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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 12, 1997
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COMPOST AMERICA HOLDING COMPANY, INC.
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(Exact name of registrant as specified in its charter)
New Jersey 0-27832 22-2603175
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
320 Grand Avenue Englewood, New Jersey 07631
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 541-9393
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N/A
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(Former name or former address, if changed since last report.)
PLEASE ADDRESS ALL CORRESPONDENCE TO: Mark Gasarch, Esq.
1285 Avenue of the Americas
3rd Floor
New York, New York 10019
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ITEM 5. OTHER EVENTS
1. On November 25, 1997, the Company appointed Christopher Smith to its Board
of Directors.
2. On December 12, 1997, the Company restated its By-Laws (Exhibit 3.2).
3. On December 12, 1997, the Company amended its Certificate of Incorporation
to restate its Series A Preferred Stock Designation of Rights (Exhibit 4.1)
and to restate its Series C Preferred Stock Designation of Rights (Exhibit
4.2).
4. On December 12, 1997 certain principal stockholders of the Company amended
their November 3, 1997 stockholders' agreement (Exhibit 9.1) and confirmed
certain other amendments to documents previously executed on November 3,
1997 (Exhibit 99.1).
5. Certain documents executed November 3, 1997 as part of the Company's
acquisition of all of the outstanding shares of R. J. Longo Construction
Co., Inc. not previously filed are filed herewith. These include a
registration rights agreement for Wasteco Ventures Limited (Exhibit 4.3)
and an Optional Participation Agreement for Robert J. Longo (Exhibit 99.2).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) and (b) - not applicable
(c) Exhibits
3.2 - Restated By-Laws
4.1 - Series A Preferred Stock Designation of Rights
4.2 - Series C Preferred Stock Designation of Rights
4.3 - Wasteco Registration Rights Agreement
9.1 - First Amendment to Stockholders Agreement
99.1 - Amendatory Agreement
99.2 - Longo Optional Participation Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 24, 1997
COMPOST AMERICA HOLDING COMPANY, INC.
(Registrant)
By /s/ Roger E. Tuttle
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Roger E. Tuttle, President
(Principal Executive Officer)
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Exhibit 3.2
AMENDED AND RESTATED BY-LAWS
OF
COMPOST AMERICA HOLDING COMPANY, INC.
dated December 12, 1997
ARTICLE I.
Offices.
SECTION 1. Registered Office. The registered office of Compost
America Holding Company, Inc. (hereinafter referred to as the "Corporation")
shall be maintained at such locations within the State of New Jersey as the
Board of Directors shall from time to time designate. The Corporation shall
maintain in and in charge of such registered office an agent upon whom
process against the Corporation may be served.
SECTION 2. Other Offices. The Corporation may also have an office
or offices at such other place or places, either within or without the State
of New Jersey, as the Board of Directors may from time to time determine or
the business of the Corporation may require.
ARTICLE II.
Meetings of Shareholders.
SECTION 1. Annual Meetings. The annual meeting of the shareholders
of the Corporation for the election of directors and for the transaction of
such other business as may properly come before the meeting shall be held in
October of each year on such date and at such time as the Board of Directors
may fix prior to the notice of the meeting. If the election for directors
shall not be held on the day designated herein for any annual meeting or at
any adjournment of such meeting, the directors shall cause the election to be
held at a special meeting, the directors shall cause the election to be held
at a special meeting as soon thereafter as may be convenient. At such
special meeting, the shareholders may elect the directors and transact other
business with the same force and effect as an annual meeting duly called and
held.
SECTION 2. Special Meetings. A special meeting of the shareholders
for any purpose or purposes, unless otherwise prescribed by statute, may be
called at any time and shall be called by the President or Secretary upon
direction of the Board of Directors upon the written request of a shareholder
or shareholders holding of record at least ten percent (10%) of the
outstanding shares of the Corporation entitled to vote at such meeting.
SECTION 3. Place of Meetings. All meetings of the shareholders of
the Corporation shall be held at the registered office of the Corporation or
at such other place, within or without the State of New Jersey, as shall be
designated by the Board of Directors and stated in the notice of the meeting.
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SECTION 4. Notice of Meetings. Except as otherwise provided by
law, notice of each meeting of the shareholders, whether annual, special, or
adjourned, shall be given not less than ten (10) days nor more than sixty
(60) days before the day on which the meeting is to be held to each
shareholder of record entitled to vote at such meeting by delivering a
written or printed notice thereof to him personally, or by mailing such
notice in a postage prepaid envelope addressed to him at his post office
address furnished by him to the Secretary of the Corporation for such
purpose, or, if he shall not have furnished to the Secretary of the
Corporation his address for such purpose, then at his post office address
last known to the Secretary of the Corporation. Except where expressly
required by law, no publication of any notice of a meeting of shareholders
shall be required. Notice of any meeting of shareholders shall not be
required to be given to any shareholder who shall attend such meeting in
person or by proxy; and if any shareholder shall, in person or by proxy, in
writing, waive notice of any meeting, whether before or after such meeting
shall be held, notice thereof need not be given to him. Notice of any
adjourned meeting of the shareholders shall not be required to be given,
except where expressly required by law.
SECTION 5. Quorum. At each meeting of shareholders, the presence
in person or by proxy of shareholders holding of record a majority of the
outstanding shares entitled to vote at such meeting shall be necessary and
sufficient to constitute a quorum for the transaction of business. In the
absence of a quorum, the shareholders entitled to vote who are present in
person or by proxy at the time and place of any meeting, or, if no
shareholder entitled to vote is so present in person or by proxy, any officer
entitled to preside at or act as secretary of such meeting, may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present. At any such adjourned meeting at
which a quorum may be present, any business may be transacted which might
have been transacted at the meeting as originally called.
SECTION 6. Organization. At every meeting of the shareholders, the
President, or, in his absence, a Vice-President, or, in the absence of the
President and the Vice-President, a chairman chosen by majority in interest
of the shareholders present in person or by proxy and entitled to vote
thereat, shall act as chairman. The Secretary, or, in his absence, an
Assistant Secretary, shall act as secretary at all meetings of the
shareholders. In the absence from any such meeting of the Secretary of an
Assistant Secretary, the chairman may appoint any person to act as secretary
of the meeting.
SECTION 7. Business and Order of Business. At each meeting of the
shareholders, such business may be transacted as may be brought before such
meeting, whether or not such business is stated in the notice of such meeting
or in a waiver of notice thereof, except as otherwise required by law or
expressly provided herein or in a certain Stockholders Agreement dated
November 3, 1997, as amended, to which the Corporation is a party. The order
of business at all meetings of the shareholders shall be as determined by
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the Chairman, subject to the approval of a majority in interest of the
shareholders present in person or by proxy at such meeting and entitled to
vote thereat.
SECTION 8. Voting. At each meeting of shareholders, each
shareholder shall be entitled to one vote in person or by proxy for each
share of the Corporation having voting rights registered in his name on the
books of the Corporation at the close of business on such date preceding the
day on which the notice of the meeting was given as the Board of Directors
shall by resolution determine, or, if no notice was given, on the day next
preceding the day on which the meeting is held, except where, pursuant to the
provisions of Section 7 of Article VI of these By-Laws, a date shall have
been fixed as a record date for the determination of the shareholders
entitled to vote.
Any shareholder entitled to vote may vote in person or by proxy in
writing; provided, however, that no proxy shall be valid after eleven (11)
months after the date of the execution thereof, unless otherwise provided
therein. The presence at any meeting of any shareholder who has given a
proxy shall not revoke such proxy unless the shareholder shall file written
notice of such revocation with the secretary of the meeting prior to the
voting of such proxy.
At each meeting of shareholders, all matters other than those the
manner of deciding of which is expressly regulated by statute or by the
Certificate of Incorporation or these By-Laws, shall be decided by a majority
of the votes cast by the holders of shares entitled to vote thereon.
The Board of Directors, in advance of any meeting of the
shareholders, or the chairman of the meeting, at such meeting, may appoint
one or more inspectors of election to act at the meeting or any adjournment
thereof, but no inspectors need be appointed unless expressly requested at
the meeting by a shareholder entitled to vote thereat.
SECTION 9. List of Shareholders. The Secretary, or such other
officer of the Corporation who shall have charge of the stock transfer books
of the Corporation, shall make and certify, prior to any meeting of the
shareholders or any adjournment thereof, a full, true, and complete list, in
alphabetical order, of all the shareholders entitled to vote thereat and the
post office address of and the number of shares held by each. Such list
shall be produced at the time and place of the meeting and shall be subject
to the inspection of any shareholder during the whole time of the meeting.
SECTION 10. Action by Shareholders Without a Meeting. Any action
required or permitted to be taken at a meeting of shareholders by any
provisions of the New Jersey Business Corporation Act or the Certificate of
Incorporation or these By-Laws may be taken without a meeting if all the
shareholders entitled to vote thereon consent in writing to such action being
taken, or subject to the provisions of Section 14A:5-6(2) of the New Jersey
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Business Corporation Act, if shareholders who would have been entitled to
cast the minimum number of votes which would be necessary to authorize such
action at a meeting at which all shareholders entitled to vote thereon were
present and voting shall consent in writing to such action being taken.
Whenever corporate action is so taken, the consents of the shareholders
consenting thereto shall be filed with the minutes of proceedings of the
shareholders of the Corporation.
SECTION 11. Director Action Preceding Shareholder Action. Prior to
taking any action described below the shareholders shall obtain a resolution
of the Board of Directors recommending shareholder action to be taken with
respect to each of the following: (i) any significant project, construction
or engagement commenced after November 3, 1997, (ii) any merger,
consolidation, or divestiture, (iii) any sale, lease, transfer, exchange or
other disposition of substantial assets, (iv) any material financial
arrangement or indebtedness, (v) any purchase, lease, exchange or other
acquisition of substantial assets, (vi) any increase or reduction of, or
change in, the Corporation's authorized capital stock, or the creation of any
additional class of capital stock of the Corporation, (vii) any amendment to
the Certificate of Incorporation or Bylaws of the Corporation, (viii) the
dissolution, liquidation, reorganization or application for receivership of
the Corporation, (ix) any significant change in the conduct of the business
of the Corporation, (x) any increase or decrease in the size of the Board or
Directors from nine (9) directors, and (xi) any such other substantial
corporate change as determined by the Board of Directors.
ARTICLE III.
Board of Directors.
SECTION 1. General Powers. The property, affairs, and business of
the Corporation shall he managed by the Board of Directors.
SECTION 2. Number, Qualifications, and Term of Office. The number
of directors which shall constitute the whole Board of Directors shall be
nine (9). The directors shall be elected annually at the annual meeting of
the shareholders, and each director shall hold office until his successor
shall have been elected and qualified or until his death, or until he shall
have resigned in the manner provided in Section 12 of this Article III or
shall have been removed in the manner provided in Section 13 of this Article
III, whichever shall first occur. Any director elected to fill a vacancy in
the Board of Directors shall be deemed elected for the unexpired portion of
the term of his predecessor on the Board of Directors. Each director, at the
time of his election, shall be at least eighteen (18) years of age, but need
not be a shareholder of the Corporation.
SECTION 3. Election of Directors. At each meeting of the
shareholders for the election of directors, the directors shall be chosen by
a plurality of the votes cast at such
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election by the holders of shares entitled to vote thereon. At all elections
of directors, including elections to fill vacancies in the Board of
Directors, each shareholder entitled to vote shall have the right to vote the
number of shares held by him for as many persons as there are directors to be
elected and for whose election he has a right to vote. The vote for
directors need not be by ballot unless demanded by a shareholder entitled to
vote thereon at the election and before the voting begins.
SECTION 4. Annual Meetings. The annual meeting of the Board of
Directors shall be held in each year immediately after the annual meeting of
shareholders, at such place as the Board of Directors may fix from time to
time, and if so held, no notice of such meeting need be given.
SECTION 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held not less than once each calendar quarter at such time
as the Board of Directors shall by resolution determine. If any day fixed
for a regular meeting shall be a legal holiday at the place where the meeting
is to be held, then the meeting which would otherwise be held on that day
shall be held at said place at the same hour on the next succeeding business
day not a legal holiday. Notice of regular meetings need not be given.
