing Date (prorated in the case of any fractional periods), and shall be paid
on the Closing Date in accordance with the terms of the Prior Credit Agreement.
ss.28. PARI PASSU TREATMENT. Notwithstanding anything to the contrary
set forth herein, each payment or prepayment of principal and interest received
after the occurrence of an Event of Default hereunder shall be distributed pari
passu among the Banks, in accordance with
67
the aggregate outstanding principal amount of the Obligations owing to each Bank
divided by the aggregate outstanding principal amount of all Obligations.
68
IN WITNESS WHEREOF, the undersigned have duly executed this Amended and
Restated Revolving Credit and Term Loan Agreement under seal as of the date
first set forth above.
BANKBOSTON, N.A.,
individually and as Agent
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
KEYBANK NATIONAL ASSOCIATION
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
USTRUST
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
[SIGNATURES CONTINUED ON NEXT PAGE]
69
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
BHF-BANK AKTIENGESELLSCHAFT
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
COMERICA BANK
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
[SIGNATURES CONTINUED ON NEXT PAGE]
70
CASELLA WASTE SYSTEMS, INC.
NEW ENGLAND WASTE
SERVICES OF VERMONT, INC.
NEWBURY WASTE
MANAGEMENT, INC.
NEW ENGLAND WASTE
SERVICES OF N.Y., INC.
CASELLA WASTE MANAGEMENT
OF N.Y., INC.
CASELLA WASTE MANAGEMENT
OF PENNSYLVANIA, INC.
By: ______________________________________________
Name: John W. Casella
Title: President of each of the
companies listed above
[SIGNATURES CONTINUED ON NEXT PAGE]
71
CASELLA WASTE MANAGEMENT,
INC.
NEW ENGLAND WASTE
SERVICES, INC.
BRISTOL WASTE MANAGEMENT,
INC.
SUNDERLAND WASTE
MANAGEMENT, INC.
NORTH COUNTRY
ENVIRONMENTAL SERVICES,
INC.
SAWYER ENVIRONMENTAL
RECOVERY FACILITIES, INC.
SAWYER ENVIRONMENTAL
SERVICES
CASELLA T.I.R.E.S., INC.
HIRAM HOLLOW REGENERATION CORP.
By: _____________________________________________
Name: John W. Casella
Title: Vice President/Secretary of
each of the companies listed
above
72
SCHEDULE 1
SUBSIDIARIES OF CASELLA WASTE SYSTEMS, INC.
Parent: Casella Waste Systems, Inc.,
a Delaware corporation
25 Greens Hill Lane
Rutland, Vermont 05701
Subsidiaries: Casella Waste Management, Inc.,
a Vermont corporation
25 Greens Hill Lane
Rutland, Vermont 05701
New England Waste Services, Inc.,
a Vermont corporation
25 Greens Hill Lane
Rutland, Vermont 05701
New England Waste Services of Vermont, Inc.,
a Vermont corporation
25 Greens Hill Lane
Rutland, Vermont 05701
North Country Environmental Services, Inc.,
a Virginia corporation
501 South Street, Box E, Suite 302
Bow, New Hampshire 03304
Newbury Waste Management, Inc.,
a Vermont corporation
25 Greens Hill Lane
Rutland, Vermont 05701
Bristol Waste Management, Inc.,
a Vermont corporation
25 Greens Hill Lane
Rutland, Vermont 05701
Sunderland Waste Management, Inc.,
a Vermont corporation
25 Greens Hill Lane
Rutland, Vermont 05701
73
Sawyer Environmental Recovery Facilities, Inc.,
a Maine Corporation
358 Emerson Mill Road
Hampden, Maine 04444
Sawyer Environmental Services,
a Maine corporation
358 Emerson Mill Road
Hampden, Maine 04444
Casella T.I.R.E.S., Inc.,
a Maine corporation
25 Greens Hill Lane
Rutland, Vermont 05701
New England Waste Services of N.Y., Inc.,
a New York corporation
Route 9, Saratoga Road
Fort Edward, New York 12828
Casella Waste Management of N.Y., Inc.,
a New York corporation
Route 9, Saratoga Road
Fort Edward, New York 12828
Casella Waste Management of Pennsylvania, Inc.,
a Pennsylvania corporation
25 Greens Hill Lane
Rutland, Vermont 05701
Hiram Hollow Regeneration Corp.,
a New York corporation
100 Washburn Road
Gansevoort, New York 12831
74
SCHEDULE 2
Banks' Commitment Percentages
BankBoston 24.2105%
KeyBank 21.0526%
USTrust 13.6842%
Bank of America 15.7895%
Comerica Bank 12.6316%
BHF-Bank Aktiengsellschaft 12.6316%
----------
100.0000%
Exhibits
Exhibit A -- Form of Revolving Credit Note
Exhibit B -- Form of Loan and Letter of Credit Request
Exhibit C -- Form of Term Note
Exhibit D -- Form of Compliance Certificate
Exhibit E -- Form of Environmental Compliance Certificate
Schedules
Schedule 1 - Subsidiaries of the Parent which are Borrowers
Schedule 2 - Banks' Commitment Percentages
Schedule 6.3 - Real Property
Schedule 6.7 - Litigation
Schedule 6.11 - Defaults
Schedule 6.13 - Financing Statements
Schedule 6.16 - Environmental Compliance
Schedule 6.18 - Certain Transactions
Schedule 6.19 - Subsidiaries of the Parent
Schedule 6.20(b) - Options, Etc.
Schedule 6.23 - Depository Accounts
Schedule 7.7 - Insurance
Schedule 8.1(c) - Existing Debt
Schedule 8.2(g) - Existing Liens
Schedule 8.2(k) - Bristol Waste Management Liens
Schedule 8.3(g) - Existing Investments
Schedule 27 - Outstanding Amounts on Closing Date
Exhibit 11.1
Casella Waste Systems, Inc. and Subsidiaries
Computation of Pro Forma Weighted Average Shares Outstanding
For the Three
For the Year Months Ended
Ended April 30, July 31,
1997 1997
--------------- -------------
Weighted average shares of Class A
Common Stock outstanding 2,321,176 2,858,141
Weighted average shares of Class B
Common Stock outstanding 1,000,000 1,000,000
Weighted average shares of Series A Redeemable Preferred
Stock with warrants exercisable outstanding (1) 516,620 516,620
Weighted average shares of Series B Redeemable Preferred
Stock with warrants exercisable outstanding (1) 1,294,579 1,294,579
Weighted average shares of Series D Convertible Redeemable
Preferred Stock outstanding (1) 1,922,169 1,922,169
Dilutive effect of common and common equivalent
shares issued subsequent to August 7, 1996 computed
in accordance with the treasury stock method (1) 353,588 151,650
--------- ---------
Pro forma weighted average number of common and
common equivalent shares outstanding 7,408,132 7,743,159
========= =========
(1) Pursuant to SEC Staff Accounting Bulletin No 83, common and preferred stock,
and stock options issued at prices below an assumed initial public offering
price of $____ per share during the twelve month period immediately
preceding the initial filing date of the Company's Registration Statement
for its initial public offering have been included as outstanding for all
periods presented. The dilutive effect of the common and common share
equivalents was computed in accordance with the treasury stock method.
Exhibit 21
List of Subsidiaries
--------------------
Name Jurisdiction of Incorporation
- ---- -----------------------------
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
September 24, 1997