SECTION 6. Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by the President or any two (2)
directors. Notice of each such meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, at least five
(5) days before the day on which the meeting is to be held, or shall be sent
to him at such place by telegraph, cable, telex, facsimile, or the
equivalent, or be delivered personally or by telephone, not later than the
day preceding the day on which the meeting is to be held, except that in the
event of an emergency, the President may direct that shorter notice of a
special meeting be given personally or by telephone or telegraph, cable,
telex, cable, facsimile, or the equivalent. Neither the business to be
transacted at nor the purpose of the meeting need be specified in the notice.
Notice of any meeting of the Board of Directors need not be given to any
director, however, if waived by him in writing or by telegraph, telex, cable,
facsimile, or the equivalent, whether before or after such meeting be held,
or if he shall be present at the meeting; and any meeting of the Board of
Directors shall be a legal meeting without any notice thereof having been
given, if all the directors shall be present thereat.
SECTION 7. Place of Meeting. Any meetings of the Board of
Directors may be held in such manner and at such place or places within or
without the State of New Jersey as the Board of Directors may from time to
time designate.
SECTION 8. Quorum and Manner of Acting. A majority of the
directors shall be required to constitute a quorum for the transaction of
business at any meeting. The act of a majority of the directors present at
any meeting while a quorum is present shall be
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the act of the Board of Directors. In the absence of a quorum, a majority of
the directors present may adjourn any meeting from time to time until a
quorum be had. Notice of any adjourned meeting shall be given in the same
manner as notice of special meetings are required to be given as herein set
forth. The directors shall act only as a board and the individual directors
shall have no power as such.
SECTION 9. Action by Written Consent. Any action required or
permitted to be taken pursuant to authorization voted at a meeting of the
Board of Directors or any committee thereof may be taken without a meeting
if, prior or subsequent to such action, all members of the Board of Directors
or of such committee, as the case may be, consent thereto in writing and such
written consents are filed with the minutes of the proceedings of the Board
of Directors or committee. Such consent shall have the same effect as a
unanimous vote of the Board of Directors or committee for all purposes and
may be stated as such in any certificate or other document filed with the
Secretary of State.
SECTION 10. Organization. At each meeting of the Board of
Directors, the Chairman of the Board (who shall be elected for a 1 year term
by the directors at the annual meeting of the Board) or, in his absence, the
President, shall act as chairman. The Secretary, in his absence, an
Assistant Secretary, or, in the absence of the Secretary and the Assistant
Secretaries, any person appointed by the Chairman, shall act as secretary of
the meeting.
SECTION 11. Order of Business. At all meetings of the Board of
Directors, business may be transacted in such order as the Board of
Directors may from time to time determine.
Section 12. Resignations. Any director of the Corporation may
resign at any time by giving written notice to the President or to the
Secretary of the Corporation. The resignation of any director shall take
effect at the time specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 13. Removal of Directors. Any director may be removed at
any time, either with or without cause, by the shareholders at any regular or
special meeting; and the vacancy in the Board of Directors caused by any such
removal may be filled by the shareholders at the same meeting.
SECTION 14. Vacancies. Any vacancy in the Board of Directors,
whether caused by death, resignation, removal, disqualification, an increase
in the number of directors, or any other cause, shall be filled by the
shareholders only; and each director so elected shall hold office for a term
to expire at the next annual meeting of the shareholders and until his
successor shall have been elected and qualified. In case all the directors
shall
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die or resign or be removed or disqualified, any shareholder may call a
special meeting of the shareholders, upon notice given as herein provided for
special meetings of shareholders, at which directors for the unexpired term
may be elected by the shareholders.
SECTION 15. Compensation. The directors shall receive such
compensation for their services as directors and such allowance for
travelling expenses for attendance at meetings of the Board of Directors, as
may be determined by the Board of Directors. The foregoing shall not be
construed as prohibiting the payment to any person who is a director of
compensation for services rendered to the Corporation in any capacity.
SECTION 16. Board Committees. (a) The Board of Directors shall not
act through an Executive Committee or other committees except as provided
herein. (b) The Board of Directors shall appoint a Compensation Committee of
four (4) directors, not more than one (1) of whom shall be an employee of the
Corporation or any affiliate of the Corporation, up to two (2) of whom shall
be directors designated by Wasteco Ventures Limited, and one (1) of whom
shall be a director acceptable to Wasteco Ventures Limited and Robert J.
Longo. Prior to consideration by the Board, the Committee shall consider all
issues relating to compensation, loans and other benefits of senior employees
and all issues concerning employee benefit plans. The Board shall not act
with respect to the issuance of securities of the Corporation or any
subsidiary to employees of the Corporation or other persons or entities in
respect of services to the Corporation or any subsidiary unless recommended
by a majority vote of the Compensation Committee. (c) The Board of
Directors shall appoint an Audit Committee of three (3) directors, not more
than one of whom shall be an employee of the Corporation or any affiliate.
The Audit Committee shall annually recommend to the Board an independent
auditing firm who shall be employed by the Corporation to audit its financial
statements. The Board shall not employ independent accountants with respect
to any year unless recommended by a majority of the members of the Audit
Committee for such year.
SECTION 17. Indemnification of Directors and Officers. The
Corporation shall indemnify each corporate agent, as such term is defined in
Section 14A:3-5 of the New Jersey Business Corporation Act, as heretofore or
hereafter amended, to the fullest extent permitted thereby.
SECTION 18. Loans to Officers or Employees. The Board of
Directors may lend money to, or guarantee any obligation of, or otherwise
assist, any officer or other employee of the Corporation, or of any
subsidiary, whether or not such officer or employee is also a director of the
Corporation, whenever, in the judgment of the directors, such loan,
guarantee, or assistance may reasonably be expected to benefit the
Corporation. Any such loan, guarantee, or other assistance may be made with
or without interest and may be unsecured or secured in such manner as the
Board of Directors shall approve, including, but
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not limited to, a pledge of shares of the Corporation and may be made upon
such other terms and conditions as the Board of Directors may determine.
ARTICLE IV.
Officers.
SECTION 1. Number. The officers of the Corporation shall be a
President, one or more Vice-Presidents, a Treasurer, and a Secretary, and one
or more Assistant Treasurers and Assistant Secretaries, and such other
officers as may be elected or appointed by the Board of Directors in
accordance with the provisions of Section 3 of this Article IV.
SECTION 2. Election, Qualifications, and Terms of Office. The
officers shall be elected annually by the Board of Directors. Each officer,
except such officers as may be appointed in accordance with the provisions of
Section 3 of this Article IV, shall hold office until his successor shall
have been elected and qualified, or until his earlier death, resignation, or
removal in the manner herein provided. Any person may hold more than one
office.
SECTION 3. Subordinate Officers. The Board of Directors from time
to time may elect such other officers and appoint such agents and employees
as it may deem necessary or proper. Such officers, agents, and employees
shall hold office for such period, have such authority, and perform such
duties as are provided in these By-Laws or as the Board of Directors may from
time to time prescribe.
SECTION 4. Resignations. Any officer may resign at any time by
giving written notice of such resignation to the Board of Directors, the
President, or the Secretary of the Corporation. Unless otherwise specified
in such written notice, such resignation shall take effect upon receipt
thereof by the Board of Directors or any such officer.
SECTION 5. Removal. Any officer may be removed, either with or
without cause, by the Board of Directors.
SECTION 6. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or any other cause shall be filled
for the unexpired portion of the term by the Board of Directors.
SECTION 7. The President. The President shall be the chief
executive officer of the Corporation. Subject to the direction of the Board
of Directors, he shall have general charge of the business affairs and
property of the Corporation and general supervision over its officers and
agents. If present, he shall preside at all meetings of shareholders and, in
the absence of the Chairman of the Board, at all meetings of the Board
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of Directors, and he shall see that all orders and resolutions of the Board
of Directors are carried into effect. He may sign, with any other officer
thereunto authorized, certificates of stock of the Corporation the issuance
of which shall have been duly authorized, and may sign and execute, in the
name of the Corporation, deeds, mortgages, bonds, contracts, agreements, and
other instruments duly authorized by the Board of Directors, except in cases
where the signing and execution thereof shall be expressly delegated by the
Board of Directors to some other officer or agent. From time to time, he
shall report to the Board of Directors all matters within his knowledge which
the interests of the Corporation may require to be brought to their
attention. He shall also perform such other duties as are given to him by
these By-Laws or as from time to time may be assigned to him by the Board of
Directors.
SECTION 8. The Vice-Presidents. The Board may, but need not, elect
one or more Vice Presidents. At the request of the President, any
Vice-President shall perform all the duties of the President and, when so
acting, shall have all the powers of and be subject to all restrictions upon
the President. Any Vice-President may also sign, with any other officer
thereunto duly authorized, certificates of stock of the Corporation, the
issuance of which shall have been duly authorized, and may sign and execute
in the name of the Corporation, deeds, mortgages, bonds, contracts,
agreements, and other instruments duly authorized by the Board of Directors,
except in cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors to some other officer or agent. Each
Vice-President shall perform such other duties as are given to him by these
By-Laws or as from time to time may be assigned to him by the Board of
Directors or the President.
SECTION 9. The Secretary. The Secretary shall:
(a) record all the proceedings of the meetings of the shareholders
and Board of Directors in a book or books to be kept for that
purpose;
(b) cause all notices to be duly given in accordance with the
provisions of these By-Laws and as required by statute;
(c) be custodian of the records and of the seal of the Corporation,
and cause such seal to be affixed to all certificates representing
stock of the corporation prior to the issuance thereof and to all
instruments the execution of which on behalf of the Corporation under
its seal shall have been duly authorized;
(d) see that the lists, books, reports, statements, certificates, and
other documents and records required by statute are properly kept and
filed;
(e) have charge of the stock and transfer books of the Corporation
and cause such stock and transfer books to be kept in such manner as
to show at
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any time the amount of stock of the Corporation issued and
outstanding, the names and addresses of the holders of record thereof,
the number of shares held by each, and the date when each became such
holder of record;
(f) perform the duties required of him under Section 9 of Article II
of these By-Laws;
(g) sign (unless the Treasurer, an Assistant Treasurer, or Assistant
Secretary shall sign) certificates representing stock of the
Corporation, the issuance of which shall have been duly authorized;
and
(h) in general, perform all duties incident to the office of
Secretary and such other duties as are given to him by these By-Laws
or as from time to time may be assigned to him by the Board of
Directors or the President.
SECTION 10. The Assistant Secretaries. One or more Assistant
Secretaries may, but need not, be designated to act by the Board of
Directors. At the request of the Secretary, or in his absence or disability,
the President, the Assistant Secretaries shall perform all the duties of the
Secretary, and, when so acting, shall have all the powers of and be subject
to all restrictions upon the Secretary. Each Assistant Secretary shall
perform such other duties as from time to time may be assigned to him by the
Board of Directors, the President, or the Secretary.
SECTION 11. The Treasurer. The Treasurer shall:
(a) have charge of and supervision over and be responsible for the
funds, securities, receipts, and disbursements of the Corporation;
(b) cause the moneys and other valuable effects of the Corporation to
be deposited in the name and to the credit of the Corporation in such
banks or trust companies, or with such bankers or other depositaries,
as shall be selected in accordance with Section 3 of Article V of
these By-Laws or to be otherwise dealt with in such manner as the
Board of Directors may direct;
(c) cause the funds of the Corporation to be disbursed by checks or
drafts upon the authorized depositaries of the Corporation, and cause
to be taken and preserved proper vouchers for all moneys disbursed;
(d) render to the Board of Directors or the President, whenever
requested, a statement of the financial condition of the Corporation
and of all his transactions as Treasurer;
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(e) cause to be kept, at the principal office of the Corporation or
at such other office (within or without the State of New Jersey) as
shall be designated by the Board of Directors, correct books of
account of all its business and transactions;
(f) sign (unless the Secretary, an Assistant Secretary, or an
Assistant Treasurer shall sign) certificates representing stock of the
Corporation the issuance of which shall have been duly authorized; and
(g) in general, perform all duties incident to the office of
Treasurer and such other duties as are given to him by these By-Laws
or as from time to time may be assigned to him by the Board of
Directors or the President.
SECTION 12. The Assistant Treasurers. One or more Assistant
Treasurers may, but need not, be designated to act by the Board of Directors.
At the request of the Treasurer, or in his absence or disability, the
President, the Assistant Treasurers shall perform all the duties of the
Treasurer, and, when so acting, shall have all the powers of and be subject
to all restrictions upon the Treasurer. Each Assistant Treasurer shall
perform such other duties as from time to time may be assigned to him by the
Board of Directors, the President or the Treasurer.
SECTION 13. Salaries. The salaries of the officers of the
Corporation shall be fixed from time to time by the Board of Directors. No
officer shall be prevented from receiving such salary by reason of the fact
that he is also a director of the Corporation.
SECTION 14. Surety Bonds. In case the Board of Directors shall so
require, any officer or agent of the Corporation shall execute to the
Corporation a bond, in such sum and with such surety or sureties as the Board
of Directors may direct, conditioned upon the faithful discharge of his
duties.
ARTICLE V.
Contracts, Checks, Drafts, Bank Accounts, etc.
SECTION 1. Contracts, etc.; How Executed. The President or any
Vice-President, subject to the approval of the Board of Directors, may enter
into any contract or execute and deliver any instrument in the name and on
behalf of the Corporation, and such authorization may be general or confined
to specific instances.
SECTION 2. Checks, Drafts, etc. All checks, drafts, or other
orders for the payment of money and all notes or other evidences of
indebtedness issued in the name of the
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Corporation shall be signed by such officer or officers or agent or agents of
the Corporation as shall be thereunto so authorized from time to time by
resolution of the Board of Directors.
SECTION 3. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to its credit in such banks or
trust companies or with such bankers or other depositaries as the Board of
Directors may select or as may be selected by any officer or officers or
agent or agents authorized so to do by the Board of Directors. Endorsements
for deposit to the credit of the Corporation in any of its duly authorized
depositaries shall be made in such manner as the Board of Directors from time
to time may determine.
SECTION 4. General and Special Bank Accounts. The Board of
Directors may authorize from time to time the opening and keeping of general
and special bank accounts with such banks, trust companies, or other
depositaries as it may designate and may make such special rules and
regulations with respect thereto, not inconsistent with the provisions of
these By-Laws, as it may deem expedient.
SECTION 5. Loans. No loans or advances shall be contracted on
behalf of the Corporation and no negotiable paper shall be issued in its
name, unless and except as authorized by the Board of Directors. Such
authorization may be general or confined to specific instances. Any officer
or agent of the Corporation thereunto so authorized may effect loans and
advances for the Corporation and for such loans and advances may make,
execute, and deliver promissory notes, bonds, or other evidences of
indebtedness of the Corporation. Any officer or agent of the Corporation
thereunto so authorized may pledge, hypothecate, or transfer, as security for
the payment of any and all loans, advances, indebtedness, and liabilities of
the Corporation, any and all stocks, bonds, other securities, and other
personal property at any time held by the Corporation, and to that end may
endorse, assign, and deliver the same and do every act and thing necessary or
proper in connection therewith.
SECTION 6. Proxies. Proxies to vote with respect to shares of
stock of other corporations owned by or standing in the name of the
Corporation may be executed and delivered from time to time on behalf of the
Corporation by such person or persons as shall be thereunto authorized from
time to time by the Board of Directors.
ARTICLE VI.
Shares and Their Transfer.
SECTION 1. Stock Certificates. Every holder of shares of the
Corporation shall be entitled to have a certificate, signed by the President
or a Vice-President and either the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, certifying
<PAGE>
13
the class and number of shares owned by him in the Corporation. In case any
officer of the Corporation who has signed any such certificate shall cease to
be such officer, for whatever cause, before the certificate shall have been
delivered by the Corporation, the certificate shall be deemed to have been
adopted by the Corporation unless the Board of Directors shall otherwise
determine prior to the issuance and delivery thereof, and may be issued and
delivered as though the person who signed it had not ceased to be such
officer of the Corporation. Certificates representing shares of stock of the
Corporation shall be in such form as shall be approved by the Board of
Directors. There shall be entered upon the stock books of the Corporation at
the time of issuance of each share the number of the certificate issued, the
name and address of the person owning the share represented thereby, the
claim and number of such shares, and the date of issuance thereof. Every
certificate exchanged or returned to the Corporation shall be marked
"canceled," with the date of cancellation.
SECTION 2. Stock Record Books. The stock record books and the
blank stock certificate books shall be kept by the Secretary of the
Corporation or by any officer or agent designated by the Board of Directors.
SECTION 3. Addresses of Shareholders. Each shareholder shall
designate to the Secretary of the Corporation an address at which notices of
meetings and all other corporate notices may be served, delivered, or mailed
to him, and if any shareholder shall fail to designate such address, all
corporate notices (whether served or delivered by the Secretary, another
shareholder, or any other person) may be served upon him by mail directed to
him at his last known post office address.
SECTION 4. Transfers of Shares. Transfers of shares of the
Corporation shall be made on the books of the Corporation by the holder of
record thereof or by his attorney thereunto duly authorized by a power of
attorney duly executed in writing and filed with the Secretary of the
Corporation and on surrender of the certificate or certificates representing
such shares. The Corporation shall be entitled to treat the holder of record
of any share or shares as the absolute owner thereof for all purposes and
accordingly shall not be bound to recognize any legal, equitable, or other
claim to or interest in such share or shares on the part of any other person,
whether or not it or they shall have express or other notice thereof, except
as otherwise expressly provided by statute; provided, however, that whenever
any transfer of shares shall be made for collateral security and not
absolutely and written notice thereof shall be given to the Secretary of the
Corporation, such fact shall be expressed in the entry of the transfer.
Notwithstanding anything to the contrary contained in these By-Laws, the
Corporation shall not be required or permitted to make any transfer of shares
of the Corporation which violate the terms and provisions of any agreement
restricting the transfer of shares of the Corporation to which the
Corporation shall be a party; provided, that the restriction upon the
transfer of the shares represented by any stock certificate shall be set
forth or referred to upon the certificate.
<PAGE>
14
SECTION 5. Regulations. Subject to the provisions of this Article
VI, the Board of Directors may make such rules and regulations as it may deem
expedient concerning the issuance, transfer, and registration of certificates
for shares of the Corporation.
SECTION 6. Lost, Destroyed, and Mutilated Certificates. The holder
of any shares shall immediately notify the Corporation of any loss,
destruction, or mutilation of the certificate therefor, and the Board of
Directors, in its discretion, may cause to be issued to him a new certificate
or certificates of stock upon surrender of the mutilated certificate or, in
case of loss or destruction of the certificate, upon satisfactory proof of
such loss or destruction, and the Board of Directors, in its discretion, may
require the owner of the lost or destroyed certificate or his legal
representative to give the Corporation a bond, in such sum (not exceeding
double the value of such shares) and with such surety or sureties as it may
direct, to indemnity the Corporation against any claim that may be made
against it on account of the alleged loss or destruction of any such
certificate.
SECTION 7. Fixing of Record Dates. The Board of Directors shall
have the power to fix in advance a date, not more than sixty (60) nor less
than ten (10) days preceding the date of any meeting of shareholders, or the
date for the payment of any dividend or allotment of any right, or the date
when any change, conversion, or exchange of shares shall go into effect, or
for the purpose of any other action, as a record date for the determination
of the shareholders entitled to notice of and to vote at any such meeting, or
entitled to receive payment of any such dividend or allotment of any right,
or to exercise the rights in respect to any such change, conversion, or
exchange of shares, or to participate in or be entitled to the benefit of any
such other action, and in such case only shareholders of record on the record
date so fixed shall be entitled to such notice of and to vote at such
meeting, or to receive payment of any such dividend or allotment of any
right, or to exercise such rights in respect to any such change, conversion,
or exchange of shares, or to participate in or be entitled to the benefit of
any such other action.
ARTICLE VII.
Dividends, Surplus, etc.
Subject to any restrictions imposed by statute, the Board of
Directors from time to time, in its discretion, may fix and vary the amount
of the working capital of the Corporation and determine what, if any,
dividends shall be declared and paid to shareholders out of the surplus of
the Corporation. The Board of Directors, in its discretion, may use and
apply any of such surplus in purchasing or acquiring any of the shares of the
Corporation in accordance with law or any of its bonds, debentures, or other
obligations, or from time to time may set aside from such surplus such sum or
sums as it in its absolute discretion, may deem proper as a reserve fund to
meet contingencies or for equalizing dividends, or for the
<PAGE>
15
purpose of maintaining or increasing the property or business of the
Corporation, or for any other purposes it may deem conducive to the best
interest of the Corporation. All such surplus, until actually declared in
dividends or used and applied as aforesaid, shall be deemed to be so set
aside by the Board of Directors for one or more of said purposes.
ARTICLE VIII.
Corporate Seal.
The Corporation shall have a corporate seal which shall be in
circular form, shall bear the name of the Corporation and the words and
figures denoting its organization under the laws of the State of New Jersey
and the year thereof, and otherwise shall be in such form as shall be
approved from time to time by the Board of Directors.
ARTICLE IX.
Fiscal Year.
The fiscal year of the Corporation shall be from May 1 of one year
through April 30 of the following year.
ARTICLE X.
Accountants.
The Board of Directors of the Corporation shall designate from time
to time the independent accountants of the Corporation in accordance with
Section 16(c).
ARTICLE XI.
Amendments.
All By-Laws of the Corporation shall be subject to amendment,
alteration, or repeal, and new By-Laws not inconsistent with any provision of
the Certificate of Incorporation of the Corporation or any provision of law
may be made, by the shareholders but not by the Board of Directors, except as
otherwise expressly required by statute. Any By-Law adopted, amended, or
repealed by the shareholders may not be amended or repealed by the Board,
unless the resolution of the shareholders adopting such By-Law expressly
reserves the right to amend or repeal it to the shareholders.
<PAGE>
16
ARTICLE XII.
Force and Effect.
These By-Laws are subject to the provisions of the New Jersey
Business Corporation Act, the Certificate of Incorporation, and to the
fullest extent permitted by law a certain Stockholder Agreement dated
November 3, 1997, as amended, to which the Corporation is a party. If any
provision in these By-Laws is inconsistent with an express provision of such
Act, the Certificate of Incorporation, or the Stockholder Agreement, the
provision of such Act, the Certificate of Incorporation or the Stockholder
Agreement shall govern to the extent of such inconsistency.
<PAGE>
Exhibit 4.1
FEDERAL EMPLOYER IDENTIFICATION NO. 22-2603175
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION
OF
COMPOST AMERICA HOLDING COMPANY, INC.
Pursuant to the provision of Section 14A:7-2, of the New Jersey
Business Corporation Act, the undersigned corporation executes the following
Certificate of Amendment to Certificate of Incorporation:
1. The name of the corporation is:
Compost America Holding Company, Inc.
2. The following amendment to the Certificate of Incorporation
was approved by the directors of the corporation on the 12th
day of December, 1997:
The Certificate of Amendment to the Certificate of Incorporation of
Compost America Holding Company, Inc. relating to the Certificate of
Designations of Rights and Preferences of Series A Exchange Redeemable
Preferred Stock, filed on November 6, 1997 (the "Series A Certificate"), is
hereby amended as follows:
A. Paragraph 2(a) of the Certificate of Designations of Rights
and Preferences of Series A Exchangeable Redeemable Preferred Stock
(the "Series A Designation"), attached as Exhibit "A" to the Series A
Certificate, is amended by replacing the period at the end of the
first sentence thereof with the following:
", provided, however, that for the period ending December
31, 1997 dividends shall be payable at a rate which gives
the holders of such stock a dividend equal to an 8% return
from November 3, 1997 to December 31, 1997."
B. Paragraph 3 (a)(i) of the Series A Designation shall be
amended by replacing the phrase "(other than the Series C Preferred
Stock outstanding on November 3, 1997)" with the phrase "(other than
the 91,000 shares of Series C Preferred Stock outstanding on the date
of the filing of this Certificate of Amendment)";
C. Paragraph 4(a) of the Series A Designation shall be amended
by replacing the phrase "(other than the Series C Preferred Stock
outstanding on November 3, 1997)" with the phrase "(other than the
91,000 shares of Series C
<PAGE>
Preferred Stock outstanding on the date of the filing of this
Certificate of Amendment)";
The Series A Certificate is hereby further amended as follows:
A. The first page of the Series A Certificate is amended by
replacing the first three lines of the unnumbered paragraph immediately
preceding paragraph 1 with the following:
"Pursuant to the provisions of Section 14A:7-2(2)
of the New Jersey Business Corporation Act, the
undersigned corporation executes the following
Certificate of Amendment to the Certificate of
Corporation relating to a Certificate of
Designations of Rights and Preferences of Series A
Exchangeable Redeemable Preferred Stock filed on
November 6, 1997."
B. Paragraph 2 of the first page of the Series A
Certificate is amended by deleting the phrase "and thereafter
duly adopted by the shareholders."
C. A new paragraph 3 is added on the first page of the
Series A Certificate immediately following paragraph 2 and
preceding the resolution, as follows:
The Certificate of Incorporation is amended
so that the designation and number of shares
of each class and series acted upon in the
resolution, and the relative rights,
preferences and limitations of each such
class and series are as stated in the
resolution.
D. A new paragraph 4 is added to the first page of the
Series A Certificate immediately after new paragraph 3 and
preceding the resolution as follows:
<PAGE>
The resolution referred to in Paragraph 3 is
the resolution of the Board setting forth its
actions and stating the designation and
number of shares, and the relative rights,
preferences and limitations of the shares of
Series A Exchangeable Redeemable Preferred
Stock thereby created is set forth below.
This Certificate of Incorporation is amended so that the designation
and number of shares of each class and series acted upon in the resolution,
and the relative rights, preferences and limitations of each such class and
series, are as stated in the resolution.
The resolution referred to in the immediately preceding paragraph was
adopted by the Board of Directors on December 12, 1997 and is the resolution of
the Board setting forth the actions and stating the designation and number of
shares, and the relative rights, preferences and limitations of the shares of
Series A Preferred Stock and is set forth below:
RESOLVED, that the Certificate of Amendment and the Certificate
of Designations of Rights and Preferences of Series A Exchangeable
Redeemable Preferred Stock filed on November 6, 1997 is confirmed in
all respects and is incorporated herein by reference , subject,
however, to the amendments set forth in the Certificate of Amendment
dated December 12, 1997, and the Board authorizes the filing with the
Secretary of State of the State of New Jersey of such Certificate of
Amendment.
Dated this 12th day of December, 1997
COMPOST AMERICA HOLDING COMPANY, INC.
BY: _______________________________________
Roger E. Tuttle, President
<PAGE>
Exhibit 4.2
FEDERAL EMPLOYER IDENTIFICATION NO. 22-2603175
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION
OF
COMPOST AMERICA HOLDING COMPANY, INC.
Pursuant to the provision of Section 14A:7-2, Corporations, General,
of the New Jersey Statutes, the undersigned corporation executes the following
Certificate of Amendment to Certificate of Incorporation:
1. The name of the corporation is:
Compost America Holding Company, Inc.
2. The following amendment to the Certificate of
Incorporation was approved by the directors of the
corporation on the 12th day of December, 1997:
The Certificate of Amendment to the Certificate of Incorporation of
Compost America Holding Company, Inc. relating to the Certificate of
Designations of Rights and Preferences of Series C Redeemable Convertible
Preferred Stock, filed on November 6, 1997 (the "Series C Certificate"), is
hereby amended as follows:
A. Subparagraph 2(b) of the Certificate of Designations of Rights
and Preferences of Series C Redeemable Convertible Preferred Stock (the
Series C Designation"), attached as Exhibit "A" to the Series C
Certificate, is amended by replacing the period at the end of the first
sentence thereof with the following:
", provided, however, that for the period ending December
31, 1997 dividends shall be payable at a rate which gives the
holders of such stock a dividend equal to a 20% return from
November 3, 1997 to December 31, 1997.
B. Subparagraph 3 (a)(i) of the Series C Designation shall be
amended by replacing the phrase "(other than the Series A Preferred Stock
outstanding on November 3, 1997)" with the phrase "(other than the 169,000
shares of Series A Preferred Stock outstanding on the date of the filing of
this Certificate of Amendment)."
C. Subparagraph 4(a) of the Series C Designation shall be amended by
replacing the phrase "(other than the Series A Preferred Stock outstanding
on November 3, 1997)" with the phrase "(other than the 169,000 shares of
Series A
<PAGE>
Preferred Stock outstanding on the date of the filing of this
Certificate of Amendment)";
The Series C Certificate is hereby further amended as follows:
A. The first page of the Series C Certificate is amended by
replacing the first three lines of the unnumbered paragraph
immediately preceding paragraph 1 with the following:
"Pursuant to the provisions of Section 14A:7-2(2)
of the New Jersey Business Corporation Act, the
undersigned corporation executes the following
Certificate of Amendment to the Certificate of
Incorporation relating to a Certificate of
Designations of Rights and Preferences of Series C
Exchangeable Redeemable Preferred Stock filed on
November 6, 1997."
B. Paragraph 2 of the first page of the Series C
Certificate is amended by deleting the phrase "and thereafter
duly adopted by the shareholders."
C. A new paragraph 3 is added to the first page of the
Series C Certificate immediately following paragraph 2 and
preceding the resolution, as follows:
The Certificate of Incorporation is amended
so that the designation and number of shares
of each class and series acted upon in the
resolution, and the relative rights,
preferences and limitations of each such
class and series are as stated in the
resolution.
D. A new paragraph 4 is added to the first page of the
Series C Certificate after new paragraph 3 and preceding the
resolution as follows:
The resolution referred to in Paragraph 3 is
the resolution of the Board setting forth its
actions and stating the designation and
number of shares, and the relative rights,
preferences and limitations of the shares of
Series C Exchangeable Redeemable Preferred
Stock thereby created is set forth below.
<PAGE>
This Certificate of Incorporation is amended so that the designation
and number of shares of each class and series acted upon in the resolution, and
the relative rights, preferences and limitations of each such class and series,
are as stated in the resolution.
The resolution referred to in the immediately preceding paragraph was
adopted by the Board of Directors on December 12, 1997 and is the resolution of
the Board setting forth the actions and stating the designation and number of
shares, and the relative rights, preferences and limitations of the shares of
Series A Preferred Stock and is set forth below:
RESOLVED, that the Certificate of Designations of Rights and
Preferences of Series C Redeemable Convertible Preferred Stock filed
on November 6, 1997 is confirmed in all respects and is incorporated
herein by reference , subject, however, to the amendments set forth
in the Certificate of Amendment dated December 12, 1997 and the Board
authorizes the filing with the Secretary of State of the State of New
Jersey of such Certificate of Amendment.
Dated this 12th day of December, 1997
COMPOST AMERICA HOLDING COMPANY, INC.
BY: _________________________________
Roger E. Tuttle, President
<PAGE>
Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
dated as of
November 3, 1997
between
COMPOST AMERICA HOLDING COMPANY, INC.
and
WASTECO VENTURES LIMITED
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.........................................................1
1.1 Definitions..........................................................1
ARTICLE 2 REGISTRATION RIGHTS.................................................4
2.1 Securities Subject to this Agreement.................................4
2.2 Demand Registration..................................................4
2.3 Piggyback Registration...............................................6
2.4 Registration Procedures..............................................8
2.5 Preparation: Reasonable Investigation...............................11
2.6 Certain Rights of Holders...........................................12
2.7 Registration Expenses...............................................12
2.8 Indemnification; Contribution.......................................12
2.9 Participation in Underwritten Registrations.........................15
2.10 Selection of Underwriters...........................................15
ARTICLE 3 RULE 144...........................................................15
3.1 Rule 144 Reporting..................................................15
ARTICLE 4 MISCELLANEOUS......................................................16
4.1 Entire Agreement....................................................16
4.2 Successors and Assigns..............................................16
4.3 Notices.............................................................16
4.4 Headings............................................................17
4.5 Counterparts........................................................17
4.6 Applicable Law......................................................17
4.7 Specific Enforcement................................................18
4.8 Amendment and Waivers...............................................18
<PAGE>
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of November 3, 1997 (the
"Agreement"), between COMPOST AMERICA HOLDING COMPANY, INC., a New Jersey
corporation (the "Company"), and WASTECO VENTURES LIMITED, a corporation
organized under the laws of the British Virgin Islands (the "Holder").
RECITALS
WHEREAS, the Company has agreed to sell to the Holder, and the Holder has
agreed to purchase from the Company, shares of Series A Preferred Stock (as
defined herein); Series C Preferred Stock (as defined herein) and shares of
Common Stock (as defined herein) of the Company, upon the terms and subject
to the conditions set forth in that certain Stock Purchase Agreement, dated
as of the date hereof (the "Stock Purchase Agreement"), by and between the
Company and Wasteco Ventures Limited;
WHEREAS, it is a condition precedent to the obligations of the Holder
under the Stock Purchase Agreement that the Company grant certain
registration rights in respect of the Restricted Securities (as defined
herein); and
WHEREAS, the Company and the Holder desire to evidence such registration
rights by entering into this Agreement.
AGREEMENT
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. The following terms, as used herein, have the following
meanings.
"Board" means the Board of Directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other day on
which banks in New York are authorized by law to close.
"Closing Date" means the date on which the completion of the transactions
specified in the Stock Purchase Agreement relating to the purchase and sale
of Series A Preferred Stock and Series C Preferred Stock as contemplated by
Section 2.01 thereof shall occur.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, no par value, of the Company.
"Company Registration Statement" means the Registration Statement of the
Company
1
<PAGE>
relating to the registration for sale of shares of the Company's Common Stock
contemplated by Section 2.3, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.
"Effective Time" means the date of effectiveness of any Registration
Statement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means an individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Series A Preferred Stock" means the Series A Preferred Stock, no par
value, of the Company.
"Series C Preferred Stock" means the Series C Preferred Stock, no par
value, of the Company.
"Prospectus" means the prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
The term "register" means to register under the Securities Act and
applicable state securities laws for the purpose of effecting a public sale
of securities.
"Registration Statement" means the Company Registration Statement and/or
the Shelf Registration Statement.
"Restricted Securities" means any Securities until (i) a registration
statement covering such Securities has been declared effective by the
Commission and such Securities have been disposed of pursuant to such
effective registration statement, (ii) such Securities are sold under
circumstances in which all the applicable conditions of Rule 144 (or any
similar provisions then in force) under the Securities Act are met, or such
Securities may be sold pursuant to Rule 144(k) (or any similar provision then
in force) under the Securities Act, and are freely tradable after such sale
by the transferee, (iii) such Securities are otherwise transferred, the
Company has delivered a new certificate or other evidence of ownership for
such Securities not bearing a legend restricting further transfer and such
Securities may be resold without registration under the Securities Act, or
(iv) such Securities shall have ceased to be outstanding.
"Securities" means the shares of Common Stock issuable by the Company to
the Holder at the Closing Date and upon conversion of the Series C Preferred
Stock.
"Securities Act" means the Securities Act of 1933, as amended.
2
<PAGE>
"Shelf Registration Statement" means the Registration Statement of the
Company relating to the shelf registration for resale of Restricted
Securities contemplated by Section 2.2 herein, including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
"Stock Purchase Agreement" has the meaning given to it in the recitals to
this Agreement.
As used in this Agreement, words in the singular include the plural, and
in the plural include the singular.
3
<PAGE>
ARTICLE 2
REGISTRATION RIGHTS
2.1 Securities Subject to this Agreement.
(a) The Securities entitled to the benefits of this Agreement are the
Restricted Securities, but only for so long as they remain Restricted
Securities.
(b) A Person is deemed to be a holder of Restricted Securities (each, a
"Holder") whenever such Person is the registered holder of such Restricted
Securities on the books and records of the Company or its transfer agent.
2.2 Demand Registration.
(a) Subject to the limitations set forth in this Agreement, at any time
after the date which is 90 days after the Closing Date, the Holder may
request the Company to register under the Securities Act, all or any portion
(but not less than $2.0 million of the Holder's Restricted Securities) of its
Restricted Securities for sale on terms and conditions comparable to those
normally applicable to offerings of equity securities in similar
circumstances as determined by the Company on Form S-3 or such other form as
the Company deems appropriate; provided, however, that the request for
registration must be for a Shelf Registration Statement pursuant to Rule 415
under the Securities Act. The Company shall be obligated to register
Restricted Securities pursuant to this Section 2.2(a) on two occasions only,
provided, however, that such registrations shall be counted only if (A) the
corresponding Registration Statements have become effective under the
Securities Act, and (B) the public offerings have been consummated on the
terms and conditions specified therein or if not consummated, such failure
was not attributable to an action taken by the Company. The Company shall be
entitled to include in any Shelf Registration Statement filed pursuant to
this Section 2.2(a) securities of the Company held by any other shareholder
of the Company and, in an underwritten public offering, Common Stock of the
Company to be sold by the Company for its own account so long as the
inclusion of such additional securities will not result in a decrease of the
amount of Restricted Securities to be registered pursuant to this Section
2.2(a).
(b) In connection with the Shelf Registration Statement, the Company
shall comply with all the provisions of Section 2.4 below and shall use its
reasonable efforts to effect such registration to permit the sale of the
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof (as indicated in the information furnished to
the Company pursuant to Section 2.2(c)). Subject to Section 2.2(d), the
Company shall use its best efforts to keep each such Shelf Registration
Statement continuously effective, supplemented and amended as required by the
provisions of Section 2.2(d) to the extent necessary to ensure that it is
available for resales of Restricted Securities by the Holder, and to ensure
that it conforms with the requirements of this Agreement, the Securities Act
and the policies, rules and regulations of the Commission as announced from
time to time, for a period of 18 months from the Effective Time or such
longer period as required by Section 2.2(d) or such shorter period that will
terminate when all the securities covered by the Shelf Registration Statement
have been sold pursuant to the Shelf
4
<PAGE>
Registration Statement or otherwise cease to be Restricted Securities (the
"Effective Period"). Upon the occurrence of any event that would cause any
Shelf Registration Statement or the Prospectus contained therein (i) to
contain a material misstatement or omission or (ii) not to be effective and
usable for sale or resale of Restricted Securities during the period required
by this Agreement, the Company shall file promptly an appropriate amendment
to such Shelf Registration Statement or the related Prospectus or any
document incorporated therein by reference, in the case of clause (i),
correcting any such misstatement or omission, and, in the case of either
clause (i) or (ii), use its reasonable efforts to cause such amendment to be
declared effective and such Registration Statement and the related Prospectus
to become usable for its intended purpose(s) as soon as practicable
thereafter.
(c) The Holder may not include any of its Restricted Securities in a
Shelf Registration Statement pursuant to this Agreement unless and until such
Holder furnishes to the Company in writing, within 30 Business Days after
receipt of a written request therefor, such information specified in Item 507
of Regulation S-K under the Securities Act and such other information as the
Company may reasonably request for use in connection with a Shelf
Registration Statement or Prospectus or preliminary Prospectus included
therein and in any application to the NASD. The Holder agrees to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Holder not
materially misleading.
(d) Notwithstanding anything to the contrary contained herein, if (x)
the Board determines in good faith that the registration and distribution of
Restricted Securities (or the use of any such Shelf Registration Statement or
the Prospectus contained therein) would interfere with any proposed or
pending material corporate transaction involving the Company or any of its
subsidiaries or would require premature disclosure thereof or would require
the Company to disclose information that the Company has not otherwise made
public and that the Company reasonably determines is in the best interests of
the Company not to disclose at such time, and (y) the Company notifies the
Holder in writing not later than three days following such determination
(such notice a "Blackout Notice"), the Company may (A) postpone the filing of
such Shelf Registration Statement or (B) allow such Shelf Registration
Statement to fail to be effective and usable or elect that such Shelf
Registration Statement not be usable for a reasonable period of time, but not
in excess of 30 days (a "Blackout Period"); provided, however, that the
aggregate number of days included in all Blackout Periods shall not exceed 90
during any consecutive 12 months and shall not exceed 150 during the period
specified in Section 2.2(b) of this Agreement; and provided, further, that
the Effective Period referred to in Section 2.2(b) during which a Shelf
Registration Statement is required to be effective and usable shall be
extended by the aggregate number of days during which such Shelf Registration
Statement was not effective or usable pursuant to the foregoing provisions.
(e) Notwithstanding anything to the contrary contained herein, the
Company shall not be obligated to file a Shelf Registration Statement in
respect of Restricted Securities pursuant to this Section 2.2 if: (i) the
Company has previously filed a Shelf Registration Statement with respect to
Restricted Securities, and a period of at least 180 days has not elapsed from
the date on which the Effective Period of such Shelf Registration Statement
has expired; and (ii) the Company has
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previously filed a Company Registration Statement pursuant to which
Restricted Securities have been registered under Section 2.3 hereof, and a
period of at least 120 days has not elapsed from the Effective Time of such
Company Registration Statement.
2.3 Piggyback Registration.
(a) At any time that the Company proposes to file a Company Registration
Statement, either for its own account or for the account of a stockholder or
stockholders, the Company shall give the Holder written notice of its
intention to do so and of the intended method of sale (the "Registration
Notice") within a reasonable time prior to the anticipated filing date of the
Company Registration Statement effecting such registration (but in no event
less than 30 days before the anticipated filing date). The Holder may request
inclusion of any Restricted Securities in such Company Registration Statement
by delivering to the Company, within 30 Business Days after receipt of the
Registration Notice, a written notice (the "Piggyback Notice") stating the
number of Restricted Securities proposed to be included and that such shares
are to be included in any underwriting only on the same terms and conditions
as the shares of Common Stock otherwise being sold through underwriters under
such Company Registration Statement. The Company shall use its best efforts
to cause all Restricted Securities specified in the Piggyback Notice to be
included in the Company Registration Statement and any related offering, all
to the extent requisite to permit the sale by the Holder of such Restricted
Securities in accordance with the method of sale applicable to the other
shares of Common Stock included in such Company Registration Statement;
provided, however, that if, at any time after giving Registration Notice and
prior to the Effective Time of the Company Registration Statement filed in
connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may,
at its election, give written notice of such determination to the Holder and,
thereupon:
(i) in the case of a determination not to register, shall be relieved
of its obligation to register any Restricted Securities in connection with
such registration (but not from its obligation to pay the Registration
Expenses in connection therewith), and
(ii) in the case of a delay in registering, shall be permitted to
delay registering any Restricted Securities for the same period as the
delay in registering such other securities.
(b) The Company's obligation to include Restricted Securities in a
Company Registration Statement pursuant to Section 2.3(a) shall be subject to
the following limitations:
(i) The Company shall not be obligated to include any Restricted
Securities in a registration statement filed on Form S-4, Form S-8 or such
other similar successor forms then in effect under the Securities Act.
(ii) If a Company Registration Statement involves an underwritten
offering and the managing underwriter advises the Company in writing that,
in its opinion, the number of securities requested to be included in such
Registration Statement exceeds the number
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which can be sold in such offering without adversely affecting the
offering, the Company will include in such Registration Statement the
number of such Securities which the Company is so advised can be sold in
such offering without adversely affecting the offering, determined as
follows:
(A) first, the securities proposed by the Company to be sold for
it own account, and
(B) second, any Restricted Securities requested to be included
in such registration and any other securities of the Company pro rata
among the holders thereof requesting such registration on the basis of
the number of shares of such securities requested to be included by
such holders.
(iii) The Company shall not be obligated to effect any
registration for the account of the Holder on a Company Registration
Statement with respect to less than $2.0 million of the Holder's Restricted
Securities, subject to the provisions of Subsection (ii) of this Section
2.3(b).
(iv) The Company shall not be obligated to effect any registration for
the account of the Holder on a Company Registration Statement if, prior to
the filing date of such Company Registration Statement, (A) the Holder has
requested registration of its Restricted Securities on a Shelf Registration
Statement pursuant to Section 2.2 hereof, (B) the corresponding Shelf
Registration Statement has become effective under the Securities Act, and
(C) the public offering has been consummated on the terms and conditions
specified therein or if not consummated, such failure was not attributable
to an action taken by the Company.
(c) The Holder may not include any of its Restricted Securities in a
Company Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Company in writing, within 30 Business Days
after receipt of a written request therefor, such information specified in
Item 507 of Regulation S-K under the Securities Act and such other
information as the Company may reasonably request for use in connection with
the Registration Statement or Prospectus or preliminary Prospectus included
therein and in any application to the NASD. The Holder agrees to furnish
promptly to the Company all information required to be disclosed in order to
make all information previously furnished to the Company by such Holder not
materially misleading.
(d) The Company represents and confirms that, except as provided in that
certain Registration Rights Agreement dated as of November 3, 1997 between
the Company and Robert J. Longo (the "Longo Registration Rights Agreement"),
it has granted no piggyback registration rights to any holder of Common Stock
prior to the date hereof. The Company covenants not to grant any such
piggyback registration rights which would permit any holder of Common Stock
to have piggyback registration rights prior to, or, except for the Longo
Registration Rights Agreement, on a parity with, those of the Holder.
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2.4 Registration Procedures. In connection with any Registration Statement
and any Prospectus required by this Agreement to permit the sale or resale of
Restricted Securities, the Company shall:
(a) prepare and file with the Commission such amendments and
post-effective amendments to such Registration Statement as may be necessary
to keep such Registration Statement effective (i) if such Registration
Statement is a Company Registration Statement, until the earlier of such time
as all of such securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such Company Registration Statement or (ii) if such Registration Statement is
a Shelf Registration Statement, for the applicable period set forth in
Section 2.2(b) herein; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Securities Act, and to comply fully with the applicable
provisions of Rules 424 and 430A, as applicable, under the Securities Act in
a timely manner; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended method
or methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement or the Prospectus;
(b) promptly (and in respect of events covered by clause (i) hereof, on
the same day as the Company shall receive notice of effectiveness) advise the
Holder and, if requested by such Persons, to confirm such advice in writing,
(i) when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and when the same has become effective, (ii) of any
request by the Commission for post-effective amendments to such Registration
Statement or post-effective amendments to such Registration Statement or
post-effective amendments or supplements to the Prospectus or for additional
information relating thereto, (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of any such Registration Statement
under the Securities Act or of the suspension by any state securities
commission of the qualification of the Restricted Securities for offering or
sale in any jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, and (iv) of the existence of any fact or the happening of
any event that makes any statement of a material fact made in any such
Registration Statement, the related Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in any such Registration
Statement or the related Prospectus in order to make the statements therein
not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of such Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Restricted Securities under state securities or Blue Sky laws, the Company
shall use its reasonable efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(c) promptly furnish to the Holder, and each underwriter, if any,
without charge, at least one conformed copy of any Registration Statement, as
first filed with the Commission, and of each amendment thereto, including all
documents incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference) and such other documents as such
Holder may reasonably request;
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<PAGE>
(d) deliver to the Holder, and each underwriter, if any, without charge,
as many copies of the Prospectus (including each preliminary prospectus) and
any amendment or supplement thereto as such person reasonably may request.
(e) enter into such customary agreements and take all such other
reasonable action in connection therewith (including those reasonably
requested by the Holder or the underwriter(s), if any) required in order to
expedite or facilitate the disposition of such Restricted Securities pursuant
to such Registration Statement, including, but not limited to, dispositions
pursuant to an underwritten registration, and in such connection:
(i) make such representations and warranties to the Holder and
underwriter(s), if any, in form, substance and scope as are customarily
made by issuers to underwriters in underwritten offerings (whether or not
sales of securities pursuant to such Registration Statement are to be to an
underwriter(s)) and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company addressed to the Holder
and underwriter(s), if any, covering the matters customarily covered in
opinions requested in underwritten offerings (whether or not sales of
securities pursuant to such Registration Statement are to be made to an
underwriter(s)) and dated the Effective Time of any Registration Statement
(and, in the case of any underwritten sale of securities pursuant to such
Registration Statement, each closing date of sales to the underwriter(s)
pursuant thereto);
(iii) use reasonable efforts to obtain comfort letters dated the
Effective Time of any Registration Statement (and, in the case of any
underwritten sale of securities pursuant to such Registration Statement,
each closing date of sales to the underwriter(s) pursuant thereto) from the
independent certified public accountants of the Company addressed to the
Holder and underwriter, if any, such letters to be in customary form and
covering matters of the type customarily covered in comfort letters in
connection with underwritten offerings (whether or not sales of securities
pursuant to such Registration Statement are to be made to an
underwriter(s));
(iv) provide for the indemnification provisions and procedures of
Section 2.6 hereof with respect to the Holder and the underwriter(s), if
any, and;
(v) deliver such documents and certificates as may be reasonably
requested by the Holder or the underwriter(s), if any, and which are
customarily delivered in underwritten offerings (whether or not sales of
securities pursuant to such Registration Statement are to be made to an
underwriter(s), with such documents and certificates to be dated the
Effective Time of any Registration Statement.
The actions required by clauses (i) through (v) above shall be done at
each closing under such underwriting or similar agreement, as and to the
extent required thereunder, and if at any time the representations and
warranties of the Company contemplated in clause (i) above cease to be true
and correct, the Company shall so advise the underwriter(s), if any, and the
Holder promptly, and, if
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<PAGE>
requested by such Person, shall confirm such advice in writing;
(f) prior to any public offering of Restricted Securities, cooperate
with the Holder, the underwriter(s), if any, and their respective counsel in
connection with the registration and qualification of the Restricted
Securities under the securities or Blue Sky laws of such U.S. jurisdictions
as the Holder or underwriter(s), if any, may reasonably request in writing by
the time any Registration Statement is declared effective by the Commission,
and do any and all other acts or filings necessary or advisable to enable
disposition in such U.S. jurisdictions of the Restricted Securities covered
by any Registration Statement and to file such consents to service of process
or other documents as may be necessary in order to effect such registration
or qualification; provided, however, that the Company shall not be required
to register or qualify as a foreign corporation in any jurisdiction where it
is not then so qualified or as a dealer in securities in any jurisdiction
where it would not otherwise be required to register or qualify but for this
Section 2.4, or to take any action that would subject it to the service of
process in suits or to taxation, in any jurisdiction where it is not then so
subject;
(g) in connection with any sale of Restricted Securities that will
result in such securities no longer being Restricted Securities, cooperate
with the Holder and the underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates representing Restricted Securities
to be sold and not bearing any restrictive legends; and enable such
Restricted Securities to be in such denominations and registered in such
names as the Holder or the underwriter(s), if any, may request at least two
(2) Business Days prior to any sale of Restricted Securities made by such
underwriters;
(h) use its reasonable efforts to cause the disposition of the
Restricted Securities covered by any Registration Statement to be registered
with or approved by such other U.S. governmental agencies or authorities as
may be necessary to enable the seller or sellers thereof or the
underwriter(s), if any, to consummate the disposition of such Restricted
Securities, subject to the proviso contained in Section 2.4(f);
(i) if any fact or event contemplated by Section 2.4(b) shall exist or
have occurred, prepare a supplement or post-effective amendment to any
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as
thereafter delivered to the purchasers of Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statement therein not
misleading;
(j) cooperate and assist in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the rules
and regulations of the NASD, and use its reasonable efforts to cause any
Registration Statement to become effective and approved by such U.S.
governmental agencies or authorities as may be necessary to enable the Holder
to consummate the disposition of such Restricted Securities;
(k) otherwise use its reasonable efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its
security holders with regard to
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such Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
for the twelve-month period (i) commencing at the end of any fiscal quarter
in which Restricted Securities are sold to the underwriter in a firm or best
efforts underwritten offering or (ii) if not sold to an underwriter in such
an offering, beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of any Registration Statement;
(l) provide a CUSIP number for all Restricted Securities not later than
the Effective Time of any Registration Statement;
(m) use its best efforts to qualify for inclusion, not later than the
Effective Time of such Registration Statement, all Restricted Securities
covered by such Registration Statement on the OTC Bulletin Board of the NASD,
or any other trading market on which the Common Stock of the Company is then
admitted for trading, and
(n) provide promptly to Holder upon request each document filed with the
Commission pursuant to the requirements of Section 12 and Section 14 of the
Exchange Act.
The Holder agrees by acquisition of a Restricted Security that, upon
receipt of any notice from the Company of the existence of any fact of the
kind described in Section 2.4(b)(iv) or the commencement of a Blackout
Period, such Holder will forthwith discontinue disposition of Restricted
Securities pursuant to any Registration Statement until such Holder's receipt
of the copies of the supplemented or amended Prospectus contemplated by
Section 2.4(i), or until it is advised in writing, in accordance with the
notice provisions of Section 4.3 herein (the "Advice"), by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus. If so directed by the Company, the Holder will deliver to the
Company all copies, other than permanent file copies, then in such Holder's
possession, of the Prospectus covering such Restricted Securities that was
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the time period regarding the effectiveness of the
Shelf Registration Statement set forth in Section 2.2(b) shall be extended by
the number of days during the period from and including the date of the
giving of such notice pursuant to Section 2.4(b)(iv) or the commencement of a
Blackout Period to and including the date when the Holder shall have received
the copies of the supplemented or amended Prospectus contemplated by Section
2.4(i) or shall have received (in accordance with the notice provisions of
Section 4.3) the Advice.
2.5 Preparation; Reasonable Investigation. In connection with preparation
and filing of each Registration Statement under the Securities Act, the
Company will give the Holder, its underwriter, if any, and their respective
counsel and accountants, the opportunity to participate in the preparation of
such Registration Statement, each prospectus included therein or filed with
the Commission, and each amendment thereof or supplement thereto, and will
give each to them access to its books and records and such opportunities to
discuss the business, finances and accounts of the Company and its
subsidiaries with its officers, directors and the independent public
accountants who have certified its financial statements as shall be
necessary, in the reasonable opinion of the Holder and such underwriters '
respective counsel, to conduct a reasonable investigation within the meaning of
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the Securities Act.
2.6 Certain Rights of the Holder. The Company will not file any registration
statement under the Securities Act which refers to the Holder by name or
otherwise without the prior approval of such Holder, which consent shall not
be unreasonably withheld or delayed.
2.7 Registration Expenses.
(a) All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without limitation: (i)
all registration and filing fees and expenses (including filings made with
the NASD and reasonable counsel fees in connection therewith); (ii) all
reasonable fees and expenses of compliance with federal securities and state
Blue Sky or securities laws (including all reasonable fees and expenses of
one counsel to the underwriter(s) in any underwriting) in connection with
compliance with state Blue Sky or securities laws for up to 10 states; (iii)
all expenses of printing, messenger and delivery services and telephone
calls; (iv) all fees and disbursements of counsel for the Company; and (v)
all fees and disbursements of independent certified public accountants of the
Company (including the expenses of any special audit and comfort letters
required by or incident to such performance), but excluding from this
paragraph, fees and expenses of counsel to the underwriter(s), if any, unless
otherwise set forth herein.
(b) Notwithstanding the foregoing, the Company will not be responsible
for any underwriting discounts, commissions or fees attributable to the sale
of Restricted Securities or any legal fees or disbursements (other than any
such fees or disbursements relating to Blue Sky compliance or otherwise as
set for the under Section 2.7(a)) incurred by any underwriter(s) in any
underwritten offering if the underwriter(s) participates in such underwritten
offering at the request of the Holder, or any transfer taxes that may be
imposed in connection with a sale or transfer of Restricted Securities.
(c) The Company shall, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company.
2.8 Indemnification; Contribution.
(a) The Company agrees to indemnify and hold harmless (i) the Holder,
(ii) each other Person who participates as an underwriter in the offering or
sale of such securities, (iii) each person, if any, who controls (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) the Holder or underwriter (any of the persons referred to in this clause
(iii) being hereinafter referred to as a "controlling person") and (iv) the
respective officers, directors, partners, employees, representatives and
agents of the Holder or underwriter or any controlling person (any person
referred to in clause (i), (ii), (iii) or (iv) may hereinafter be referred to
as an "indemnified Person"), to the fullest extent lawful, from and against
any and all losses, claims, damages,
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liabilities, judgments or expenses, joint or several (or actions or
proceedings, whether commenced or threatened, in respect thereof)
(collectively, "Claims"), to which such indemnified Person may become subject
under either Section 15 of the Securities Act or Section 20 of the Exchange
Act or otherwise, insofar as such Claims arise out of or are based upon, or
are caused by any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or Prospectus (or any amendment
or supplement thereto), or any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or a violation by the Company of the
Securities Act or any state securities law, or any rule or regulation
promulgated under the Securities Act or any state securities law, or any
other law applicable to the Company relating to any such registration or
qualification, except insofar as such losses, claims, damages, liabilities,
judgments or expenses of any such indemnified Person; (x) are caused by any
such untrue statement or omission or alleged untrue statement or omission
that is based upon information relating to such indemnified Person furnished
in writing to the Company by or on behalf of any of such indemnified Person
expressly for use therein; (y) with respect to the preliminary Prospectus,
result from the fact that the Holder sold Securities to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus, as amended or supplemented, if the Company
shall have previously furnished copies thereof to the Holder in accordance
with this Agreement and said Prospectus, as amended or supplemented, would
have corrected such untrue statement or omission; or (z) as a result of the
use by an indemnified Person of any Prospectus when, upon receipt of a
Blackout Notice or a notice from the Company of the existence of any fact of
the kind described in Section 2.4(b)(iv), the indemnified Person or the
Holder was not permitted to do so. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of any
indemnified Person and shall survive the transfer of such securities by such
Holder.
In case any action shall be brought or asserted against any of the
indemnified Persons with respect to which indemnity may be sought against the
Company, such indemnified Person shall promptly notify the Company and the
Company shall assume the defense thereof. Such indemnified Person shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at
the expense of the indemnified Person unless (i) the employment of such
counsel shall have been specifically authorized in writing by the Company,
(ii) the Company shall have failed to assume the defense and employ counsel
or (iii) the named parties to any such action (including any implied parties)
include both the indemnified Person and the Company and the indemnified
Person shall have been advised in writing by its counsel that there may be
one or more legal defenses available to it which are different from or
additional to those available to the Company (in which case the Company shall
not have the right to assume the defense of such action on behalf of the
indemnified Person), it being understood, however, that the Company shall
not, in connection with such action or similar or related actions or
proceedings arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for all the
indemnified Persons, which firm shall be (x) designated by such indemnified
Persons and (y) reasonably satisfactory to the Company. The Company shall not
be liable for any settlement of any such action or proceeding effected
without the Company's prior written consent, which consent shall not be
withheld unreasonably, and the Company agrees to indemnify and hold harmless
any indemnified Person from and against any loss, claim, damage,
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liability, judgment or expense by reason of any settlement of any action
effected with the written consent of the Company. The Company shall not,
without the prior written consent of each indemnified Person, settle or
compromise or consent to the entry of judgment on or otherwise seek to
terminate any pending or threatened action, claim, litigation or proceeding
in respect of which indemnification or contribution may be sought hereunder
(whether or not any indemnified Person is a party thereto), unless such
settlement, compromise, consent or termination includes an unconditional
release of each indemnified Person from all liability arising out of such
action, claim litigation or proceeding.
(b) The Holder agrees to indemnify and hold harmless the Company and its
directors, officers and any person controlling (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) the Company, and
the respective officers, directors, partners, employees, representatives and
agents of each person, to the same extent as the foregoing indemnity from the
Company to each of the indemnified Persons, but only (i) with respect to
actions based on information relating to the Holder furnished in writing by
or on behalf of such Holder expressly for use in any Registration Statement
or Prospectus, and (ii) to the extent of the gross proceeds, if any, received
by such Holder from the sale or other disposition of its Restricted
Securities covered by such Registration Statement. In case any action or
proceeding shall be brought against the Company or its directors or officers
or any such controlling person in respect of which indemnity may be sought
against the Holder, such Holder shall have the rights and duties given the
Company in Section 2.8(a) (except that the Holder may but shall not be
required to assume the defense thereof), and the Company or its directors or
officers or such controlling person shall have the rights and duties given to
the Holder by Section 2.8(a).
(c) If the indemnification provided for in this Section 2.8 is
unavailable to an indemnified party under Section 2.7(a) or (b) (other than
by reason of exceptions provided in those Sections) in respect of any losses,
claims, damages, liabilities, judgments or expenses referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims damages, liabilities, judgments or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Holder on the other
hand from sale of Restricted Securities or (ii) if such allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and the Holder in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities, judgments or expenses, as well as any other
relevant equitable considerations. The relative fault of the Company on the
one hand and of the Holder on the other 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 Company or by the Holder and the
parties relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid to a party as
a result of the losses, claims, damages, liabilities judgments and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in the second paragraph of Section 2.8(a), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating
or defending any action or claim.
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The Company and the Holder agree that it would not be just and equitable
if contribution pursuant to this Section 2.8(c) were determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 2.8(c) the Holder
(and its related indemnified Persons) shall not be required to contribute, in
the aggregate, any amount in excess of the amount by which the dollar amount
of proceeds received by such Holder upon the sale of the Restricted
Securities exceeds the amount of any damages which such Holder has otherwise
been required to pay by reason of such untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentations (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity, and contribution provisions contained in this Section 2.8
are in addition to any liability which the indemnifying person may otherwise
have to the indemnified persons referred to above.
2.9 Participation in Underwritten Registrations. The Holder may not
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Restricted Securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such
underwriting arrangements.
2.10 Selection of Underwriters. The Holder may sell its Restricted Securities in
an underwritten offering. In any such underwritten offering, the investment
banker or investment bankers and manager or managers that will administer the
offering will be selected by the Holder if such registration is pursuant to the
Shelf Registration Statement, and by the Company if such registration is
pursuant to a Company Registration Statement; provided, however, that such
investment bankers and managers must be reasonably satisfactory to the Company
or the Holder, respectively. Such investment bankers and managers are referred
to herein as the "underwriters".
ARTICLE 3
RULE 144
3.1 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of
restricted securities (as that term is used in Rule 144 under the Securities
Act) to the public without registration, the Company agrees to use its best
efforts to:
(a) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times;
(b) file with the Commission in a timely manner all reports and other
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documents required of the Company under the Securities Act and the
Exchange Act; and
(c) so long as the Holder owns any Restricted Securities, furnish to the
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and of the Securities
Act and Exchange Act, a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents so filed as the Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing the Holder to sell any such Restricted Securities without
registration.
ARTICLE 4
MISCELLANEOUS
4.1 Entire Agreement. This Agreement, together with the Stock Purchase
Agreement, constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreement and
understandings, both oral and written, between the parties with respect to
the subject matter hereof.
4.2 Successors and Assigns. Wasteco Ventures Limited expects to assign all
rights under this Agreement to a limited partnership or other entity in which
it will have a substantial interest (the "Proposed Assignee"). An assignment
prior to February 1, 1998 shall be effective without any consent by the
Company upon written notice thereof accompanied by a statement of Wasteco
Ventures Limited that it has a substantial interest in the Proposed Assignee
and a statement by the Proposed Assignee addressed to the Company that it
agrees to be bound by the terms of this Agreement. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of
each of the parties, including without limitation and without the need for an
express assignment, subsequent holders of Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of the Holder unless and to the extent such
successor or assign acquired Restricted Securities from the Holder at a time
when the Holder could not transfer such Restricted Securities pursuant to any
Registration Statement or pursuant to Rule 144 under the Securities Act as
contemplated by clause (ii) of the definition of Restricted Securities.
4.3. Notices. All notices and other communications given or made pursuant
hereto or pursuant to any other agreement among the parties, unless otherwise
specified, shall be in writing and shall be deemed to have been duly given or
made if sent by telecopy (with confirmation in writing), delivered personally
or by overnight courier or sent by registered or certified mail (postage
prepaid, return receipt requested) to the parties at the telecopy number, if
any, or address set forth below or at such other addresses as shall be
furnished by the parties by like notice. Notices sent by telecopier shall be
effective when receipt is acknowledged, notices delivered personally or by
overnight courier shall be effective upon receipt and notices sent by
registered or certified mail shall be effective three days after mailing:
16
<PAGE>
if to the Holder: Wasteco Ventures Limited
Citco Building, Wickham Cay
P.O. Box 662
Road Town
Tortola, British Virgin Islands
with copies to: Wafra Investment Advisory Group, Inc.
9 West 57th Street, 38th Floor
New York, New York 10019
Attention: Mr. John T. Shea
Fax: (212) 486-2678
Telephone: (212) 759-3700
-and-
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: Arthur Norman Field, Esq.
Fax: (212) 848-7179
Telephone: (212) 848-4000
if to the Company: Compost America Holding Company, Inc.
320 Grand Avenue
Englewood, New Jersey 07631
Fax: (201) 541-1303
Telephone: (201) 541-9393
with copies to: Greenberg Traurig Hoffman
Lipoff Rosen & Quentel, P.A.
2005 Market Street, Suite 2050
Philadelphia, PA 19103
Attention: Theodore W. Mason, Esq.
Fax: (215) 988-7801
Telephone: (215) 988-7805
4.4 Headings The headings contained in this Agreement are for convenience
only and shall not affect the meaning or interpretation of this Agreement.
4.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.
4.6 Applicable Law. This Agreement shall be governed by and construed in
accordance with
17
<PAGE>
the laws of the state of New York, without giving effect to choice law
provisions.
4.7 Specific Enforcement. Each party hereto acknowledges that the remedies
at law of the other parties for a breach or threatened breach of this
Agreement would be inadequate, and, in recognition of this fact, any party to
this Agreement, without posting any bond, and in addition to all other
remedies which may be available, shall be entitled to obtain equitable relief
in the form of specific performance, a temporary restraining order, a
temporary to permanent injunction or any other equitable remedy which may
then be available.
4.8 Amendment and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless the Company has obtained
the unanimous written consent of the Holders of the Restricted Securities.
18
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
COMPOST AMERICA HOLDIING COMPANY, INC.
By:____________________________________
Name:
Title
WASTECO VENTURES LIMITED
By:___________________________
Name:
Title:
19
<PAGE>
Exhibit 9.1
FIRST AMENDMENT DATED DECEMBER , 1997 TO STOCKHOLDERS AGREEMENT
dated as of November 3, 1997 by and among COMPOST AMERICA HOLDING COMPANY, INC.,
a New Jersey corporation (the "Company"), WASTECO VENTURES LIMITED, a
corporation organized under the laws of the British Virgin Islands ("Wasteco"),
ROBERT J. LONGO, an individual ("Longo"), ROGER E. TUTTLE, an individual,
("Tuttle"), JOHN B. FETTER, an individual ("Fetter"), ROBERT E. WORTMANN, an
individual ("R. Wortmann"), VICTOR D. WORTMANN, SR., an individual ("V.
Wortmann"), VRH CONSTRUCTION COMPANY, a New York corporation ("VRH"), SELECT
ACQUISITIONS, INC., a Colorado corporation ("Select"), and ALFRED A. RATTIE, an
individual ("Rattie").
WHEREAS, the undersigned entered into a Stockholder Agreement dated
November 3, 1997 (the "Agreement") relating to Compost America Holding Company,
Inc.; and
WHEREAS, the undersigned wish to amend the Agreement in certain
respects described below and to reaffirm the effectiveness of the Agreement as
so amended; and
WHEREAS, terms are used in this First Amendment (the "Amendment") as
defined in the Agreement;
NOW THEREFORE, in consideration of the mutual dependent promises set
forth in this Agreement, the Company and the Stockholder Parties agree as
follows:
A. Sections 1.01 and 1.02 of the Agreement are amended to read in
their entirety as follows:
SECTION 1.01. The Stockholder Parties, except as otherwise provided
herein, shall vote to cause the Board of Directors of the Company (the "Board")
to consist of nine (9) directors and the various provisions of this Agreement
shall be construed to relate to a Board of nine (9) directors. At least two of
the directors (other than the directors designated as provided below) shall be
"independent" directors. Wasteco shall have the right to designate three (3)
directors and Longo shall have the right to designate one (1) director, subject,
however, to increase or decrease as provided in Section 1.02. Should the Board
be increased or decreased in size, the proportion of directors then designated
by Wasteco and Longo, as well as the proportion of independent directors, shall
be strictly maintained. Any right to designate which shall result in a fraction
of one shall be adjusted upward to provide an additional director.
SECTION 1.02. Should such total number of votes that Wasteco is
entitled to cast for the election of directors be more than 40% of the total
number of votes that could be cast (but less than 50%), the number of directors
designated by Wasteco shall be increased to four (4). Should such total number
of votes that Wasteco is entitled to cast be more than 50% of such total number
of votes that could be cast in such election, the number of directors designated
by Wasteco shall be increased to five (5). Should the total number of votes
that Wasteco is entitled to cast for the election of directors be more than 15%
of the
<PAGE>
total number of votes that could be cast in such election (but less than 30%),
the number of directors designated by Wasteco shall be decreased to two (2).
Should the total number of votes that Wasteco is entitled to cast for the
election of directors be less than 15% of the total number of votes that could
be cast in such election (but not less than 5%), the number of directors
designated by Wasteco shall be decreased to one (1). Should the total number of
votes that Wasteco or Longo is entitled to cast for the election of directors be
less than 5% of the total number of votes that could be cast in such election,
no director may be designated by such party, provided, however, that one
director each shall be retained until November 3, 2004 by each of Wasteco and
Longo if they retain any securities of the Company.
B. Subsection 1.10(x), of the Agreement is amended to read in its
entirely as follows:
"(x) any increase or decrease in the size of the Board from nine
(9) directors, and"
C. The Agreement as so amended is hereby ratified and confirmed in
all respects. Pursuant to Section 4.07 of the Agreement, this Amendment may be
executed in any number of counterparts, each of which together shall consitute
one instrument, and delivery of an executed counterpart of a signature page to
this Amendment by telecopier shall be effective as delivery of a manually
executed counterpart of this Amendment.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment in their individual capacity or caused it to be duly executed by their
respective signatories thereunto duly authorized as of the day and year first
above written.
COMPOST AMERICA HOLDING COMPANY, INC.
By: _____________________________
Title:
WASTECO VENTURES LIMITED
By: _____________________________
Title:
<PAGE>
_________________________________
Robert J. Longo
_________________________________
Roger E. Tuttle
_________________________________
John B. Fetter
_________________________________
Robert E. Wortmann
_________________________________
Victor D. Wortmann, Sr.
VRH CONSTRUCTION COMPANY
By: _____________________________
Title:
SELECT ACQUISITIONS, INC.
By: _____________________________
Title:
_________________________________
Alfred A. Rattie
<PAGE>
Exhibit 99.1
AMENDATORY AGREEMENT
THIS AMENDATORY AGREEMENT (this "Agreement") is made this ____ day of
_________, 1997 by and among ROBERT J. LONGO, an individual ("Longo"), COMPOST
AMERICA HOLDING COMPANY, INC., a New Jersey corporation ("CAHC"), WASTECO
VENTURES LIMITED, a corporation organized under the laws of the British Virgin
Islands ("Wasteco"), ROGER E. TUTTLE, an individual ("Tuttle"), JOHN B. FETTER,
an individual ("Fetter"), VICTOR E. WORTMANN, SR., an individual ("Victor
Wortmann"), VRH CONSTRUCTION CORP., a New York corporation ("VRH"), ROBERT E.
WORTMANN ("Robert Wortmann"), SELECT ACQUISITIONS, INC., a Colorado corporation
("Select"), and ALFRED E. RATTIE, an individual ("Rattie").
WHEREAS, CAHC and Wasteco executed a Stock Purchase Agreement dated as
of November 3, 1997 (the "Wasteco Stock Purchase Agreement") relating to the
purchase by Wasteco of certain common and preferred stock of CAHC;
WHEREAS, CAHC and Longo executed a certain Stock Purchase Agreement
dated as of September 17, 1997 (the "Longo Stock Purchase Agreement") relating
to the purchase by Longo of certain common and preferred stock of CAHC (the
Longo Stock Purchase Agreement and the Wasteco Stock Purchase Agreement are
sometimes collectively referred to herein as the "Stock Purchase Agreements");
WHEREAS, in connection with the transactions contemplated by the Stock
Purchase Agreements, Longo, CAHC, Wasteco, Tuttle, Select, Wortmann, Fetter, VRH
and Rattie executed a Stockholders Agreement dated as of November 3, 1997 (the
"Stockholders Agreement");
WHEREAS, in connection with the transactions contemplated by the Stock
Purchase Agreements, CAHC and Longo executed a Registration Rights Agreement
dated as of November 3, 1997 (the "Longo Registration Agreement");
WHEREAS, in connection with the transactions contemplated by the Stock
Purchase Agreements, CAHC and Wasteco executed a Registration Rights Agreement
dated as of November 3, 1997 (the "Wasteco Registration Agreement") (the Longo
Registration Agreement and the Wasteco Registration Agreement are sometimes
collectively referred to herein as the "Registration Agreements");
WHEREAS, CAHC, Wasteco and Longo entered into various agreements and
undertakings on or about November 3, 1997 (the "Agreements and Undertakings")
<PAGE>
and took other actions based upon the understanding that both common and
preferred stock of CAHC was being issued and that two Certificates of
Designations of Rights and Preferences (one relating to Series A Exchangeable
Preferred Stock and one relating to Series C Exchangeable Preferred Stock)
had been properly filed with the New Jersey Secretary of State and that such
Certificates permitted the issuance of the preferred stock described therein
in accordance the N.J.S.A. 14A:7-2;
WHEREAS, common stock of CAHC was issued on November 3, 1997 as
contemplated by the Stock Purchase Agreements;
WHEREAS, the two Certificates of Designation were not in fact filed
on November 3, 1997 although the parties hereto did not become aware of that
fact until November 4, 1997 or thereafter, and accordingly the Preferred
Stock was not properly issued, although certificates purporting to be
Preferred Stock were executed and delivered as provided in the Stock Purchase
Agreements;
WHEREAS, the parties intend that the Preferred Stock be issued as
contemplated by the Stock Purchase Agreements and the parties agree that the
Preferred Stock shall be issued as of the date on which the Certificates of
Designations for such Series A and Series C Preferred Stock have been filed
with the New Jersey Secretary of State in a form satisfactory to all of them;
WHEREAS, in connection with the issuance of such Preferred Stock to
Wasteco and Longo, CAHC executed a certain Certificate of Amendment to the
Certificate of Incorporation, attached to which was a Certificate of
Designations of Rights and Preferences of Series A Exchangeable Redeemable
Preferred Stock (the "Series A Certificate"), which Series A Certificate was
filed in the Office of the Secretary of State of New Jersey on November 6,
1997, as amended by a Certificate of Amendment dated December 12, 1997 and
filed in the Office of the Secretary of State of New Jersey (the "Series A
Certificate of Amendment");
WHEREAS, in connection with the issuance of such Preferred Stock to
Wasteco and Longo, CAHC executed a certain Certificate of Amendment to the
Certificate of Incorporation, attached to which was a Certificate of
Designations of Rights and Preferences of Series C Redeemable Convertible
Preferred Stock (the "Series C Certificate"), which Series C Certificate was
filed in the Office of the Secretary of State of New Jersey on November 6,
1997, as amended by a Certificate of Amendment dated December 12, 1997 and
filed in the Office of the Secretary of State of New Jersey (the "Series C
Certificate of Amendment");
WHEREAS, Wasteco and Longo executed a certain Wasteco-Longo
Agreement re: Exchange of Compost Preferred and Common Stock for EPIC Stock
(the "Wasteco-Longo Agreement") dated as of November 3, 1997;
<PAGE>
WHEREAS, Tuttle and Longo executed a certain Optional Participation
Agreement dated as of November 3, 1997 pertaining to the registration of certain
shares of CAHC stock owned by Tuttle and Longo respectively (the "Longo
Participation Agreement") (the Wasteco Participation Agreement and the Longo
Participation Agreement are sometimes collectively referred to herein as the
"Participation Agreements");
WHEREAS, Wasteco intends to assign all of its rights under this
Agreement, the Wasteco Stock Purchase Agreement, the Stockholders Agreement,
the Wasteco Registration Rights Agreement and the Wasteco Participation
Agreement as well as the Agreements and Undertakings;
WHEREAS, the parties hereto wish to be bound by the various agreements
described above as well as the Agreements and Undertakings;
WHEREAS, the parties hereto acknowledge that the Preferred Stock has
been issued on December 12, 1997 rather than on November 3, 1997; and
WHEREAS, the parties hereto wish to amend the various agreements
described above as well as the Agreements and Undertakings to (a) reflect the
true date of the issuance of the Preferred Stock, (b) make changes to avoid
prejudice to the purchasers of the Preferred Stock and (c) reaffirm the
various agreements described above as well as the Agreements and Undertakings.
NOW, THEREFORE, the parties hereto, intending to be legally bound, do
hereby covenant and agree as follows:
1. Effective Date of Stockholders Agreement. The Stockholders
Agreement shall be dated as of November 3, 1997 but shall be effective as of
December 12, 1997.
2. Amendments to Series A Certificate. CAHC, Wasteco and Longo
hereby agree to the following amendments to the Series A Certificate, which
amendments are reflected in the Series A Certificate of Amendment:
a. For purposes of Paragraph 2 of the Series A Certificate,
CAHC agrees that the amount of any dividend paid pursuant to such paragraph
shall be calculated as if the Series A Preferred Stock had been issued on
November 3, 1997.
b. Subparagraph (i) of Paragraph 3(a) of the Series A
Certificate shall be amended by replacing the date "November 3, 1997" with the
date "December 12, 1997."
<PAGE>
c. Subparagraph 4(a) on page 4 of the Series A Certificate
shall be amended by replacing the date "November 3, 1997" with the date
"December 12, 1997."
3. Amendments to Series C Certificate. CAHC, Wasteco and Longo
hereby agree to the following amendments to the Series C Certificate, which
amendments are reflected in the Series C Certificate of Amendment:
a. For purposes of Subparagraph 2(b) of the Series C
Certificate, CAHC agrees that the Special Dividend (as such term is defined
in the Series C Certificate) shall be calculated as if the Series C Preferred
Stock had been issued on November 3, 1997.
b. Subparagraph (i) of Paragraph 3(a) of the Series C
Certificate shall be amended by replacing the date "November 3, 1997" with the
date "December 12, 1997."
c. The words "outstanding on November 3, 1997" in
Subparagraph 4(a) on page 4 of the Series C Certificate shall be amended by
replacing the date "November 3, 1997" with the date "December 12, 1997."
4. Amendments to Stock Purchase Agreements. CAHC, Wasteco and
Longo hereby affirm that the respective representations and warranties
contained in the Stock Purchase Agreements remained true and correct in all
material respects as of December 12, 1997.
5. Amendments to Registration Agreements. CAHC, Wasteco and Longo
hereby agree that, for purposes of Subparagraph 2.2(a) of the Registration
Agreements, the Closing Date shall be deemed to be November 3, 1997,
notwithstanding the date of issuance of the Series A Preferred Stock, the
Series C Preferred Stock and the Common Stock (all as defined in the
Registration Agreements).
6. Amendments to Participation Agreements. For purposes of the
Participation Agreements, the Series A and Series C Preferred Stock issued to
Wasteco and Longo pursuant to the Stock Purchase Agreements, the Series A
Certificate and the Series C Certificate shall be deemed to be have been
issued on December 12, 1997.
7. Re-issuance of Stock. CAHC, Longo and Wasteco hereby
acknowledge that Wasteco and Longo have tendered the shares of Series A and
Series C Preferred Stock of CAHC issued to them on November 3, 1997, which
shares have been canceled of record, and that CAHC has re-issued to Wasteco
and Longo the same number of shares of Series A and Series C Preferred Stock
of CAHC dated as of December 12, 1997 as contemplated by the Stock Purchase
Agreements.
8. Amendments to Related Documents. For purposes of construing the
<PAGE>
Agreements and Undertakings, including without limitation, any of the
transactions contemplated by the Stock Purchase Agreements, the Registration
Agreements, the Series A Certificate, the Series C Certificate and the
Participation Agreements, any documents or agreements executed by any one or
more of the parties hereto in connection with such Agreements and
Undertakings is hereby amended to reflect that the Series A and Series C
Preferred Stock issued to Wasteco and Longo in connection with the aforesaid
transactions was issued as of December 12, 1997.
9. Conflicts. In the event of any conflict between the terms of
this Agreement and the terms of the Stock Purchase Agreements, the
Registration Agreements, the Series A Certificate, the Series C Certificate,
the Stockholders Agreement, the Participation Agreements and any other
documents related thereto and executed by one or more of the parties hereto
in connection with the Agreements and Undertakings, the terms and provisions
of this Agreement shall control.
10. Date of Preferred Stock. All of the agreements described above
as well as the Agreements and Undertakings shall be deemed amended (a) to
reflect the issuance of the Preferred Stock on December 12, 1997, (b) to
provide that dividends on the Preferred Stock shall be calculated so that
they shall be paid as if the Preferred Stock had been issued on November 3,
1997 as provided in the Series A Certificate and the Series C Certificate,
both as amended by the Series A Certificate of Amendment and the Series C
Certificate of Amendment, both dated December 12, 1997 (the "Amended
Certificates of Designations") and filed in the Office of the Secretary of
State of New Jersey, (c) to provide that any rights available in the
Preferred Stock to the holders thereof shall be exercised solely as provided
in the Amended Certificates of Designations and (d) to provide that any
rights of the parties who are holders of the Preferred Stock set forth in
documents other than the Amended Certificates of Designations shall be
construed to provide them with an extension of up to thirty-nine days as to
any matters directly or indirectly related to the date of issuance of the
Preferred Stock, November 3, 1997, or any date related hereto.
11. Assignment to Wafra Acquisition Fund 7, L.P. Upon Wasteco's
written notification to the other parties hereto of the assignment by Wasteco
of "all of its rights of any kind and description in and to the Wasteco Stock
Purchase Agreement, the Wasteco Registration Rights Agreement, the Wasteco
Participation Agreement, the Wasteco-Longo Agreement, this Agreement as well
as the Agreements and Undertakings, Wafra Acquisition Fund 7, L.P. shall be
recognized as the successor in all respects to Wasteco and Wasteco shall have
no further rights or obligations under such documents.
12. Agreements Remain in Effect. All of the agreements described
above as well as the Agreements and Undertakings shall remain fully effective
and are changed only as specifically provided herein and shall bind the party
or parties to each in all respects as originally contemplated.
<PAGE>
13. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
[SIGNATURES ON FOLLOWING PAGE]
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties
hereto have executed this Agreement as of the day and year first above written.
ROBERT J. LONGO
___________________________
COMPOST AMERICA HOLDING COMPANY, INC.
_____________________________
Name:
Title:
WASTECO VENTURES LIMITED
______________________________
Name:
Title:
ROGER E. TUTTLE
______________________________
JOHN B. FETTER
_______________________________
VICTOR E. WORTMANN, SR
_______________________________
VRH CONSTRUCTION CORP.
_______________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
ROBERT E. WORTMANN
________________________________
SELECT ACQUISITIONS, INC.
________________________________
Name:
Title:
ALFRED E. RATTIE
______________________________________
<PAGE>
Exhibit 99.2
LONGO OPTIONAL PARTICIPATION AGREEMENT
LONGO OPTIONAL PARTICIPATION AGREEMENT dated as of November 3, 1997
between ROBERT J. LONGO, an individual ("Longo") and ROGER E. TUTTLE, an
individual ("Tuttle").
WHEREAS, pursuant to a certain Stock Purchase Agreement between
Compost America Holding Company, Inc. (the "Company") and Longo dated November
3, 1997, Longo has acquired common stock ("Common Stock") of the Company as well
as certain other securities and rights.
NOW, THEREFORE, in consideration of mutual and dependent promises set
forth in this Agreement, Longo and Tuttle agree as follows:
Section 1. (a) In the event that (i) Tuttle alone or (ii) any person
or persons related to Tuttle by blood or marriage or (iii) any such person or
persons acting together with Tuttle intend(s) to sell in the aggregate more than
5% of the shares beneficially owned by all of them, Longo may elect to sell the
shares held by Longo in any amount up to the pro rata number of shares held by
Longo. Tuttle shall provide written notice of such intent to sell such shares
to Longo no later than 20 days prior to the consummation of the sale (a "Notice
of Intention"). Such Notice of Intention shall include the price per share and
method of payment. Longo shall have the right and option, for a period of 20
days after the date the Notice of Intention is given to Longo (the "Response
Period"), to deliver a written notice to Tuttle specifying the number of shares
which Longo wishes to sell (a "Notice of Participation"), together with (A) the
certificate or certificates evidencing such shares duly endorsed in blank or
accompanied by written instruments of transfer in form reasonably satisfactory
to Tuttle executed by Longo, (B) an instrument of assignment reasonably
satisfactory to Tuttle assigning, as of the consummation of the sale, all of
Longo's rights hereunder with respect to the shares to be sold and (C) a special
irrevocable power of attorney authorizing Tuttle to sell such shares on the
terms set forth in the Notice of Intention and to take all such actions as shall
be necessary or appropriate in order to consummate such sale.
(b) Tuttle shall consummate the sale of the shares within 90 days of
the receipt of the Notice of Participation. Promptly after such consummation of
the sale, Tuttle shall cause to be remitted to Longo the total sales price of
the shares of Longo sold pursuant thereto.
(c) If, at the end of the Response Period, Longo shall not have given
a Notice of Participation (and delivered all other required documentation) with
respect to some or all of the pro rata number of shares of Longo, Longo shall be
deemed to have waived all of its rights under this Section with respect to the
sale of the pro rata number of shares with respect to which a Notice of
Participation shall not have been given (or the required
<PAGE>
documents not delivered). If, at the end of the 90-day period following the
receipt of the Notice of Participation by Longo, Tuttle has not completed the
sale of all the offered shares and the shares with respect to which Longo shall
have given a Notice of Participation pursuant to this Section, Tuttle shall
return to Longo all certificates evidencing the unsold shares that Longo
delivered pursuant to this Section and Longo's related instruments of assignment
and power of attorney.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement in their individual capacity or caused it to be duly executed by their
respective authorized signatories thereunto duly authorized as of the day and
year first above written.
___________________________________________
Robert J. Longo
___________________________________________
Roger E. Tuttle
